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Boating 101: Boat Insurance Frequently Asked Questions

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Maria Neira
November 17, 2020

Buying a boat is exciting! From deciding on what type of boat you want to dreaming up amazing boating adventures, owning a boat opens new opportunities for you. 

In the excitement of becoming a boat owner, there may be a few things you haven't thought about. 

  • Do I need boat insurance? 
  • What happens if I have a boat trailer and back into somebody? 
  • If I join a boat club, do I need my own boat insurance policy?

Here are answers to some common questions when it comes to boat insurance.

Do I need boat insurance?

Legally, many states don't require you to have boat insurance. However, that doesn't mean you don't need it. It’s a smart idea to protect the investment you’ve made, especially since boats can be quite expensive and repairs are never cheap. While out on your boat, you're also liable for any damage you cause someone else or their property.

Will my homeowners insurance cover my boat? 

Maybe. Your homeowners insurance policy may cover small water vessels like canoes, small sailboats or a boat with a motor less than 25 horsepower. Coverage may be limited, though. For instance, you may only be insured for a vessel up to $1,000 in value. Be sure to check your policy for specifics.

What does boat insurance cover?

Boat insurance policies vary quite a bit in what they cover. You need to explain to your insurance agent what you plan to do with the boat and where you plan to go. The policy may only cover you in certain waters, for instance, such as within a certain distance of shore.

When it comes to physical damage, your boat insurance policy will cover loss due to things like storms, vandalism, sinking and fire. Your boat can be insured for either replacement cost or actual cash value. An ACV policy covers the depreciated value of your boat, while a replacement cost policy covers the cost of replacing it with a similar boat.

In addition, your boat insurance policy covers your liability. Similar to auto insurance, it's the damage you cause through bodily injury or property damage because of negligence. You can also buy medical payment coverage; this covers costs if you or a passenger is injured in an accident. You can also buy uninsured watercraft coverage, should another boater without insurance collide with you.

As with other insurance policies, there are coverage limits and deductibles. You can adjust these according to your needs and desire for peace of mind. You can save money through discounts, such as by taking a course that makes you a safer boater.

Do I need boat insurance even in the off-season?

You may think you'll save money by cancelling your policy when it's not boating season. However, it could be stolen or damaged by fire any time of the year. If you keep your boat at a marina, they will probably require insurance throughout the year. You also must maintain coverage if you have a loan on your boat.

What is a marine survey? Do I need one?

Many insurance companies require a marine survey to insure a boat, which often comes as a surprise to people that buy a used boat. A marine survey is a detailed inspection of a boat by a licensed surveyor. A surveyor will evaluate the hull, engine and overall condition of the boat and provide a report.

Even if the insurance company doesn't require a marine survey, you may get a better rate or discounts if you have one. Two places to find a person who can do a marine survey are the National Association of Marine Surveyors and the Society of Accredited Marine Surveyors. What you're looking for is a "Full Condition and Value" survey.

How are boat trailer accidents covered?

Boat accidents don't just happen on the water. They can also happen on land. For instance, you could back your boat trailer into another car. Both your boat and auto policies can come into play for this type of accident.

In general, your vehicle's liability coverage extends to the trailer it's hauling. This means your auto policy will cover damage to another person's property should you back into it. To cover damage to the trailer itself, you need to add the trailer to your auto insurance policy.

You may also be able to cover damage to the trailer under the boat policy. Some insurance companies offer comprehensive and collision on boat trailers. This covers the trailer if you cause an accident and damage the trailer, it's stolen and so on.

Do I need boat insurance if I’m a member of a boat club?

For those who love boating but aren’t sure if you want to own your own boat, there’s the option to join a boat club. How does the boat insurance work then? Who's responsible for damage to the boat or the damage you accidentally cause others?

When you join a boat club, you pay a monthly fee and get access to a fleet of various types of boats. It's almost always the case that the boat club maintains the fleet of boats and provides insurance coverage. You should read over the paperwork thoroughly, though, and ask your insurance agent if you’ll be adequately covered while out on the water.

Happy boating!

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