For Boat Insurers, Summer Starts in February

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by Jonathan Schwarzberg

For boat owners and prospective boat owners, summer doesn’t start in June.

It starts much earlier than that. In many cases, it starts in February, when a flood of boat shows are held. As a result, brokers and agents often see opportunities for writing new boat policies this time of year.

“Insurers assess the size, type and value of the boat, and the waterways in which it will be navigated, when determining how much you will pay for insurance coverage,” said Loretta Worters, vice president with the Insurance Information Institute (I.I.I.), which is based in New York.

The Coast Guard reported 4,604 boating accidents in 2010, involving 672 deaths and 3,153 injuries. Recreational boating accidents totaled up to $35.5 million of damage to property, too.

According to the I.I.I., a typical boat insurance policy includes deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Additional coverage can be purchased for trailers and other accessories.

The organization reports that most companies offer boat insurance with liability limits starting at $15,000 with the capability of going up to $300,000. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.

Brokers and agents can also consider offering coverage for special equipment kept on the boat, including fishing gear. Towing coverage should be included in the policy.

Boat insurance policies can provide physical damage coverage on an actual cash value or an agreed amount value basis. Both types of boat insurance policies offer important coverage, but with significant differences.

Actual cash value policies covers the replacement cost of the boat, minus the depreciation at the time of the loss. If a total loss occurs, used boat pricing guides and other resources are used to determine the approximate market value of the vessel. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.

Agreed amount value-based policies mean a boat owner and and an insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. These types of policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.

Some discounts are commonly available for boat policies including:

  • Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
  • Coast Guard approved fire extinguishers
  • Ship-to-shore radios
  • Two years of claims-free experience
  • Multiple policies with the same insurer, such as an auto, homeowners or umbrella policy
  • Completion of safety education courses.

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