What To Know About Insuring Your Watercraft

Congratulations! If you’re reading this you probably just purchased a boat and are looking for information on how to insure your watercraft vehicle. There are many different things to consider when choosing the right insurance for your boat or water play toy. We’ve done the research so you don’t have to, so sit back and relax because we got you covered.

Much like auto insurance, boat insurance covers your boat or yacht for liability and physical damage. In addition, you can also purchase coverage for medical payments, personal property (including fishing equipment), towing, trailer, and uninsured boater coverage. Losses on boat policies are typically paid based on an agreed value or actual cash value.

So How Much Does Boat Insurance Cost?

The average boat policy contains $300,000 of liability coverage, however coverage ranges from $100,000 to $1,000,000. If you have significant assets then more coverage may be desirable.

Many boat owners also only use their craft for several months out of the year, while the rest of the time they keep it in storage. Try asking your insurer if you qualify for a “lay-up” discount. This allows you to pay a discounted rate for the months that your boat is in storage.

You should also note, that the navigation territory for your boat will cause variations in rate.  For instance, using the boat only on inland waterways and lakes is less expensive than if you use the boat on coastal waters.

Top 4 Things You Should Know About Boat Insurance

#1: Boats have limited coverage on a homeowners policy.

#2: Large watercraft vessels need their own boat insurance policy.

#3: Boat policies come with limited coverage for personal effects.

#4: There are ways to save on boat insurance.

Types of Boat Insurance

There are two basic types of boat insurance—“agreed value” and “actual cash value.” How depreciation is handled is what sets them apart.

An “agreed value” policy covers the boat based on its value when the policy was written. While it can cost more up front, there is no depreciation for a total loss of the boat (some partial losses may be depreciated).

Actual cash value” policies cost less up front, but factor in depreciation. In other word, the policy will only pay up to the actual cash value of the boat at the time it is declared a total or partial loss. Eventually, as your boat ages, your insurer will likely insist on an actual cash value policy—and if often gives substantial savings.

Insurance Factors

Insurers consider many factors when deciding whether or not to offer a policy. Almost any vessel can be insured— for a price. You want to consider the following to make sure the policy you purchase meets your needs:

  • Age of Boat
  • Length
  • Value
  • Speed/Horsepower
  • Condition (Does it meet US Coast Guard Standards in effect at the time it was built?)
  • Primary residence (If the boat is used as a primary residence)
  • Type (Inboard, Outboard, utility, cruiser, bassboat, saltwater fishing boat, performance boat)
  • Homemade (Boats without a serial number are tricky but many kits are okay)
  • Houseboats with no motor
  • Ownership (more than 2 owners)
  • Where it will operate (Ocean, lakes, bays, rivers, Great Lakes)

For more information reach out to Daigle & Travers Insurance. We have two convenient locations in Connecticut: Darien and Westport. One of our many experienced insurance professionals will be able to guide you through the insurance process. We can be reached at 203-655-6974 or at info@dt-ins.com.