Understanding Boat Insurance

Despite only covering one type of craft-a boat-a boat insurance policy is truly a bundle of insurance coverages, combining different kinds of insurance for a boat owner, similar to an automobile insurance policy.

The first type of insurance is property coverage, which covers damage to the boat and its contents, whether from fire, theft, or another peril. Most boat insurance policies are considered "all perils," which means that all perils are covered unless specifically excluded. Some common exclusions include damage from insects or mold, normal wear and tear, and overheating of engines, but perils such as fire, vandalism, or storm damage may also be included. Usually boat owners must pay additional premiums or deductibles for obtain coverage of the more common perils, such as windstorm damage. In some cases, only the vessel itself is covered and not any of the boat equipment, depending on the policy terms.

The second part of the policy provides liability coverage, which offers protection against lawsuits and liability that may arise from property damage or bodily injury of a boat passenger while aboard. Some types of coverage are excluded from liability coverage, such as that for fuel spills, but can be insured for an additional premium.

The third section of the policy is for medical payments, which would cover the medical costs of any boat passenger, including the policyholder. If a guest or family member were injured in a boating accident, for example, this part of the policy comes into play, albeit with certain limits.

Besides these three components, a policy might also provide extended insurance for added fees. Additional areas of coverage include salvage assistance, which would help pay the cost of salvaging the boat if it sank or ran aground; hurricane haul-out, which would pay for relocation of the boat to a safer location if a hurricane were expected; and additional coverage for items and equipment on the boat.

Other policies may provide coverage for damage done to the boat or the boat owner by another, uninsured boat. What type of policy and how much insurance boat owners require will depend on the boat itself and the owner's financial status. It is also important to remember that boat owners might qualify for certain policy discounts if they have taken a boating safety class and/or keep extra safety equipment on board.

Consumers interested in purchasing a boat insurance policy should read any policy carefully to make sure they understand the details of their coverage and find out from an agent how this type of insurance would work with other existing policies.

Boat Insurance Directory
Boat Insurance Directory

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