Caution! This material is intended to help you understand the general structure and scope of marine insurance. It does not describe your policy, and is not a substitute for reading your policy. The policy alone governs when you have a loss.
The boat, trailer, dinghy, and personal property on board are all eligible for coverage and separate limits and parameters generally apply to each. Different deductibles may be used in the same policy in order to treat different categories of property differently. For example, the deductible for a boat loss may be different from the deductible for a personal property loss.
Coverage for the boat is often referred to as hull coverage and insures you for loss from direct accidental physical loss or damage, and may include loss caused by a latent defect in the boat. Hull coverage usually includes most equipment considered usual to the operation of the boat including engines, tackle, winches, spars and electronic equipment.
Providing an accurate description of where you intend to use your boat is important at the time you first apply for coverage. After the policy is issued, it is important that you report any changes to your navigational area. Coverage may be void if you travel outside your reported navigational area.
To be sure the boat is covered, if you acquire another boat, advise us immediately, if not before. Some policies contain automatic coverage for a limited period of time without such reporting, but such coverage often contains provisions that may eliminate or modify your coverage. So why risk it? Request coverage immediately!
The limit of coverage for personal property is generally separate from other property covered. When selecting the limit, consider your apparel, sports equipment and fishing tackle. Personal property is usually covered while being carried onto or off the boat, as well as while on board.
Understanding the exclusions of a policy is integral to understanding the coverage. Common exclusions include: wear and tear, osmosis or blistering of fiberglass, delamination, lack of maintenance, insects, vermin, use of the boat in a prohibited fashion, illegal activity, improper boat design, and your intentional acts.
Most boat owners elect agreed value coverage, that is, a stipulated value that an insurer will pay for a total loss. Some insurers also offer a lower premium option that is usually referred to as Actual Cash Value (ACV). ACV coverage essentially means that the boat is covered for replacement cost less depreciation.
Choose a deductible that matches your financial loss tolerance. You might think of the deductible as self-insuring each loss up to the specified limit. Remember, if your policy has separate deductibles for different categories of property covered, you may incur more than one deductible. The challenge is to find the balance between premium savings and loss exposure. Don't choose a deductible that will cause you too much financial pain when and if you have a loss.
Transporting the Boat
Limited coverage for local transportation of the boat is commonly provided but the limitations are such that a careful review of the policy is warranted before transporting the boat. Or, call us!
Marine insurers generally offer you the opportunity to protect yourself from liability for bodily injury, property damage and pollution. How much coverage you should maintain depends upon several factors including your net worth and other liability insurance you carry. One way to think about the limit needed is to consider that those with greater net worth, face a greater likelihood of being pursued for damages beyond the policy limits.
Longshore and Harbor Workers' Compensation
When a person working on your boat becomes injured, you may be liable under federal law. Suffice to say that you want this coverage and that you are better off letting the insurer worry about the precise details of how the law may apply to you.
If someone is hurt on your boat, this coverage provides a valuable benefit. The insurer will pay up to the limit chosen, for medical expenses without you or the person involved having to deal with the issue of liability.
Unfortunately, not all boaters carry insurance. Should an uninsured or unidentified boater be legally responsible for an accident, you will be covered up to the limit chosen for the amount you are legally entitled to recover.
Caution! This material is intended to help you understand the general structure and scope of marine insurance. It does not describe your policy and reading this is not a substitute for reading and understanding your policy. The policy alone governs when you have a loss.