Types of Boat Insurance

Unlike auto and homeowner’s insurance policies that tend to have little variation, boat insurance coverage can vary widely from insurer to insurer. Boat owners can customize their marine policies to include many different coverages depending on what their carrier offers. Like most other forms of insurance, boat insurance has two primary components: liability protection and coverage for physical damage. We will explain these two components in greater detail and discuss more specific types of coverage in what follows.

Physical Damage Coverage

Physical damage protection on a boat insurance policy is much like the collision and comprehensive coverages in your auto policy. This coverage will pay to replace or repair your vessel in the event of a covered loss. Some policies restrict coverage to the perils specifically enumerated in your agreement, while others cover all losses except for those that are expressly excluded in the agreement. Similarly, some boat and yacht policies will not cover any damage related to wear and tear, but you may find a company that will reimburse you for such damage under certain circumstances. Depending on your insurer, the physical damage component of your policy may include the following extra coverages:

  • Personal possessions. Many boat insurance policies limit the extent of their coverage to items that are actually part of the vessel. For instance, if fishing gear, jet skis, scuba diving gear, etc. were damaged on your boat, your losses would probably not be covered because these items are not regarded as part of the boat.
  • Emergency assistance. Usually, adding emergency assistance coverage to your boat insurance policy will raise your premiums. You will typically receive services like towing, urgent repairs, and the delivery of gas if you run out of fuel.

Liability Coverage

Between physical damage and liability coverage, liability is probably the more critical coverage to carry. In the worst-case scenario, damage to your yacht or boat would cost you the entire cash value of the ship and any possessions it carried. However, with liability claims, the potential financial losses are almost limitless. One lawsuit from a passenger or another boater could cost you all of your assets, including your retirement savings and your home. Traditional boat insurance liability will cover you against property damage and bodily injury claims. Remember that the right amount of liability protection for you will depend on your assets. If your personal worth is substantial, you will want to select the maximum amount of liability coverage and perhaps also consider purchasing an additional umbrella liability policy.

Other Coverages

Liability and physical damage coverage are the mainstays of boat insurance, but many companies also offer the following optional coverages:

  • Wreckage removal and disposal – your policy will pay to have your wrecked boat removed from the water and disposed of
  • Medical payments - your policy will pay for the medical expenses in the event that anyone is injured on your vessel
  • Uninsured boater - because liability coverage for boats is not legally required, you may be at risk for damages from other boaters who are uninsured. This coverage would pay for injuries and damages caused by an uninsured boater.
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