As the name implies, boat owners’ insurance is a kind of insurance designed to safeguard boat owners. It’s akin to car insurance, as it shields the owner from claims related to physical damage to their vehicle, as well as injuries or fatalities that may occur while operating that vehicle.
Potential buyers of insurance should take a close look at the details of their boat owners’ insurance policy, since the coverage options and costs can differ significantly based on the insurer and the specific type of boat being insured.
How Boat Owners’ Insurance Works
Basically, it works on the same fundamental principles as other common types of insurance. In return for a series of monthly premiums, the insurer takes on the responsibility for various potential risks linked to owning or using a boat. For boat owners’ insurance, these risks might include things like physical damage to the boat, loss or theft of belongings on the boat, or injuries or fatalities involving passengers or third parties.
Boat owners can get insurance for all sorts of boats, including yachts, sailboats, and even houseboats. The coverage in the policy will be customized based on the boat’s value and how it’s likely to be used. For example, someone with a houseboat might want to insure against damage to their home, but they might not need coverage for accidents if the houseboat is always docked. Conversely, a yacht owner would probably want to cover both types of risks and also protect against liability to others.
Additionally, it can cover essential items for safe boating, like life jackets, oars, and anchors. There could also be extra coverage for electronic devices, such as TVs, GPS units, and radios. Any personal belongings stored on the boat might also be included under a general theft or loss category, similar to what you’d find in a typical home insurance policy.
The Example
When you’re looking for insurance for boat owners, it’s crucial to think about what expenses the policy will actually cover. For example, a lot of policies won’t pay for transporting a boat if it’s been damaged or destroyed. So, while the policy might cover replacing the boat, it won’t cover the costs of towing or cleaning up the wreckage. In the past, the Coast Guard used to help with towing, but now they only do it in cases where passengers are in danger or if there are no other options. Commercial towing companies can charge $150 an hour or more, so you need to factor that into your budget if your boat owners’ insurance doesn’t cover it.
Another thing to think about is personal liability. Back in 2018, a boating accident in Minnesota highlighted this issue when a passenger was seriously injured and found out she wasn’t covered by the boat owner’s insurance. Unlike car insurance, which covers everyone in the vehicle, boating insurance doesn’t automatically cover passengers. Boat owners can fix this by getting medical riders, which are extra insurance policies for passengers. But keep in mind, these can be pricey and usually have low coverage limits, like $10,000 per claim.