Five Tips for Buying Boat Insurance
By Mike Skyba
Buying boat insurance can be
challenging for any boater. That's because unlike auto insurance,
boat insurance policies are not standardized-coverage can vary
widely for the same boat depending on who sold the policy and how
informed a buyer you are.
But the smart boater can make the right insurance choices with these
"Top Five Tips for Buying Boat Insurance".
KNOW THE INSURER: Boat insurance can be "added on" to a
homeowner's policy, purchased from an independent insurance agent or
directly from a marine insurance specialist. Buying a policy through
a reputable agent or directly from a marine insurance specialist is
the best way to go. "Adding on" to your homeowners' policy may seem
to work just fine, but when there's a claim, you will appreciate a
company that knows more about boats than homes. Homeowner's
policy often limits or does not provide some of the marine coverage
like salvage recovery.
AGREED VALUE vs. ACTUAL COST VALUE: There are two main
choices for boat insurance and depreciation is what sets them
apart. An "Agreed Value" policy cost more but it pays more; it will
cover the stated value of the policy in the event of total lost. For
example, a total lost on a $50,000. Agreed Value policy would pay
you $50,000. More importantly, a partial lost an Agreed Value policy
replaces most items on a "new for old" basis-with little or no
depreciation, depending on the carrier. Hence, a claim for a stolen
four-year-old GPS would get you a new, comparable replacement GPS.
"Actual Cash Value" policies cost less but only pays
up to the actual cost value at the time the boat or property
were lost-depreciation is factored in all losses. Actual Cash Value
policies are better suited to less experience boats or when you are
not concerned about total lost.
KNOW THE SALVAGE TRUTH: If you have
chosen an "Agreed Value" policy, stay away from those that limit
salvage coverage-that's the amount that may be paid to a
salvor to reward him from saving your boat from peril and bringing
it safely to a repair yard. You want a policy that provides salvage
coverage up to the amount as the boat's Agreed Value, and does not
subtract these dollars, or the policy's deductible from the
total amount available to fix the damage.
For example, a $50,000 Agreed Value policy should have $50,000
avaible to salvage the boat from the bottom of the lake/ocean
and than pay up to $50,000 for repairs. Other wise, you could end up
short when replacing or repairing the boat because you may have to
use some of your repair funds to pay off the salvage cost first.
Boats added to a homeowner's policies most often run this risk.
SPEAK TO ME IN A LANGUAGE I CAN UNDERSTAND:
Make sure you understand exactly the coverage you are getting,
as well what's not covered? Always ask for an explanation in
ONE SIZE DOES NOT FIT ALL:
Have an old, trusty, paid-off sailboat? Spanking new (and
highly leveraged) 36-foot express cruiser? Slick and fast bass boat?
Personal watercraft? Each has its own insurance requirements. A good
insurer will walk you through a list of questions so you will not
have to guess the answers when something unexpected happens.
Taking courses in Safe Boating put on by some
organizations like the Canadian Power Squadrons can offer insurance
discounts. Talk to other boat owners about recommending a
reputable and reliable insurance company.