If you own a boat, you probably need boat insurance. These insurance policies are generally for vessels up to 26 feet in length. Longer boats are usually considered to be yachts and need yacht insurance.
If your boat is accidentally damaged or even totally destroyed, insurance can help you recover repair or replacement costs, much like automobile insurance does. However, damage must come from a covered peril, such as accident, windstorm, fire, collision, lightning, or theft. Typical coverage includes outboard motors, auxiliary equipment, machinery, your boat trailer and even personal property.
A homeowner’s policy often does not include boats. It may have minimal coverage for very small boats with no engine or a small engine like on a sailboat. However, you may be able to bundle the boat policy with your auto or home insurance to save money. Insurance for your boat is similar to home insurance in that you are covered if a person is injured on your craft. And it is similar to car insurance in that you are covered for bodily injury, property damage your boat causes, and any physical damage to your vessel caused by hitting something or running aground.
You may choose an insurance policy for Actual Cash Value (ACV) or for an Agreed Amount Value basis. ACV policies cover replacement of your boat minus depreciation. For a total loss, resources such as boat pricing guides are used to determine the boat’s approximate market value. For a partial loss, the total repair cost minus a depreciation percentage is calculated. Policies for an Agreed Amount Value mean that the boat’s value has been previously determined, and the owner will be paid that amount for a total loss. Policies for Agreed Amount replace many old items for new ones in a partial loss with no depreciation deductions. This means the actual cash value for items such as protective covers, sails, trailers, dinghies, outboard motors, and other items.
You may also want comprehensive coverage for such things as fire, flood, vandalism, uninsured boater insurance, coverage for personal property such as fishing gear, and even roadside assistance in case you need a tow. Boat insurance may allow you suspend coverage for a particular amount of time, for example, if your boat is out of the water in the fall and winter months.
Boats usually represent a significant investment. Properly protecting that investment just makes sound financial sense.