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Watercraft Insurance FAQ

Whether you're a boat, yacht or pleasure craft owner, the importance of having it properly insured cannot be stressed enough. 

1.What do Boat Insurance policies usually cover?

The vessel's value and size, as well as where and how you use your boat will usually determine the kind of coverage you need. The types of loss you want to be insured for can also determine your policy terms. Liability insurance, for example, will cover the boat owner for damage caused to other boats or injuries caused to others. It provides no protection for the boat itself though, so this policy is usually preferred for older boats. Hull insurance is an all-risk, direct damage policy that will pay you an agreed amount of hull coverage. Some boaters also add Protection and Indemnity to their policies, which covers accidental damage, legal fees, pollution damage, wreck removal and towing. You may also be able to add extra coverage options, such as medical payments, personal effects, and uninsured boaters liability. Finally, most policies will also cover permanently attached equipment, as well as anchors, oars, life jackets, and tools. 

2.What is the difference between an actual value and agreed value policy?

When you purchase a policy, it will either be an actual value or an agreed value policy. Actual value or replacement value policies are usually only recommended for new boats, since they take into account the actual value of the boat minus any depreciation from its age and condition. With agreed value policies, an amount close to the estimated market value of the boat is written into the contract and this should be enough to allow the boat owner to replace a damaged vessel with not a brand new boat but one that is comparable to the previous one in size, age, and quality.

3.What are some common exclusions not covered by boat insurance?

Exclusions differ from policy to policy but some common ones include: wear and tear, gradual deterioration, weathering, infestations, improper storage and transportation, faulty machinery or damage caused by marine life. Less common exclusions may include crew number or skill requirements, chartering, negligence, and use of the boat in a crime.

4.What do insurers consider before deciding whether to offer a policy?

Insurers consider many factors before determining whether to cover your vessel. Some of them are: age of boat, value, length, speed, condition, type, ownership and where it will operate.

5.What factors can affect the cost of my policy?

Again, factors vary among insurers but the most common ones that may affect your premium are: 

a.Where you boat.

b.Whether you have been formally trained or certified on boat safety.

c.If you have good boating and driving records.

d.The limits of liability - the higher the limit, the higher the cost.

e.What your deductible is - the higher the deductible, the lower the premium.

6.Am I legally required to have boat insurance?

It definitely isn't a legal requirement on all waterways, but the high value of boats themselves and the risk of potential injury make it worth having. In addition, many marinas do require some form of insurance if you wish to use a slip or mooring there, and if you are financing the purchase of a boat by means of a loan, your bank will also require insurance so that it can be repaid in case of an accident.


 For more information on watercraft insurance, email us at: [email protected]

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