Spring is an Ideal Time to Ensure Your Boat Insurance Keeps You Covered.
For those living in states without year-round boating conditions, many boat enthusiasts eagerly await the days when temperatures consistently rise above freezing. This marks the moment to retrieve the boat from its storage and look forward to enjoyable days on the water.
This season provides an excellent opportunity to assess your marine insurance policy and on-water towing coverage. The insurance policy purchased years ago for your new boat might now be insufficient. Insurance professionals advise consumers to examine their policies annually, paying close attention to the details. Items that were once included may now be excluded or subject to limits on the amount the insurer will reimburse.
While reviewing your boat insurance policy, consider these key areas:
Modifying Coverage
A few months after Kelly Stevens upgraded his boat’s electronics using a bonus, the Garmin screens and advanced stereo system were stolen. When Stevens attempted to submit a claim, he discovered he was severely underinsured because he hadn’t informed his insurer about the costly modifications.
“We can’t know what we’re not told,” explained Becky Reinaker, assistant vice president of underwriting for GEICO. “Every year, we send a renewal and ask that you review it… if you have added any additional coverages, like fishing gear or boarding equipment, we advise informing us, particularly at renewal time.”
When contemplating whether to raise policy limits, it is wise to consult a broker and evaluate your circumstances. Have your assets grown? What upgrades have you implemented on your boat? Have you altered your boating location? These fundamental questions are what the broker will pose while assessing the required insurance coverage.
Reinaker recommends that boaters think about an umbrella policy which covers liabilities extending beyond the limits of boat, auto, and homeowner insurance policies. Umbrella policies are generally affordable, especially for higher amounts like $1 million or $2 million.
Sinking Situation
Experiencing a boat sinking is often one of the most dreadful experiences for a mariner. If the boat lacks adequate insurance, it can quickly become an exorbitantly costly affair.
While most boaters focus on replacing the boat, they frequently overlook the expenses related to retrieving it from the depths of the ocean or a marina slip. These costs are often deducted from the final payment for a replacement vessel.
“(Insurance companies) will cover the boat, but if it’s in pieces underwater, back in the bayou, it may involve large costs for recovery,” stated Scott Croft, vice president of public affairs for BoatUS. “It might require a crane, special assistance, and could be very expensive. You cannot leave a boat in that state; it’s your responsibility to remove it.”
Croft emphasized that boat owners should find policies that include full salvage coverage. “If your boat is insured for $40,000, you should also have an additional $40,000 for salvage and wreck removal,” he stated. “The costs to recover certain vessels can be quite high.”
State and federal bodies can also impose recovery fees for responding to a sinking, particularly when fuel cleanup is necessary.
Transparency is Key
No one appreciates dishonesty, especially not an insurance company faced with a potentially large claim. Using your boat while it is believed by your insurer to be out of commission is a significant red flag, and any related incident will likely not be covered.
The same principle applies if the insurer is misled about the boat’s storage location. Insurance firms consider weather factors, especially in hurricane-prone states. Croft explained, “Some storms affect more states than others, which influences rates accordingly.”
Reinaker from GEICO noted that insurers will need a strategy for relocating a boat if a significant storm is predicted. Typically, boats in dry storage and marinas lack coverage from the business’s insurance policies.
“Properly preparing your boat and being aware of impending storms is essential,” Reinaker added. “If you’re not around, ensure someone responsible is available to secure it during a storm.”
It’s crucial to take numerous photographs of your boat, particularly the helm and any additional equipment. These images will be helpful during the claims process if needed.
Cost-Saving Strategies
Unfortunately, boat insurance premiums can be quite steep, particularly for high-end center console boats. However, there are several strategies to lower your boat insurance costs.
If you haven’t done so in a while, consider taking a boating education course from the local U.S. Power Squadrons to secure a small discount. A strong driving record, both on and off the water, will help keep premiums manageable.
Boaters may also think about raising their deductible, which can decrease the premium. Doing this means you’ll need to pay more out of pocket, but if your history is good, it could be beneficial.
If you reside in a climate where boating is impractical during winter, insurers often provide discounts for winter layup. While the boat is in layup, there is no coverage for on-water use, so don’t take the boat out unless you inform the insurance company first.
Ultimately, factors like the boater’s location, type of boat, and their boating experience will influence the price of boat insurance.
“Insurance companies will assess experience and responsibility,” stated Reinaker. “How many years has the individual been a boat owner and operator? Have there been any past losses? The boat’s location is also a significant factor.”
Essential Coverage
More insurers are now providing towing coverage with their plans, which is a wise choice according to Croft. A 20-mile tow at sea can easily exceed $3,000 without insurance or a plan like SeaTow or TowBoatUS.
“If you neglect to examine your policy annually or ignore what your insurer is offering, you may miss out,” Croft warned. “Specifically, you can obtain on-water towing at a significantly lower price when it’s included in your policy compared to purchasing it directly from TowBoatUS. This is because when you add towing to your policy, it only applies to that boat, which is a critical difference.”
Croft also advises boaters to consider adding consequential damage coverage to their policies, which protects against loss due to wear and tear, such as mold or rot, rather than from an accident. Many insurance providers have stipulations that require vessel maintenance, making it crucial to keep maintenance records.
“We urge everyone to review your policy, check your salvage coverage, and inquire about consequential damage coverage, as not all companies provide it,” Croft noted. “This could determine whether you receive compensation for your sunk boat while your neighbor with a different policy does not. It happens frequently.”
As spring approaches and it’s time to prepare the boat, don’t forget to reevaluate your insurance policy as well. Comprehensive insurance will provide you with peace of mind both on the water and off.