FOR IMMEDIATE RELEASE
NEW YORK, February 13, 2012
— With many boat shows scheduled for February, you may be thinking about buying the boat of your dreams. But amid all the excitement of purchasing a new boat, it is also important to factor boat insurance into your decision, according to the Insurance Information Institute
Boat insurance provides physical damage coverage to repair your boat if it is accidentally damaged or destroyed by a covered peril such as collision, fire, theft, vandalism, windstorm or lightning. The coverage is broad, and provides insurance for the boat, including its machinery, fittings and auxiliary equipment, outboard motors, boat trailer, permanently attached equipment (e.g., anchors)—up to an agreed value—and personal property. It also covers: damage caused to someone else’s property; medical payments, for injuries to the boat owner and other passengers; bodily injury, for injuries caused to another person; and guest passenger liability, for any legal expenses incurred by someone using the boat with the owner’s permission.
“Insurers assess the size, type and value of the boat, and the waterways in which it will be navigated, when determining how much you will pay for insurance coverage,” said Loretta Worters
, vice president with the I.I.I.
A boat insurance policy can provide physical damage coverage on an Actual Cash Value or an Agreed Amount Value basis. Both types of boat insurance policies offer important coverage, but with significant differences.
- Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the approximate market value of the vessel. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.
- Agreed Amount Value basis policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.
According to the I.I.I., typical boat insurance policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Higher limits may be available. Additional coverage can be purchased for trailers and other accessories. Most companies offering boat insurance have liability limits that start at $15,000 and can be increased to $300,000. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car. Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.
Boat owners should also ask about discounts for the following:
- Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
- Coast Guard approved fire extinguishers
- Ship-to-shore radios
- Two years of claims-free experience
- Multiple policies with the same insurer, such as an auto, homeowners or umbrella policy
- Completion of safety education courses
THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.
Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500