Boat Insurance tips – While shopping and purchasing insurance for your car is commonly a straight-forward process that involves comparing just a few options and making a decision, shopping for and purchasing boat insurance can be a daunting undertaking. The reason is because with boat insurance, there are many more variable components to the coverage and risks associated with a boat.
For example, insuring a boat will require coverage not just for the hull of the boat itself, but also the engine and any other electrical components that are required for the boat to operate correctly. Many times, the engine alone can cost as much or much more than the hull or the boat itself; even a used engine can cost upwards of several thousand dollars. Boats can be significantly more expensive than cars (especially boats that are over 26’ in length, which would then be considered a yacht, subject to yacht insurance premiums).
Boat insurance Tips when shopping for policies:
You’ll want to adjust your approach when shopping for boat insurance in several key areas. First, boat insurance will require that you’re covered with liability damage for the passengers in the boat and any property that may become damaged in the event of an accident or collision.
Secondly, your boat insurance coverage should guarantee equipment loss due to burglary. That’s especially important if you store your vessel on your property considering the increasing threat of neighborhood and urban marine theft. Also, boats are somewhat more susceptible to a number of external risks that include damage from weather, fire, collision, or vandalism.
Perhaps most importantly, you’ll need to decide which policy valuation method to base your coverage on: actual cash value or agreed value. The differences are subtle, yet the resulting payment in the event of damage can vary substantially. With the actual cash value method, your insurer will determine your coverage payout based on the market price for the boat less accrued depreciation and deductibles.
The issues with the actual cash value method, although the premiums for the policyholder are much more favorable, comes when an insurer releases a much lower than expected payment. The insurer uses a proprietary calculation system to measure your boat’s market value and appreciation, which is not regulated by the Office of Insurance Regulation.
The agreed value method can be more favorable to the policyholder because the insurer will be required to pay out an agreed amount of money with no questions asked. However, the premiums are adjusted for this feature.
The agreed value for most boat insurance policyholders makes more sense for a number of reasons, the most prominent being that there’s no uncertainty in what you’ll be paid at the conclusion of a claims process. Because depreciation will not be taken into consideration, you can wear and tear your boat into any condition without worry – and boat owners know that wear and tear is unavoidable and harsh.
If you’re concerned that the premiums will be not affordable for agreed value coverage, there are other options for reducing the overall cost of your boat insurance. You could choose a higher deducible or a lower agreed value that you may otherwise prefer. Use these tips and take your time when shopping for boat insurance to ensure you receive the best coverage available for your money.
Nevertheless, check out the boating regulations for Florida for more boat insurance tips: Florida Fish and Wildlife Conservation Commission
*Talk to one of our agents to learn more about boat insurance discount.