- The Danskin Agency
Boating Season is Approaching – Is Your Boat Insured Correctly?
Tips on Getting the Best Boat Insurance
Owning and operating a boat can be both rewarding and challenging. While you are spending your time on the water fishing, sailing, or just cruising, you don’t need to be worrying about what might happen should you encounter a problem or experience an unforeseen accident. We want you to be fully protected, so you can enjoy your time cruising around on your boat or personal watercraft. Boat Insurance programs are evolving, and it is more important than ever to make sure that you have the boat insurance coverage you need.
Hull Coverage: Agreed Value vs. Actual Cash Value
Your boat insurance policy provides Hull Coverage to insure your boat against physical damage. Boating involves many risks, including fire, collision, damage from storms, and sinking. Hull Coverage provides insurance for damage caused by any of the covered risks. It is important to know the loss settlement option your policy provides for your hull coverage.
There are two main choices of loss settlement for Hull Coverage:
Actual Cash Value
Let’s take a look at what they both provide.
When you insure your boat for Agreed Value loss settlement, the carrier provides this amount of insurance for your vessel in the event of a loss, without any other consideration. This is a desirable option because if you experience an unexpected total loss of your vessel, you know exactly what you are getting in return for it (assuming your claim is approved). Other factors such as depreciation and the condition of the vessel are not evaluated at the time of the loss. Due to the security of the loss settlement amount, the Agreed Value policy does cost more, but it provides more coverage than Actual Cash Value policy does.
Which brings us to our second policy: Actual Cash Value loss settlement. This policy only pays up to the value of what your vessel is considered to be worth at the time of the loss/damage. This option takes into account normal wear and tear, depreciation, and the current condition of the vessel at the time of loss. In most cases, you will receive significantly less in return for a loss from an Actual Cash Value policy than an Agreed Value policy. The advantage of the Actual Cash Value loss settlement is that it is much more affordable than Agreed Value, and many programs will promote this option to lower the premium cost.
Mechanical Breakdown Coverage
Mechanical Breakdown refers to a failure of a part or machinery due to a defect, or other reason the part is unable to perform the intended function. This coverage can be extremely important if you should encounter an unexpected issue with your engine, lower unit, or related parts.
More and more, boat insurance policies are not offering this coverage, or are greatly reducing the coverage according to the age of a vessel. If an issue arises due to wear and tear, there are many factors that will determine whether this coverage may apply. It is important to understand whether your boat insurance policy is offering Mechanical Breakdown coverage, along with the exclusions that may apply.
Coverage for Charter Boat Operations
If you are providing a Charter Service with your boat, whether you are taking your clients out fishing or just cruising around, you will need insurance for your boat as well as for your paying passengers and crew. All charter operations with paid crew must provide Crew Liability insurance, in compliance with the Jones Act.
It is important to verify that your boat insurance program covers the type and amount of charters you provide per year, as well as your navigation area. Some boat insurance programs will only provide coverage for a limited number of charters. If you provide overnight charters, an additional set of rules applies, and your insurance may require a night watchman endorsement.
Other Boat Insurance Options
There are many other considerations when selecting the right insurance policy for your boat. Some of the additional coverage options include:
Medical Payments to Others
Hurricane Haul Out reimbursement
Waiver of Depreciation
Fuel Spill Liability
Wreck Removal / Salvage
Damage to Lift/Hoist
Fishing Tournament reimbursement
The best way to make sure that you are getting the best insurance for your boat is to work with an experienced boat insurance broker who can help you navigate the many details and options available.
Our professional staff here at Danskin would be more than happy to sit down with you and discuss which insurance would fit you the best. If you’d like to learn more about boat insurance, visit our website. Call today to speak with one of our professionals and set sail knowing you and your boat have the protection you need.