A boat owner shopping for coverage for his boat is well advised to try and get the maximum insurance permitted by his financial condition. Boat owners with a range of personal assets should try and get as much coverage as possible as they run the risk of being sued for those assets in the case of an eventuality.
It is beneficial to understand about the various insurance programs available and opt for those that are the most relevant to one??s situation. Factors that affect the choice of insurance programs include the area of navigation, cost of the boat, cost of maintenance, etc.
Boat owners can select a liability limit that generally ranges from $ 100,000 to $ 500,000. Liability coverage is useful for covering not only the cost of theft, repairs, property damage, etc but also for paying the attorney fees in the case of having to defend against claims.
The two main types of physical coverage include Actual Cash Value (ACV) and Agreed Amount Value (AAV).
The Actual Cash Value insurance policy provides coverage for the cost of replacing the boat after subtracting the cost of depreciation. If the repair costs exceed the actual costs of the boat, then the approximate book value of the boat is determined by using pricing books. If the boat is partially damaged, then the amount of money paid to the boat owner is equal to the difference between the total cost of damage and the deductibles.
The Agreed Amount Value insurance policy allows boat owners to insure their boat for an agreed total money value of the boat. This agreed value is the cost of the boat and equipment after allowing for depreciation. Boat owners can also apply for a Waiver of Depreciation which will allow them to claim full insurance that does not consider depreciation.
Boat insurance should include medical payment protection; this will cover the expenditure incurred on medicines and funeral costs up to the limit mentioned in the policy. It may or may not cover coverage for injuries from an uninsured boater; if such insurance is not provided then uninsured boater coverage should be obtained. Towing coverage is also important as it covers the costs of towing/rescue operations that may have to be executed due to mishaps, engine failure, mechanical breakdown, grounding, etc.
In deciding the amount of insurance required, one should consider the fact that total losses are not very frequent and hence coverage for total losses should ideally be the minimum amount that a boat owner can pay for with ease. On the other hand partial losses are fairly common and thus coverage should be obtained accordingly. It is also worthwhile to consider the fact that a percentage of the insured value is deducted; therefore, if the insured value is less it reduces the expenses that a boat owner bears from his pockets in the case of a partial loss. While trying to arrive at a figure for their boat insurance coverage, boat owners must factor in the minimum insurance required by marinas; a minimum of $ 300,000 is required by most marinas.
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