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TWELVE BOAT-INSURANCE DETAILS YOU NEVER THOUGHT TO ASK ABOUT
Twelve boat-insurance details you should know but never thought to ask about before.
As an experienced boater, you probably know a thing or two about boat-insurance policies. For instance, when buying boat insurance, you’d likely ask whether the policy pays the agreed value or the actual cash value of the boat. Also, you might know about a trend similar to auto insurance in which boat insurers now offer 24/7 on-water and on-road towing services—but these might not be right for every boater. You probably know these things and more.
But how can you know what you don’t know?
We asked Boat U.S., one of the largest recreational marine insurers, for a list of uncommon boat-insurance-policy waivers and riders not typically included in basic policies. These items might add cost to your insurance, but they also might save the day if you ever need them. We’re not saying you need them, nor do we assert that this is a complete list. We simply want to arm you with knowledge of what to ask for when buying boat insurance.
TOTAL-SALVAGE COVERAGE
Let’s say a storm deposits your boat in a marsh hundreds of yards from a road or the water (which happens to many boats during named storms, according to Boat U.S.). Since equipment can neither be driven nor floated over to the boat, and because of environmental regulations, retrieving the boat, which might be basically unharmed, can cost tens of thousands of dollars. Consider this coverage even if you want to purchase a basic liability policy to simply meet the requirements of your marina and have no interest in insuring the value of your boat—this is also a consideration for boaters in hurricane-prone areas. Boat U.S. recommends salvage-coverage dollar limits that are separate from your hull coverage but equal to it. That’s because some companies limit salvage coverage to a small percentage of the policy’s hull value, in essence making the boater pay for more salvage costs out of pocket.
FUEL-SPILL COVERAGE
Federal law makes boaters responsible for fuel spilled for any reason. It could be that oil in the bilge from a sloppy oil change gets discharged when your bilge pump kicks on, or maybe the boat sinks in the slip, and fuel or oil leaks as a result. However it happens, environmental-damage assessments levied for fuel spills can range to almost $1 million, and the cost of cleanup may be charged as well—a fee that may dwarf the fine. Fuel-spill coverage should be considered even if seeking a basic liability policy, but it can be better to have separate coverage because it will likely cover more. Fuel-spill coverage is a consideration
WE ALL KNOW THE STORIES—SOME MAY HAVE EXPERIENCED IT FIRSTHAND—OF TORN STERNDRIVE BELLOWS OR BROKEN THROUGH-HULL FITTINGS CAUSING BOATS TO SINK.
for all boaters whose vessels have fuel tanks, but those who boat near sensitive ecosystems such as coral reefs, oyster beds and wetlands might want to give fuel-spill coverage an even closer look.
UNINSURED BOATER
This boat-insurance coverage likely sounds familiar to boaters with automobile insurance because it is similar to the uninsured-motorist coverage some auto drivers purchase. For the uninitiated, this provides additional coverage for bodily injuries aboard your boat caused by a collision with a hitand-run boater, where the other boater either takes off without being caught or is operating without insurance, as the name implies. Note that many boats and boaters are uninsured because boat insurance is not required in most places.
HURRICANE HAUL-OUT COVERAGE
OK, this one is pretty much a well-known must for boaters in hurricane country who keep their boats in the water, but for those boaters moving to the coast from inland areas, or new boaters, we’re including it in the article. In a nutshell, this coverage pays a portion of the costs to have the boat hauled, prepared and secured or tied down by professionals, or moved by a licensed captain. As an example, the Boat U.S. Marine Insurance Program pays 50 percent of the cost of labor up to $1,000
FUEL-SPILL COVERAGE SHOULD BE CONSIDERED EVEN IF SEEKING A BASIC LIABILITY POLICY—SO ASK ABOUT IT—BUT IT CAN BE BETTER TO HAVE SEPARATE COVERAGE BECAUSE IT WILL LIKELY COVER MORE.
to have the boat hauled or moved, or, if you are out of town, have a professional prepare your boat, and the haul-out does not penalize the policyholder. Before purchasing this coverage, we recommend asking boat haulers for an estimate of the cost of a hurricane haul-out as described above. That way, you will be in a better position to know whether you want it.
BOAT-TRAILER COVERAGE
If you were to get into an accident while trailering your boat, your boat policy might pay for any loss-related repairs to the trailer (check—it is often separate coverage and not included), but any damage caused by the trailer to other people or property would be up to your tow-vehicle insurance to cover. Naturally, this coverage is best considered by trailer boaters. Also, be sure to find out if there are any geographical limits to the coverage.
PARTIAL-LOSS DEPRECIATION WAIVER
If you are a boater who owns an older boat, one that is, say, 15 or 20 years old, you’ll want to know about this coverage and decide whether it is for you. You see, many insurers depreciate major items such as canvas, engines, generators and sails at a steep rate after two years. That means as your boat ages, the “new-for-old” financial-advantage benefit of some insurance coverage is lost. What a partial-loss depreciation waiver does, if you
WHAT A PARTIAL-LOSS DEPRECIATION WAIVER DOES, IF YOU ADD IT ON, IS ESSENTIALLY STOP THE CLOCK AND CONTINUE TO PAY NEW-FOR-OLD CLAIM RATES ON THESE ITEMS.
add it on, is essentially stop the clock and continue to pay new-for-old claim rates on these items.
DINGHY/MARINE ELECTRONICS ENDORSEMENT
Insurance policies for expensive vessels often carry high deductibles. If the boater has separate coverage for the dinghy and electronics, the decision to file a claim for a lost dinghy or stolen marine electronics can be easier to make. Some might think this is just for large boats, but we can say that, as a result of testing so many new boats, many boats as small as 23 or 25 feet are often equipped with $15,000 in electronics. If you cruise far and wide or boat in an area where crime is high, you might want to think about purchasing a dinghy or marine electronics endorsement.
WATERSPORTS COVERAGE
Like an angling endorsement, expensive equipment is provided with higher-limit coverage, and entry fees into tournaments might be reimbursed if you must miss out for a covered reason. This coverage can be bundled, as BoatU.S. does, combining actual cash value for boards, skis, and scuba and snorkel gear with increased medical-payments coverage and entryfee reimbursement for competitive wakeboarders or water-skiers.
If you can afford to own a boat, you probably know all too well that insurance companies are not in business to pay claims—they make money collecting premiums. That said, make sure your boat-insurance needs meet your financial requirements as well as your tolerance for risk. Questioning the coverage proposed to you is smart shopping. Hopefully, this article helps you do just that.