Unless you’re situated in a state that enjoys boating weather year-round, many boaters are eagerly anticipating the days when temperatures rise consistently above freezing. That’s when they can retrieve their boats from storage for enjoyable days on the water ahead.
This is also an ideal time to review your marine insurance policy and towing coverage for on-water incidents. The insurance policy you purchased a few years back for your new boat might not provide the necessary coverage anymore. Insurance professionals advise consumers to reassess their policies annually and to scrutinize the fine print. What was once included might now be excluded or have limits on the benefits an insurer will offer.
When you assess your boat insurance policy, here are key areas to concentrate on:
ADJUSTING COVERAGES
Just months after Kelly Stevens upgraded his boat’s electronics with a bonus, thieves stole the Garmin screens and high-quality stereo from the console. When he attempted to file a claim, he found that he was significantly underinsured, as Stevens hadn’t informed his insurance provider about the costly upgrades.
It is crucial to ensure your marine insurance includes comprehensive salvage coverage. Photo by BoatUS
“We cannot know what hasn’t been communicated to us,” stated Becky Reinaker, Assistant Vice President of Underwriting at GEICO. “Each year, we send out a renewal notice and request that you review it… to inform us of any added coverages such as fishing gear or boarding equipment that might have been included. We emphasize this at renewal time.”
When deliberating on whether to raise policy limits, consulting with a broker is advisable to evaluate your situation. Has your financial status improved? What enhancements have you made to your boat? Have you adjusted your boating location? These fundamental questions help brokers ascertain the amount of insurance required by a boater.
Reinaker recommends that boat owners consider an umbrella policy, which provides liability coverage exceeding the limits of boat, auto, and homeowner policies. Such umbrella policies are reasonably priced, especially for higher coverage amounts of $1 million or $2 million.
SINKING SHIPS
Experiencing a boat sink is among the top calamities for any mariner. If the boat lacks proper insurance, it can become an exceedingly costly day.
Many boaters focus on replacing the vessel but neglect to consider the costs associated with removing the boat from the sea bottom or a marina slip. These costs are frequently deducted from the final payout for a new boat.
“Insurance companies will cover the boat, but if it’s in three segments at the bottom of the bayou, it may require a crane and specialized assistance, which could be very costly. Moreover, the boat cannot just be left there—removal is your responsibility,” mentioned Scott Croft, Vice President of Public Affairs at BoatUS.
Croft advised boat owners to seek insurance policies that include full salvage coverage. “If your boat is insured with a value of $40,000, you should also have another $40,000 allocated for its removal and salvage,” he added. “Removing certain vessels can incur considerable expenses.”
Local and federal agencies often pursue recovery costs associated with responding to a sinking event, especially if fuel cleanup is involved.
BE TRUTHFUL
No one appreciates deceit, particularly insurance companies that might be on the hook for a significant claim. Using a boat deemed laid up by the insurer is strictly forbidden, and any incidents will not be compensated.
The same principle applies when misrepresenting the boat’s storage location to the insurer. Insurance companies take weather into account, especially in hurricane-prone areas. “Let’s face it, certain storms impact more states than others, so rates are typically influenced by such activities,” Croft noted.
According to Reinaker at GEICO, insurers will require a plan outlining how to relocate a boat in the event of a significant storm. Typically, boats maintained in dry storage and marinas aren’t covered by the business’s insurance.
“It’s essential to prepare your boat adequately, especially when storms approach,” Reinaker stated. “If you aren’t going to be around your boat, have someone responsible to secure it in case a storm comes.” Take multiple photos of your boat, mainly the helm and any additional equipment. These images can facilitate the claims process should you need to file one.
COST-SAVING STRATEGIES
Unfortunately, boat insurance premiums can be pricey, particularly for high-end center console boats. However, there are several methods to lessen these expenses.
If several years have passed, consider enrolling in a boater education course through local U.S. Power Squadrons for a minor discount. Maintaining a good driving record—both on land and water—will help keep premiums reasonable.
Boaters might also think about increasing their deductible, leading to lower premiums. It may result in higher out-of-pocket costs in the event of a claim, but for those with a solid track record, it’s worth contemplating.
If you reside in a region where boating isn’t possible during winter, insurers frequently offer discounts for winter layup. During this period, there’s no on-water coverage, so avoid taking the boat out without notifying the insurance company first.
Ultimately, where the boater lives, the type of boat, and their level of experience will determine insurance premiums.
“Insurance companies assess both experience and responsibility levels,” noted Reinaker. “How long has someone owned and operated a boat? Have there been any previous losses? What is the boat’s location? All of these factors are significant.”
REQUIRED COVERAGE
Increasingly, insurers are providing towing coverage with their policies, which is a wise choice, as emphasized by Croft. A tow over 20 miles at sea can easily exceed $3,000 without an insurance plan or a membership with SeaTow or TowBoatUS.
“Failing to review your policy annually or overlooking your insurer’s offerings may lead to missed opportunities,” Croft warned. “For our services, obtaining on-water towing is at a more affordable rate compared to purchasing an unlimited towing plan through TowBoatUS directly. The primary difference arises because adding on-water towing covers only that specific boat.”
Croft also suggests that boaters consider including coverage for consequential damages. This type of coverage addresses losses due to wear and tear, like mold or rot, rather than incidences. Many insurers include clauses that mandate maintaining the boat, making it important to keep maintenance records.
“We advise everyone to check their policy, verify their salvage and consequential damage coverage, as not every company provides it,” Croft concluded. “This can make the difference between getting compensated for a sunken boat and a neighbor not receiving compensation due to their differing policy.”
As spring approaches and boat preparations begin, remember to review your insurance policy. Good insurance coverage can offer peace of mind both on the water and off.