Buying Boat Insurance

Buying Boat Insurance

Hi, this is Scott Croft with Boat U.S. So you want to talk about boat insurance? I know it’s a sleepy subject for many, but here’s why you may want to stay awake.

I’m going to set the facts straight on a couple of common myths about boat insurance. Listen up, and I hope I can make you become a smarter consumer. Come on, let’s go check it out.

Here’s myth number one about boat insurance. If you understand home or auto insurance, then you’ll understand boat insurance. Let me explain why it really doesn’t work that way. Most consumers understand standard home or auto insurance policy language, so as long as each company offers the same policy features, it’s easy to shop on price. However, with boat insurance, each company can write it’s own policy that can include and exclude whatever coverage it desires. That means, one company’s policy can potentially cover everything and another policy would exclude the same loss.

So, here’s what you need to know. The first thing is, generally speaking, a marine specialty insurer, someone who usually deals with boats, will offer better coverage than adding your boat to your home owner’s insurance policy.

True boat specialty policies will have 24/7 emergency response operations to not only take the first report of a claim, but they’re also able to dispatch the resources needed to immediately recover and repair the boat.

Now, let’s take a look at marine specialty insurance. Here’s myth number two. Most marine specialty insurance companies offer similar policies, so now you can simply shop on price, right?

Wrong. Even with marine specialty insurers, big differences in premiums with two different insurance policies can be made up quickly if one policy covers a loss and the other policy does not. Boating insurance is a little strange to some because of the way the policies are written. They start with taking away things, called exclusions, and then adding coverage’s back in. Yeah, I know, it’s a little confusing and not something my high school math teacher would like to see, but here’s another tip.

Check out your policy. Look through your little booklet and find the exclusions to see what your policy does not cover. An exclusion generally starts with wording such as, “any loss caused directly or indirectly by wear and tear, gradual deterioration, mechanical or electrical breakdown, overheating, ice or freezing, galvanic action, rot, etc.”

The next step is to see what’s been put back in the policy, and the most important is consequential property damage coverage. Consequential property damage coverage appeals to many boat owners because it covers the consequences of a loss that was the result of wear and tear, rot, corrosion and that etc. stuff. For example, if a rot hole breaks and causes your boat to sink, consequential property damage coverage will cover the loss.

Here’s another tip. Watch out for the salvage squeeze. Salvage, also sometimes known as wreck removal, is the act of recovering a damaged or sunk boat from the water. Some boat policies limit salvage coverage or combine the salvage expense with other repair expenses using the same pot of money. In plain English, this means that if your boat sinks, the cost to raise or to salvage her, combined with the repair cost, could add up to an amount beyond your policy’s limits forcing you, the boat owner, to pick up the rest of the expenses out of your own wallet.

You want a policy that treats salvage and repair expenses separately. For example, if your boat is insured for $40,000, you should have up to the full value of the policy (40,000 bucks), for salvage efforts, and another $40,000 or a separate pot of money available for repairs or replacement.

Remember, you always get what you pay for, but being comfortable with your boat’s insurance coverage is really what it’s all about. I hope I made this topic a little easier to understand and not so sleepy. In future podcasts, I’ll get into the nitty gritty about specific kinds of coverage, but in the mean time, you can call the Boat U.S. Marine Insurance insurance experts with any questions at 1-800-283-2883. Have a great day and safe boating.

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