Many people assume boat insurance is just auto insurance on the water. Unfortunately this is a very common way of thinking, because the policy and some of the coverage is similar. Liability insurance on a boat covers the boat and any authorized operators. Liability on a boat insurance policy does not extend to other boats the policy owner may operate, as does an auto policy. Others believe their home owners insurance covers their boat. While some home policies will extend coverage to a boat, it is usually only on certain size boats with motors smaller than 50 horse power. And my favorite, the insurance company will replace my boat if it gets wrecked. Not always sailor! Make sure you know which of these boat coverages you have on your policy. Replacement, the most expensive and does replace your boat less any deductible. Agreed value policy states at time you purchase your policy how much you will receive in the event of a total loss. Actual cash policy which pays the cost of your boat new, less depreciation for time, condition, and market value.
In addition to the above misconceptions, there are a few critical forms of coverage that boat owners assume would be covered but, would be wise to ask their agent about before purchasing boat insurance. The first kind is tow coverage. I know, if your boat runs out of fuel or breaks down on the lake, you can just wait for the next Good Samaritan to sail by and throw a rope. While this is a great solution for the fuel shortage dilemma or mechanical breakdown, it is useless if your pride and joy is resting on the bottom of the lake. Not only is tow insurance critical to your policy, but the amount of tow coverage is just as important. Another coverage that should be researched before purchasing boat insurance is fuel spill coverage. If your boat leaks fuel from an accident, your liability coverage will generally apply. However, if your boat is leaking fuel and the cause of the leak isn’t covered on your policy, you may be on the hook for the clean-up. Understand too, that more likely than not, any fines associated with a fuel spill by various governments are not covered. Finally, ask your agent what waterways your boats coverage will extend to. If your policy is for the Midwest lakes and rivers and you have an accident in the Gulf of Mexico your only coverage is probably all of the assets you own!
There are numerous ways to save money on boat insurance. First, keep a clean driving record because the silly insurance company will assume you are a poor boat operator if you appear to be a poor car operator. Second, ask about marine safety courses you can take to lower premium. Not only will this help with rates, but probably will help avoid claims. Last, safety equipment is important. Find out what discounts are available for GPS, auto fire extinguishers, depth finders, and other equipment.
In closing, if you already have boat insurance, ask your agent about these issues. If you are buying a boat, I suggest finding out the answers prior to purchase. The only thing worse than paying for insurance, is finding out you didn’t pay for the right insurance!
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