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April 28, 2023
From the time a human first hopped onto a floating log to cross a stream until the present day, we’ve long been attracted to travel on the open water. But just like your car, today’s floating freedom machines come with risks — ones that boat owners will want to insure themselves against. And there are many considerations to keep in mind as you prepare to cast off, whether it’s a in small runabout or luxury motor yacht.
Boat Insurance Basics
If you keep your boat in a marina — whether in the water or in a “dry stack” on land —insurance will probably be required. Most marinas will want a complete copy of your policy before renting you space. Additionally, your lender will likely require you to have coverage if the boat purchase is financed.
For a small recreational boat, common coverage options include:
· Property coverage in case of theft or damage.
· Liability coverage in the event you damage someone else’s property with your boat.
· Medical payments should you or a guest be injured on board.
· Uninsured boater coverage if someone without insurance damages your craft.
· Emergency towing.
· Coverage for the boat’s trailer, if it has one.
· Personal property coverage should someone steal items such as fishing gear, electronics or an outboard motor.
The Value of Your Vessel
You may have the choice of buying “actual cash value” or “agreed value” coverage. If you do have that choice, keep in mind there is a very big difference between them, both in cost and coverage.
Actual cash value means that in case of a loss, an adjuster will determine what your craft was worth regardless of what you paid for it. Especially for older boats, that could mean an insurance settlement that’s far lower than the money you have invested in the craft.
An agreed value policy means that you and the insurance company agree on a value for your boat. If there’s a total loss, that’s the amount they will pay out. Agreed value policies typically cost more because the insurer expects to pay out more in the event of a loss.
Additional Coverage for Your Craft
The cost of oil spill coverage is often nominal, and it could protect you from paying for an expensive cleanup if your fuel ends up in the water. State authorities and the federal EPA take oil spills very seriously.
Emergency towing is also worth considering. Like roadside assistance, it may seem superfluous until it isn’t. A bad fuel gauge could leave you out of gas in a remote area, or a bit of water in the gas tank could immobilize your engine.
Moving on Up
These simple coverages get a lot more complicated as boats increase in size. While the line separating “boats” from “yachts” is fuzzy at best, bigger vessels have unique insurance needs that should be considered.
The very name — yacht — evokes an image of wealth and elegance. If you don’t have one yourself, you may have daydreamed about flitting to and from exotic ports of call, sunlight glinting off the tops of gentle swells and dockside parties at night. If you do have one, your thoughts are likely more practical, like making sure that it doesn’t sink or run into anything — and that it’s properly insured in case it ever does.
Yachts from Stem to Stern
Pretty much anything that floats, from the most humble canoe to a cruise liner to an aircraft carrier, is a boat. All yachts are boats, yes, but not all boats are yachts. While there’s no universally agreed-upon definition, recreational (noncommercial) vessels longer than about 30 feet with sleeping accommodations are generally considered yachts.
According to the U.S. Coast Guard, of the roughly 11 million boats registered in the U.S. in 2017, about 83,000 were longer than 40 feet. There are “ordinary” yachts, typically less than 100 feet; yachts over 100 feet; and “super” and “mega” yachts that measure up to 400 feet or more in length. In case you’re pricing one, a rule of thumb says superyachts will run you about $1 million per yard.
For those with less extravagant tastes (and budgets), a new 40-foot yacht can range from a bit over $500,000 to well over $1 million, depending on amenities, finishes and options. Used yachts, however, can be found in all price ranges varying by make, materials, age and condition. It’s not uncommon for a $150,000 used yacht to have a replacement value of $1 million or more. Along with the lower price, however, can come a higher level of difficulty in obtaining insurance.
These Factors Can Make Waves in Your Coverage Needs
Before you set sail, consider whether any of these factors will impact your yacht insurance needs.
· Navigation limits. Where you’re allowed to use your yacht is important. The least expensive is usually “inland waters,” meaning lakes, rivers and the Intracoastal Waterway. Next comes “coastal waters.” From there, the yacht’s navigation area is defined by region, such as the Caribbean, California and Mexico, Mediterranean and latitude/longitude.
· Hurricanes. Many yacht policies require their owners to move their yachts outside of the “hurricane belt” — generally north of Georgia and south of the Caribbean — during hurricane season.
· Charters. If you intend to charter your boat to guests, your policy will dictate whether or not you can charter and how many charters are allowed.
· Crews. If you employ crew members, you will need accident and injury coverage.
· Security. Yachts can and do get stolen and disappear. As with your car and home, a good security system can reduce insurance rates. Yachts that navigate in certain areas are also vulnerable to attack by criminals on the high seas.
Boats and yachts are more than transportation — big or small, they’re a lifestyle. Our experienced agents can help you navigate the tricky waters of boat insurance to find the right coverage for your craft at a competitive price. Call your local We Insure agent for a fast and free quote.
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The information contained in this page is provided for general informational purposes only and may not be applicable to all situations. We Insure makes no guarantees of results from the use of this information.