Boat Insurance

Top 10 Boating Tips!

1. Always wear a life jacket and insist that your crew and guests do the same. Approximately 75 percent of all fatal boating accident victims drowned in 2009.(1) Eighty-four percent of those who drowned were not wearing a personal flotation device (PFD) or life jacket. Always have an adequate supply of personal flotation devices aboard. Make sure that children are wearing appropriate life jackets that fit correctly. Drowning was the reported cause of death for approximately 50 percent of the children in boating accidents in 2009. Seven out of every 10 boaters who drowned were on vessels less than 21’ in length. In cold water areas, life jackets are even more important. A fall into water colder than 60 degrees can induce “cold shock” – a sudden gasping for air that can increase the risk of drowning, especially in older people.

2. Never drink alcohol while boating. Alcohol use is the leading contributing factor in fatal boating accidents and the leading factor in 16% of all boating deaths in 2009. Stay sharp on the water by leaving the alcohol on dry land.

3. Operator errors account for 70% of boating accidents – take a boating safety course. Eighty-six percent of all reported boating fatalities in 2009 occurred on boats where the operator had not completed a boating safety course.(1) You may even qualify for a reduced insurance rate if you complete a safety course. Contact your local Coast Guard Auxiliary, U.S. Power Squadron chapter(2) or visit www.uscg.mil for more information on courses in your area.

4. Stay in control by taking charge of your safety and that of your passengers. Boaters between the ages of 36 and 55 accounted for the highest rate of accidents, injuries and fatalities in 2009.(1) Don’t forget that safety begins with you.

5. Understand and obey boating safety recommendations and navigational rules. Imagine the mayhem that would result if car drivers disregarded highway traffic laws. Know and understand boating safety procedures and rules of navigation before taking to the water, and practice them without fail.

6. Operate at a safe speed and always maintain a careful lookout. Overall, operator inattention, operator inexperience, excess speed and improper lookout were the leading contributing factors in all reported accidents.(1) Know your boat’s limitations as well as your own. Take note of visibility, traffic density and the proximity of navigation hazards like shoals, rocks or floating objects. Don’t invite a collision by going faster than is prudent.

7. Check the weather forecast. A calm day can quickly turn ugly on the water. Keep an eye out for changing weather conditions and stay on top of the forecast while boating. Promptly heed all weather and storm advisories.

8. Hyperthermia is a significant risk factor for injury and even death while boating. Cold water accelerates the onset and progression of hypothermia since body heat can be lost 25 times faster in cold water than in cold air. The closer you are to rescue support the better your chances are, therefore an Emergency Position Indicating Radio Beacon or Global Positioning System interfaced Emergency Position Indicating Radio Beacon (EPIRB/GPIRB), and/or a Personal Locator Beacon (PLB), is recommended especially when boating in waters that are below 59ºF. These safety devices should be considered when boating in waters of any temperature. Boaters can be at risk of hyperthermia in warm waters, where expected time of survival can be as little as two hours in waters as warm as 60 – 70ºF. To learn hypothermia risk factors and how to better your chances of survival, visit http://seagrant.umn.edu/coastal_communities/hypothermia.

9. Use a carbon monoxide (CO) detector. CO can harm and even kill you inside or on the deck of your boat. All internal combustion engines emit carbon monoxide, an odorless, tasteless, colorless, poisonous gas that can make you sick in seconds and kill in minutes. Even just a few breaths in high enough concentrations can be fatal. CO symptoms are similar to seasickness or alcohol intoxication, and can affect you whether you are underway, moored or anchored. Remember, you cannot see, smell or taste CO so know the symptoms of carbon monoxide poisoning and avoid extended use of the transom area when engines are operating. To learn more about the symptoms of CO sickness and how to keep you and others safe, visit www.uscg.boating.org/safety/carbon_monoxide.aspx.

10. File a float plan. The U.S. Coast Guard recommends that you always tell a friend or family member where you plan to go and when you’ll be back. Make it a habit before leaving on any boat trip. The proper officials can be notified promptly if you don’t return when expected.

Lots of Options...How to Choose

First, you need to know that there are three types of "boats."

  • Anything less than 16 feet long is usually called "personal watercraft" by most insurers. This includes Jet Skis and Wave-runners.
  • Boats are 16 feet to 25 feet, 11 inches.
  • Anything at least 26 feet long is classified as a yacht.

You will find that insurers have varying appetites for these types of watercraft. For this insurance, smaller is often not better. In fact, personal watercraft tends to be more accident-prone than most kinds of boats and yachts.

Some insurers won't provide coverage for your personal watercraft at all or will only provide coverage if it is part of a larger policy. Your policy should include coverage for injuries to you and your passengers, the craft itself, liability (for damage and injuries to other crafts and people) and theft.

**If you use your watercraft for water-skiing, make sure you get coverage for this exposure as well. (Depending on the insurance company, it may not be automatically covered.) You can also get coverage for the trailer(s) you use to transport the watercraft.

Insurance for Powerboats and Sailboats

In the insurance world, "boats" are usually smaller powerboats and sailboats. Standard policies for boats cover damage to the craft, including damage caused by fire, lightning, theft, vandalism, collisions, and windstorms.

The coverage is usually available for the boat itself, outboard motor(s), the boat's trailer and personal property on the craft that is part of the normal operation of the vessel. Some insurers offer separate coverage for fishing equipment.

Depending on the insurance company and the age of your boat, you may find a variety of settlement options in the event that your boat experiences a total loss.  The best coverage, usually available only on recently manufactured boats, is "replacement cost" where the company will buy you a similar brand new boat.  Other options include "agreed value" where you and the insurance company agree in advance what the settlement value will be in a total loss, and "actual cash value or ACV" where the insurance company will pay the fair market value of the boat at the time of the loss up to a specified rating base.

The standard boat policy also provides liability coverage, which is usually offered in increments of $100,000 to as much as $1 million. Therefore, it is similar to auto insurance liability in terms of what is available.

Most boat policies also cover medical expenses incurred by you, your family and any other passengers onboard. Some policies also provide coverage for injuries caused by uninsured boaters or by boaters who don't have enough insurance. If this sounds like uninsured motorist coverage in an auto insurance policy, it basically serves the same purpose.

Tip: If you're shopping for boat insurance, it's wise to consider those policies that offer "UIB" coverage. Our agents would be happy to discuss this with your further.

Insurance for Yachts

If your watercraft is 26 feet or longer, you may need to buy yacht insurance, which provides basically the same coverage as boat insurance, but the policy terms (or vocabulary) are different. Under a boat policy, coverage for damage to the craft is called "physical damage."

Under a yacht policy, the boat is referred to as "hull." Liability coverage under a yacht policy carries the name "property and indemnity," which insurance people often abbreviate to P&I. As with boat liability coverage, P&I is available in increments of $100,000. Depending on the size of your craft, you can buy P&I limits from $300,000 to as much as $50 million.

Tip: Like boat insurance, you should seek a yacht policy that offers coverage for medical payments (for you and your passengers) and uninsured boaters.

The cost of your boat or yacht policy is based on a variety of factors: horsepower; how fast it moves (it can cost as much as 50% more to insure a speedboat than it does a sailboat of similar size); where it is to be used; age of the craft and experience of the vessel's operator.

Tip: Insurers often offer discounts of 5% to 20% to those boat/yacht owners who have taken an approved boating safety course. (In some states, such courses are required to operate a boat or yacht.) Discounts are available, from some insurers, for newer vessels and protective devices (depth finders, ship-to-shore radios, burglar alarms). You can also save money on the policy by electing a higher deductible.

Like boating itself, watercraft insurance is not cheap. As such, it truly pays to shop around. There are a lot of different policies and coverage options available. Some policies might be significantly cheaper than others, but they don't offer the coverages you need.

Tip: This is a complex area of insurance with lots of options. Talk to our office. Let us help you to assess the many options out there and find the coverage that best suits your needs and best protects your assets.