Understanding Your Boat Insurance Coverage
Boat insurance is not a maintenance policy and will not cover wear and tear so know the policy types, coverage limits and limitations when shopping for marine insurance

What does boat insurance cover?

Substantial damage to the sails, hull, equipment, furnishings and most other equipment usually used on board is covered by most policies.

You are also insured against liability losses.

The policy grants payment for minor medical expenses in the event that you, your guest or family are injured while on board.

The boat trailer is covered against physical loss and damage under most policies.

The majority of maritime certificates are made up of a lot of underlying policies. However, the Hull Policy is one of the first and most common policies boaters buy. With an agreed value policy, both the insured and the insurance carrier state and agree on the value of the hull and the attached hardware. With an actual cash value policy, the insurance company pays what the boat is worth at the time of the loss.

It is important to note that insurance is not a maintenance policy and will not cover wear and tear. You’ll need to be aware of policy types, coverage limits and limitations when shopping for marine insurance.

The two fundamental sections of a typical boat or yacht insurance policy are physical damage and liability. Occasionally referred to as Protection & Indemnity, the liability section covers your legal responsibilities to third parties. This can cover a broad selection of exposures depending on the form and the coverage. The policy is written on a “per occurrence” basis, which means the most the underwriter will pay in the event of a covered P&I loss is the policy limit.

Physical damage coverage normally pays for repairs to your boat that are needed as a result of damage caused by a broad variety of perils.

Many boaters believe that their homeowners’ policy includes and covers their boat. The truth is only a small portion of repair or damage costs for your watercraft is covered by your homeowners’ policy, and it is advisable to get separate coverage for your boat. Your policy should cover any physical damage or repairs needed as a result of a natural disaster. Other risks you should be insured against include:

Even if your boat has only been sunken for a short time, the cost of fixing it is typically about 40% of its value. Modern boats sink for a variety of reasons. Where does the water come from? According to BoatU.S. Marine Insurance, 50% of boats sink due to underwater fittings, 32% sink as a result of rain and snow, 9% because of fittings above the waterline, 8% because of poor docking arrangements, and the other 1% due to other reasons.

The main distinction between car and boat insurance is the amount of coverage a policy provides. Just remember that the coverage that applies to your boat should always pertain to the persons on board as well. Next you should look to cover the equipment on the boat itself. Finally, you should seek liability insurance to protect you from potentially huge losses in case an accident occurs and it is determined to be your fault.