Boat Insurance FAQs
Why hasn't my agent told me about boat insurance?
- There are a number of reasons why your agent hasn't informed you about insurance coverage for your boat. First, the agent may not be aware that you now own or are considering buying a boat. Second, the agent may not be familiar with this type of insurance or have access to the right policies to insure a boat, or he or she may specialize in one area, such as term life insurance . Whether you have a boat or plan to purchase one, it is important to discuss your insurance needs with your insurance agent. If you are not satisfied with the types of policies available, you can ask for a referral to a specialty agent who is more familiar with boats and boat coverage policies.
Do I need this type of insurance?
- Most boat owners will need insurance unless their vessel is small enough to be covered by a homeowner's insurance policy. Boat coverage is important because it covers not only the cost of any damage but also provides liability insurance in the event of boat-related property damage or injury and any lawsuits. Although there is no law mandating boat insurance, it can provide boat owners with peace of mind that they are protecting their assets. Some lenders, however, may require a insurance policy on boats that are secured by a loan.
Is boat coverage expensive?
- Several factors affect the cost of an insurance policy, particularly the size and cost of the boat. Larger, more expensive boats will naturally be more costly to insure. Another key factor is the area where the boat will be used, as certain areas are prone to hurricanes, which could mean an additional premium for hurricane haul-out. Boat owners can benefit from discounts on insurance if they take certified boat safety education courses or store their boat in a protected location. Overall, rates can range from a few hundred dollars to several thousand dollars depending on the amount of insurance coverage.
How does insurance coverage for my boat work?
- An insurance policy is actually similar to an auto insurance policy, which also bundles together different types of coverage to insure against damage to or caused by the boat, injuries caused by the boat or while aboard it, and lawsuits that are boat related. Also, these insurance policies can be customized to meet boat owners' needs, often including add-ons such as fuel spill coverage, salvage assistance, and hurricane haul-out.
How do I qualify for boat insurance?
- Just as with other insurance products, those applying for insurance will need to provide the insurance company with information about the boat and any loss history. Most boat owners generally have no problem qualifying, but someone with prior claims may have trouble. Sometimes boats that are used in dangerous areas or have unusual features may be difficult to insure. If boat owners want to insure their boat through a rider on a home insurance policy, there may be additional restrictions.
How do I determine how much insurance I need?
- When determining the amount of insurance to obtain, the size and cost of the boat are the two most important factors. If a boat is damaged in a covered cause of loss, insurance may be the key to replacing or repairing the vessel. When considering liability insurance, boat owners need to weigh whether they can handle the risk of paying on a boat-related lawsuit. They also should consider insurance that may be required by a lender or by a marina where the boat is stored. In some cases, insured boat owners may find that other insurance policies, such as an umbrella liability insurance policy, will provide enough coverage for certain risks.
What is the minimum for boat coverage?
- While there is no state or federally required minimum for insurance coverage, if consumers borrow from a bank or other lender, then they may be required to purchase boat insurance. In addition, many marinas require that boats stored there have adequate insurance. Also, in certain areas, liability insurance may be required. Boat owners should check local laws and meet with an insurance agent to discuss boat-related regulations.
Does insurance coverage for my boat have to be with the same company as my other insurance?
- It is not necessary for boat owners to buy boat insurance through the same company that provides their other insurance. However, if the boat is insured through a rider on a homeowner's insurance policy, for example, then the boat owner must stick with the existing insurer. Often, insurance companies may offer discounts to customers who purchase more than one policy from them, which is one way boat owners might be able to save money on their new policy.
What questions will my agent ask me when I call?
- Insurance agents will commonly ask for pertinent details about the boat and how it will be used, including its size, its manufacturer, and any safety equipment kept on board. Agents will also ask boat owners where they plan to drive the boat and where and how they will store it, both on- and off-season. In addition, agents must inquire about boat owners' history of boat ownership and any previous accidents or claims. Boat owners should definitely mention if they have taken a boating safety course as well.
What does the rating system of A, A+, A++ mean, and how can I find out my insurance company's rating?
- Insurance companies receive ratings from firms that specialize in assessing the solvency of financial companies. A.M. Best is one of the more well-known companies that issues insurance company ratings, and others include Moody's Investors Service, Standard & Poor's, and Fitch. Each company has its own system for grading, but higher rated companies are generally more stable and more likely to pay claims, so it is important for consumers to be comfortable with the rating of their insurer. A.M. Best assigns letter grades to insurers, with A++ being the highest, which means that insurance companies with a rating below B is considered "fair" and those with lower grades could be in financial trouble. Ratings can be found on A.M. Best's Web site (www.ambest.com), and many insurers also advertise their ratings in documentation or on their own Web sites.
Boat Insurance Directory