Article by Capt. Steve Katz
Be Sure to Insure
Fishing and boating with friends and family is a fun activity, catching fish and enjoying time on the water. Owning and maintaining a boat is a lot of work, time consuming and can be expensive.
Preparing for a boating and fishing trip also includes having the right insurance for you and your boat.
Unlike automobile insurance, boat insurance is optional in many jurisdictions. Even the most basic boat insurance policy is a good idea for the prudent boater. If your boat is financed, there are often strict insurance requirements.
The possible perils on the water require a much wider variety of insurance policy options than you might be familiar with such as an automobile, homeowners or renters’ insurance policies. These policies are often streamlined to work for most people in most situations.
When it comes to boats, there are many more variables that need to be considered with basic and optional coverages for most situations.
Like other types of insurance, boat insurance contains two basic sections- physical damage and liability. Physical damage covers accidental loss or damage to the boat, machinery, and some possessions. The liability or Protection and Indemnity, covers your legal obligation to third parties. Legal liability can arise from bodily injury or loss of life, damage to someone else’s property and may cover a legal defense if you are sued in conjunction with the operation of your boat.
Coverage for physical damage to your boat pays for repairs to your boat as a result caused by a wide range of perils. Many insurance policies have an “all risk” clause that covers most any physical damage that is not specifically excluded. Typical causes of loss can include wind, rain, hail, wave action, fire, theft, vandalism; collisions with docks, submerged or floating objects, or even other boats. If you have a trailered boat, be sure your policy includes damage that can happen to your boat while trailering or stored on land. One caveat is that the boat owner has the responsibility to maintain their boat and normal wear and tear is often excluded from claims.
Physical damage is often capped at maximum value – either agreed value or actual cash value. It is up to you to select the type of value your policy represents. Agreed value normally pays the amount on the policy in the event of a total loss. An actual cash value policy provides less coverage than an agreed value policy but generally at a lower premium cost to the boat owner. An actual cash value policy provides payout up to the current market value of the vessel in the event of a total loss, considering depreciation and the condition of the boat at the time of the loss.
What if I have a boat but I’m borrowing a friend’s boat for the day?
Your own boat policy may contain an option for a “non-owned” or “operating other watercraft” liability coverage which allows your own insurance to cover you for a liability while operating someone else’s boat. The other boat owner’s insurance would often continue to cover physical damage.
Liability options for your policy you may want or need for your boat:
Personal Property
Personal property covers your possessions in and on the boat, like clothing, personal effects, electronics, sports and fishing equipment, there may be detailed exclusions on your policy, review to see what is covered.
Emergency Towing & Assistance
While many boaters have a membership in a marine towing service, it’s a good idea to be sure your insurance policy also has towing and assistance in the event you have an issue outside coverage area or exceed the limits of your towing membership.
Salvage Costs & Loss Protection
Covers the cost, up to your policy limits, if you take measures to protect your boat from further loss or damage, or if the recovery of your watercraft is considered salvage.
Pollution/Fuel Spill Coverage
In case of pollution or fuel spill, you want to be covered with up to $939,800 (the statutory limit of the Oil Pollution Act of 1990) for cleanup, in addition to liability limits.
Hurricane Haul-Out Coverage
If you happen to boat in a storm-prone area, this coverage pays for some or all the expenses of hauling your watercraft out of the water and into safe storage prior to a named storm.
Temporary Shore-Based Workers
Another policy add-on will cover you for liability under the Federal Longshore and Harbor Workers compensation act – this will cover your statutory liability for temporary shore-based workers, such as mechanic or marina employees if they become injured aboard your boat.
Charter Boat
If you take paying passengers aboard your boat – you will often need additional coverage for your vessel when it is used as a charter boat versus a pleasure boat. If you are a boat owner that employs paid crew members, you should ensure that your policy covers liability for the crew under the Jones Act and general maritime law. Be sure to check your coverage, you don’t want to find out coverage is excluded when operating as a charter boat.
Medical Payments Coverage
Most policy’s cover medical payments for an injury that occurs in the conjunction with your boat, even just stilling at the dock and an injury occurs when boarding or disembarking your boat. Most policies have many optional coverage amounts – be sure you select a limit that matches your potential exposures based on how you use your boat – this coverage is available both in “per person” and “per accident” events.
Location & Season
Boats often travel to a variety of waterways and climates – Many insurance policies have geographic boundaries - outside these boundaries – your coverage may not be valid. Some policies have seasonality limitations based on specific calendar dates tied to geographic boundaries. Some policies in the mid-Atlantic and northeast expect you to haul, store and winterize your boat during the off-season – or lay-up, unless you have a specific exception. Other policies may require your boat to be geographically distant from a hurricane prone zone for a certain period of the year.
While simple on the surface, boat insurance is much more customizable than most traditional consumer insurance.
Watercraft insurance policies are as varied as the boats and owners they insure, be sure to review your insurance policy to see if it meets the needs of how and where you use your boat. Additionally, be sure you take advantage of any discounts available based on operator certification and safety accessories.
Until next time...
Stay Grounded
