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A boat is a large purchase and considered a luxury item for many people. You can put a lot of money into your boat, whether it's commercially available or custom-built. Like you would with a car, it's wise to take out a boat insurance policy to cover your boat in case something were to happen to it. But how exactly does boat insurance work, and does it cover theft?
Boat insurance generally covers both damage and theft as a basic standard. The possibility of theft is one of the main reasons to purchase boat insurance in the first place. This provides coverage while the boat is on a personal dock, marina, or even during transportation.
Boat insurance is not a common topic and it's not always easy to find clear and helpful information on the topic. We've put together this article to explain the details you should keep in mind when shopping for boat insurance.
What Does Boat Insurance Theft Coverage Protect Against?
Most often boats are stolen directly from private marinas or docks. Basic theft coverage comes standard with boat insurance theft from these locations and may cover theft during transportation. Depending on your policy, you may even have your hauling trailer covered. It is important to check several insurance companies and carefully read the comprehensive insurance package. You want to make sure that you would be covered for the uses that apply to your boat.
What's Covered if Your Boat is Broken Into?
Basic boat insurance generally covers the vessel itself and any equipment that is permanently attached. This would commonly include things such as the anchors, fuel tanks, motors, horns, lines, and lights. Unless specifically added to the policy coverage, personal equipment like televisions, fishing equipment, and diving gear may not be covered. You should always make sure you have the appropriate coverage for the things you leave on your boat and not just the boat itself.
Personal possessions that are not related to the operation of the boat like, cellphones, glasses, jewelry, and clothing are generally not covered. If you have homeowners insurance however, it may be possible to get coverage for those belongings.
Does Homeowner's Insurance Cover Boat Theft?
While there are some provisions regarding your boat that can be found in your homeowner's insurance policy, they are generally very limited. In most cases, home insurance will only pay up to $1,000 for damages to your vehicle or theft. Most home insurance policies have a deductible that is similar to or even higher than $1,000, so it may not be worth it to even file a claim.
Your homeowner's insurance can, however, be used to cover the personal belongings that are in the boat. If you had an expensive piece of non-boat related equipment and it was stolen from your boat, you could file a homeowner's insurance claim on that. This type of homeowner's coverage in conjunction with a traditional boat insurance policy together can cover your boat entirely and your belongings on the boat.
Is Boat Insurance Required Like Car Insurance?
Unlike car insurance, no state has mandatory insurance minimum requirements. You may be tempted to not buy into boat insurance or to cancel your policy when your boat isn't in use, especially during winter months. But this could leave you uninsured if your boat is stolen or incurs covered damages during those months.
The price of a personal boat can be very similar or even much higher than a car. It is natural to want to buy insurance coverage for your vehicle, but not always so common to think of insuring your boat. In 2017, the United States Coast Guard counted 4,291 recreational boating accidents that resulted in 658 deaths, 2,629 injuries and $46 million in property damage. Even without considering accidents, natural disasters, theft, and accidental damage can also happen. If your boat is as expensive or more than your car, you have more to lose financially if something were to happen to it.
Does Boat Insurance Cover Other Drivers?
It may seem like a simple thing that boat insurance covers other drivers. After all, many car insurance policies have a provision for this as a part of liability coverage. This happens to be different from boat insurance. It is not common for a standard liability boat insurance policy to cover other drivers. You would need to take out an umbrella policy to cover your boat being driven by someone else. Umbrella policies are costly but if you foresee yourself lending your boat to friends or family, then it would be a good idea to take out umbrella coverage preemptively.
What is Covered Under Marine Insurance?
Marine insurance is actually different from boat insurance. Marine insurance is specifically for the commercial use of boats and watercraft. It covers the loss or damage of ships, cargo, terminals, and any transport where the property is transferred, acquired, or held between the points of origin and the final destination. A subset of marine insurance is also cargo coverage. Cargo coverage can be used to protect cargo and shipments both on and off boats.
If you own your boat for the only recreational reason you should stay with liability insurance and umbrella coverage if you share your vehicle. It's unlikely marine insurance will be useful unless you also use your boat commercially. If you happen to use your vehicle for both residential and commercial use, you should consult your insurance agent and ask where your premiums are better spent on the best coverage.
Is Boat Insurance Expensive?
Boat insurance is highly variable based on a few key factors. Unlike car insurance, not that many people own boats relative to car owners so boat insurance varies more. The main components would be the state you live in, the type, size, and age of your boat, the size of the motor, and whether it will be used inland or on open sees. Boat insurance can range from as little as 75$ per year to as much as $500 a year or more. The rule of thumb is that you'll end up paying 1.5% of the value of your boat per year to have it fully insured. That would be 450$ a year for a $45,000 boat.
If I Park My Boat at a Marina or a Storage Facility, Do I Still Need Coverage?
If your boat is stored inside or outside in a marine storage building, the primary insurance may be held by the facility owner. In that case, your policy may provide secondary insurance or fill in any lapses in the facility's coverage. It is important to contact the dock or storage facility you intend to use beforehand and ask about whether their coverage would extend to your personal vehicle. That way you can see if their coverage is acceptable to you and if you should adjust your own policy to better fill in any gaps.
Insure the Things You Care About.
Boating can be a fantastic leisure activity and bring you good experiences for years. Whether you cherish the few months of the year you can take your boat out to sea or you spend almost all your free time on the water, you want to keep your boat and assets protected. It's important to insure the things that enrich your life so that you can fully enjoy them without worries.