Insuring Your Watercraft: Understanding Your Options

Posted: Jun 27, 2017

Owning a boat or watercraft is, for many people, the pinnacle of many years of work and the result of hours of daydreaming, researching, and working towards their goal. For many watercraft owners, purchasing a boat and spending their golden years sailing around in balmy waters is the accomplishment towards which they worked for years or even decades.

Yet, owning a boat brings with it some added responsibilities. One of them is making sure that your investment is protected in the event that the unthinkable happens. If your boat is damaged or even sunk as a result of an accident, a storm, or some other event, you don’t want to be in the position of watching all your hard work slip beneath the waves. Rather, you want to be protected so you can be back out on the water with a minimal amount of fuss.

Getting the proper coverage for your boat or watercraft begins with understanding how insurance works when it comes to these vehicles. Here are some things to keep in mind, and some advice on what you may want to consider.

Many Types of Watercraft Require Their Own Policy

Some people believe that they can carry a strong homeowners policy and that this policy will protect them from the loss of their possessions—including their boat or watercraft. This is not entirely correct.

When it comes to boats and watercraft, most homeowners insurance policies are quite limited. They limit the size (and sometimes the speed) of the craft they will cover. What’s more, the dollar amount of coverage is usually limited to a very small amount such as 10% of the value of the home. Finally, these policies frequently exclude coverage for marine-specific risks that your boat or watercraft will be subjected to.

These types of arrangements work well for things like a canoe, but if you own a larger boat or a faster watercraft such as a jetski, you could find yourself in serious trouble if something were to happen. For this reason, it’s usually a good idea to talk to your insurance agent about obtaining a separate policy specifically to cover your boat or watercraft.

Understand What Type of Watercraft Insurance You Need

When it comes to insuring your boat or watercraft, not all policies are the same. Generally speaking, there are two types of insurance policies. You should understand the specifics of each, and know what it is you want out of a policy before you elect for coverage.

The first kind is the “actual cash value” policy. This policy will pay in the event of damage to or destruction of your boat or watercraft, but the amount it will pay is limited. Essentially, the claim adjustor will take the replacement cost of the vessel and deduct depreciation to arrive at an amount. This means that if your boat or watercraft is older, you may find yourself with a payment that is not sufficient to replace it in the event that it is lost.

The second kind of insurance policy is an “agreed value” policy. With this sort of policy, your insurance company will pay you an agreed upon amount in the event your boat or watercraft is heavily damaged or destroyed. This type of policy is best for making sure that you can replace your watercraft, but it will also come with higher premiums than an actual cash value policy.

Of course, boats and watercraft come in all shapes, sizes, and configurations, so there are other specialized types of coverage that are available to you. Make sure to talk with your insurance agent and tell him or her exactly what it is you want out of a policy, then he or she can help you choose the one that will best fit your needs.

Highmark Insurance is Here for Your Boat and Watercraft Insurance Needs

At Highmark Insurance, we love helping our clients protect their investments and their dreams. Contact us today, and let us help you choose the best policy.