Knowing what to purchase in the realm of boat insurance is as important as any other investment we make. At Smith Mountain Lake we enjoy our boats throughout the year yet may not have considered whether we have the best coverage on it in case something goes wrong. And it is important to know what issues would be of greatest import when we do buy boat insurance. Lori Wolak of The Lake Channel brings some of those issues to our attention in Part 2 of this article.
There are more subtle differences that you should be aware of that can affect your ability to replace or repair your boat should it be damaged. There are two types of boat coverage to consider, agreed value or stated value and actual cash value. Agreed value policies require agreement between you and the insurance company on the value of the boat hull and everything attached to it. If you add a tower or other accessories at a later time, make sure you add these to the policy or they won’t be covered. An actual cash value policy takes depreciation into account and gives the insurance company the option of replacing the boat with a like boat or giving you the cash. While the agreed value policy might be better if your boat is a total loss, it might not benefit you most if you experience a partial loss. This is because the deductible is going to be a percentage of the value. A higher value means a bigger deductible.
Some policies have exclusions that limit what kinds of damages will be covered. They can exclude damages by underwater objects as well as freezing. What boat owner in their right mind would have a policy that won’t cover damage from underwater objects? Do you know if your trailer is covered or not? Some policies won’t cover it if it isn’t listed. Not every boat accident happens in the water.
Another issue that will greatly affect payout in an accident is liability. There are two main types, split limit, and protection and indemnity. The split limit might be set up as 50/150/50. If you had this coverage and had an accident, you would have $50,000 in coverage per person, $150,000 in coverage per occurrence, and $50,000 in coverage for property damage. So if you have five people involved in the accident, you only have $150,000 in coverage to split between those five people. That’s only $30,000 each. With this type of coverage, the more passengers involved, the lower the covered amount is per person. Protection and indemnity mean there is a single dollar limit for liability and property damage combined. Do you know if your coverage includes towing liability? Towing liability covers anything being pulled by your boat – pretty important for boat owners today!
Some policies cover emergency services if needed. You might be able to get an umbrella policy. It will pay for damages for which you are deemed liable after all other policy limits are exhausted. Pollution liability should also be considered. If your boat sank, you might be held liable for cleaning up the oil, gas, and other contaminants it released into the environment. You should also know if your policy has any navigation limits that could affect you. Water depth, and what states you are covered in would be explained in the navigation limits.
There are more details to consider, such as the lay-up period and operators, depending on your individual needs. The best way to be sure you have the coverage you need is to find a reputable insurance firm and have them review your policy with you. The time to make sure you have the right coverage is before you need it! So, start the new year by making sure your coverage is really what you think it is. Safe Boating!
Thanks for this helpful article goes to Lori Wolak of The Lake Channel.
