A substantial investment in a boat warrants similarly strong insurance coverage. Aside from potential damage to your boat, the possibility of a substantial liability claim against you following a boating accident exists.
In these litigious times, anyone who appears to have assets could be a good target for a lawsuit that could deplete your resources. Even if insurance is not a requirement in the area where you boat, it’s worth considering.
What Is Boat Insurance Covered For?
Like vehicle insurance, boat insurance combines multiple forms of coverage into a single policy.
Standard types of coverage include:
Liability coverage for property damage. This covers damage caused when your boat collides with another watercraft or someone’s property. It helps pay for the repair or replacement of other boats in case of an accident or property damage. Assume you’re pulling into a spot at a neighbor’s dock and reverse into the cleats and mooring poles, damaging the dock. In this instance, your boat liability insurance may be able to reimburse your neighbor for the necessary repairs.
Liability coverage for bodily harm. This coverage compensates individuals for injuries caused by you, including legal bills, court judgments, and settlements. It is important to note that most boat insurance policies do not protect you if you are transporting your boat. Your auto insurance policy may provide coverage if you hit or damage someone while towing. Because personal injury lawsuits can be costly, having enough liability coverage is essential. A reasonable rule of thumb is to obtain adequate liability insurance to cover the amount you would lose in a lawsuit.
Physical damage insurance. This coverage pays to repair or replace your boat if it is damaged in an accident or destroyed by fire, lightning, or storms or if it is stolen. Damage can be covered whether your yacht is in the water or being trailered across the country. Some insurance providers allow you to choose between actual cash value and replacement cost coverage. Actual cash value coverage includes depreciation in the value of your boat if it is damaged, destroyed, or stolen. Instead, consider purchasing replacement cost coverage to ensure full reimbursement.
Coverage for medical expenses. This coverage reimburses you for minor medical expenses if you or your passengers are injured in a boating accident.
Coverage for uninsured or underinsured watercraft. While you hope your other boats have adequate covering, this is not always the case. If an uninsured or underinsured boater strikes your vessel and injures you, this coverage will pay your medical fees.
