What’s the difference between a boat and a yacht*? If you know the answer, you probably need more coverage than just the standard homeowners policy can provide.
Boating is a great family activity, but it does involve risks: in 2008 (the last year for which complete data were available at press time), the Coast Guard counted 4,789 accidents that involved 709 deaths, 3,331 injuries and approximately $54 million dollars of damage to property as a result of recreational boating accidents.
If you own or regularly operate a boat for recreational purposes, you might need more coverage than your homeowners policy provides. The standard homeowners policy limits coverage for property damage to small boats only—such as canoes, small sailboats or power boats with less than 25 miles per hour horsepower. Further, the standard homeowners insurance policy excludes coverage for any liability you may incur arising from “ownership, maintenance, use, loading or unloading” of watercraft.
If you have a smaller watercraft, you might be able to obtain the liability coverage you need with an endorsement to your homeowners policy. But if you own a larger craft, a specialized boat insurance policy offers property coverage to protect your investment in your boat, along with the liability coverage you need to protect your family from catastrophic lawsuits.
What boat insurance covers
Like your homeowners policy, boat insurance contains two parts: liability coverage and property damage coverage. The liability portion covers you for injuries or property damage you or an insured family member cause to another person through your boating activities. Liability limits under boat insurance policies range from $15,000 to $300,000. Yacht policies can provide from $300,000 to $2 million in coverage. You’ll want to ensure you have enough coverage to protect your assets in case of a serious lawsuit. However, you can insure part of your liability exposure through a personal liability umbrella.
Most boating-related claims—and therefore, most of your premium costs—involve property damage to your own boat. How much your policy will cost depends on your boat’s value, where and how you are going to use it, and your boating experience.
How much coverage you want — the limits of your policy — will depend on the boat’s value. If you have just bought a brand-new boat, you’ll want to insure it for its purchase price. If you have an older boat, an examination of boating “blue books” or an appraisal by a marine surveyor can help determine its worth.
Where you dock and operate your boat will affect how much your coverage will cost. You’ll pay more to keep a boat in hurricane-prone Florida than in California, for example. Likewise, operating a boat primarily in saltwater exposes it to more of the elements and makes it more vulnerable to damage over the long term than a boat operated in fresh water. The length of the boating season in your area also enters into the equation—a boat on Lake Ontario has a shorter operating season—and lower risk exposures—than one on Lake Mead.
Your boating experience (or the operator’s, if another family member will be the primary operator) plays an important role in your insurance costs. The underwriter will look at your experience, the size of the boat and your motor vehicle records (because a bad driver will generally be a bad boat captain) to evaluate the risk you pose. Taking a boating safety or other boating-related courses can reduce your risk of accident and might lower your insurance costs.
You’ll want to be sure your boat policy covers your trailer and the boat’s motor. You can also endorse the policy to provide coverage for personal belongings stored on the boat, along with dinghies and fishing gear. For more information on insuring your boat, please contact us.
*A vessel longer than 26 or 27 feet is generally considered a yacht.
How to Protect Your Boat from Theft
Think it’s just high-value boats that get stolen? Robert M. Bryant, president and CEO of the National Insurance Crime Bureau (NICB), says otherwise. “The majority of watercraft stolen each year are under 20-feet in length and are never seen again by their owners.”
To protect your boat from theft, the NICB recommends taking the following steps:
- Always dock in a well illuminated area
- Clearly identify and mark the vessel
- Secure watercraft to the dock or buoy with a locked steel cable; detachable outboard motors also should be chained and locked to the boat
- Always shut the engine off; never leave the keys in the boat when disembarking
- Lock the craft’s cabins, doors, and windows when not in use
- Equip the boat with alarms and activate them whenever leaving the craft
- Disable the boat when docked for long periods by shutting off fuel lines, removing the battery or removing the distributor cap.
For further protection, store your registration and title documents, photos of the boat (including a close-up of the HIN number) and serial numbers of all on-board electronics and equipment together in a safe place, off the boat.