It might seem like boat insurance should be very similar to auto insurance. After all, a boat is like a car on the water, right? You drive it. You park it. And it can be stolen or damaged.
But the truth is that there are several key differences between boat insurance and auto insurance.
The “agreed value” option
When you insure a car, the payout in the event of a claim is always determined by the market value of the vehicle at the time of the accident. If your car has depreciated you’ll be written a check for the current value and not what you originally paid for it.
When you insure a boat, however, you can opt to insure at an “agreed value”. In the event that your boat is totaled, you will be entitled to claim its full agreed value regardless of what your boat would sell for.
Boat insurance may not be required in your state
It’s not a smart move to take your boat out on the water uninsured, but unlike automobiles, not every state mandates that you carry coverage for your boat.
Do remember though that states have laws making you liable for damage you cause while driving your boat. At the bare minimum, purchase liability coverage to protect yourself from litigation should you be at fault in an accident.
It’s possible to suspend boat insurance
If you only use your boat for part of the year, you can opt to suspend coverage during the months you have your boat out of the water.
If you do choose to only carry seasonal coverage, don’t forget to call your agent and reactivate your policy before boating season. Bear in mind that theft or damage that occurs while the boat is in storage will not be covered if your policy is suspended.
Coverage may be limited by geography
A boater’s policy can potentially be voided if you take your boat to an area not covered by the policy. For example, some policies only provide coverage for inland waters (lakes & rivers) and not for the ocean.
Always familiarize yourself with where you’re covered and where you’re not. Upgrade your policy with the appropriate endorsements if needed.
At John B. Wright, we’ve been insuring boats for more than 50 years. We’ve seen it all and know how to protect against it. If you have questions about your boat insurance, schedule a consultation today.
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