“Unlike other forms of insurance most people purchase — for example, your home or car, which are extremely standardized packages — boat insurance varies quite a bit from carrier to carrier,” BoatU.S.’s Jim Nolan said. “Losses covered by one carrier may be excluded or partially covered by another, so consumers really have to look at the details and the experience of the people they are considering in order to decide if the price is reasonable.”

And sometimes the boat owner’s cost is, on the surface, more reasonable than it may seem at first.

“Given the gaps in various policies, even large differences in premium can be made up rather quickly if you have the wrong loss with the wrong company,” Nolan explained.

As far as the specific policy language is concerned, you must read it to make sure you understand what has been sold to you and if it will meet your needs as anticipated.

“I understand the whole concept of reading a policy is rather laborious, but it is important,” Nolan said. “Look beyond the numbers. Just because a company says it’s going to insure your boat for ‘x’ amount doesn’t mean the policy doesn’t exclude coverage for the types of losses to which you might be exposed.”

A third common mistake is focusing too much on cost.

“Just as with boats themselves, cost is most often related to quality,” said Bruce Wixson with ACE Recreational Marine Insurance. “While it may seem prudent to save a few dollars on premium up front, the boater often pays later in the form of poor customer service and claims adjusting when it matters most — after a claim.”

Rick Stern with Progressive agreed. And, noting that some boaters may seek marine insurance policies through their home or auto insurers to save money, he emphasized again that expertise is critical.

“Many providers offer boat insurance products but don’t necessarily know boats and boating,” he said. “Many boaters think they have the coverage they need through their homeowner’s policy, but this coverage is often very limited. Consider purchasing coverages specifically designed for boats in order to be protected in the areas that are not covered under that homeowner’s policy.”

A final mistake boaters make is misunderstanding the liability insurance known as “bodily injury/property damage” coverage. “While BIPD will provide coverage for injuries caused by a boat owner to another person or damage to another person's property, this liability coverage does not provide coverage for injuries to the boat owner or damage to the boat owner’s own vessel,” Stern said. “Injuries to the boat owner can be covered by purchasing medical-payment coverage.”

He also advised that, to be fully protected in the event of a loss, physical damage coverage will be needed. Boat owners also may want to consider specialty coverages for personal items and fishing equipment, as well as for wreckage-removal services and fuel-spill cleanup.

… And Avoiding Them According to Nolan, the best way to avoid the most common mistakes is simply to do your homework. Dock talk, he advised, is a great resource.

“If you ask around at a marina or the boat ramp (about) who's providing good coverage and service, I think you will get some useful information,” he said. “I'd (also) ask boat repair facilities, independent marine surveyors and adjusters who work with various carriers.

“The other aspect that I'd continue to pound on is that boat insurance is different than most coverage, so it’s important to deal with someone who has expertise in this particular field,” he continued. “While a carrier might be able to repair the fender on your automobile or replace your jewelry after a theft, it may not be able to provide you with the expertise to salvage your boat if it sinks… and avoid fines and penalties for polluting the environment.”

Stern and Wixson both agreed.

“Consult with many providers and agents, and ask lots of questions,” Stern said. “Again, boat owners should work with a provider that is knowledgeable about boats and boating. Boats are expensive investments, and owners should feel comfortable with, and confident in, their insurance provider and the coverages they elect.”

“Work with marine insurance specialists, and know who your agent and insurance company are,” Wixson advised. “You should not be asking yourself these questions after the claim occurs.

“When in doubt, ask fellow boat owners, dock neighbors, club members and even your local marina for references,” he added. “Word of mouth and reputation can be a very powerful tool, and there is no substitute for first-hand advice from those who have suffered a boating claim in the past.”

Boat vs. Yacht Insurance
There IS a difference—do you know it?

Unlike a typical homeowner’s or vehicle insurance policy, the language in boat and yacht policies can vary tremendously from company to company, and even from policy to policy. Insuring a boat is completely different from insuring a yacht.

Yachts are classified as vessels 27 feet or more in length, while boats are 26 feet or less. Agreed-to-value policies provide for all damages incurred, except sails, outboard motors, canvas covers, cushions or other specified items. They do not reflect depreciation or market values, which means you will get a greater settlement in the event of a claim because in a typical actual-cash-value policy, depreciation and market values are subtracted from the payoff you receive.

“Many boat policies have ACV coverage on the hull and equipment, which means those items would be depreciated at the time of a loss,” said Mike Smith of Global Marine Insurance Agency Inc. “Most yacht policies provide agreed-value hull and replacement cost coverage, which is much better. The insured would know exactly what they were getting after a loss, versus having to negotiate with an adjuster as to value.”

Smith also observed that a boat policy is designed for vessels with different exposures.

“For example, a boat policy typically includes unlimited overland transportation on a trailer,” he explained. “A yacht policy would restrict overland to, say, 300 miles.”

Then there are the deductibles. A yacht policy offers a deductible of up to 3 percent for any hull damage. However, deductibles for a total loss, marine electronics loss or a windstorm loss can vary depending on your specific policy. By contrast, a boat policy offers a flat deductible, typically of $250, $500 or $1,000.

“A new option on deductibles is just hitting the market, which is a disappearing deductible,” Smith said. “Every year you don’t have a claim, your deductible reduces by 25 percent, and then you have a zero deductible after that without an increase in premium.”

If the boater does have a claim, the deductible resets to the standard, but it will begin to reduce again with each claim-free year.

“You can only get this on boat policies right now, but I’m sure it’s coming on yacht policies,” he said. The protection and indemnity (liability) feature of yacht insurance provides broad coverage designed to shield you from the effects of maritime law. Your coverage is much broader than with a typical watercraft liability policy, and offers protection to permissive users, captain and crew liabilities, along with the Jones Act, a federal law that allows a seaman who gets injured on the job to bring a suit for damages against his or her employer.

“You’re better served to buy more,” said Bob Luellen of Worldwide Marine Insurance. “We’re a lawsuit-oriented culture, and if something happens, the response will be, ‘You didn’t adequately cover your boat.’”

In addition, yacht insurance addresses salvage to a damaged yacht, legal liability to remove a sunken wreck and uninsured boater coverages. In a typical boat policy, only general liability protection is included. “This is important,” Luellen said. “For example, if your boat sinks in the Great Lakes or any of its tributaries, the U.S. Coast Guard says it must be raised. There will be salvage costs, fuel clean-up – and you’ll have to pay the bill regardless of your coverage.”

Smith observed that while most yacht policies provide salvage coverage, they do so in different ways. Some choose to limit the dollar coverage to a stated amount or percentage of the hull amount.

“The better policies provide salvage coverage up to the total hull value,” he said. “A very important part of the salvage issue is wreck removal. Some companies include wreck removal under their hull coverage, which then limits its value. A true yacht policy will include it under the protection and indemnity limit, which will provide much higher limits and additional coverage.”

Regarding uninsured boaters, Smith said this coverage is usually offered by both boat and yacht policies.

“It’s important coverage for the insured in case he or she is injured or an uninsured or underinsured boater,” he said. “There are many, many uninsured boaters.”

Another difference is that in yacht policies, your legal defense is in addition to protection and indemnity limits, while boat policies offer legal defense within the limit of liability.

“This coverage is generally included,” said Paul Sexton of American Modern Insurance Group. “In our policies it is provided as additional to any limits of liability.”

Yacht policies have warranties, including the seaworthiness, navigation limits territories and navigation lay-up limits. While some boat policies do not require warranties, others may incorporate them.

“Warranties are found among many boat and yacht policies, and they vary widely,” Sexton commented. “Our policies do not generally carry too many warranties. We rely on exclusionary language as opposed to warranties.”

“The typical ones for both are private pleasure use, navigation territory, lay-up and seaworthiness,” Smith said. “Some unusual ones used typically in high-performance-boat policies are named-operator, dusk-to-dawn and locked-trailer warranties. These are serious issues that should be clearly understood by the boat owner.”

The issue of boater education is a critical one.

“Shop wisely,” Sexton cautioned. “The lowest rate should not be the deciding factor.”

Indeed, many boaters consider adding their vessels to their homeowner’s insurance in an attempt to reduce their costs. According to Leah Knapp of Progressive Insurance, a recent survey revealed that many respondents believed they would be covered in specific boating-related situations.

“One-third mistakenly believe that by simply adding their boat as an endorsement on their homeowners policy – meaning the boat has been listed as an asset, the same way someone would add jewelry or other personal items – they would be covered in specific boating-related claims situations, such as lost or stolen fishing equipment and personal belongings, broken-down tow vehicles, oil or gas spills, et cetera,” Knapp said.

“The reality is many of those situations are not covered by a standard homeowner’s policy endorsement. Coverage for those types of losses is available from specialty boat insurers. Boaters should know what coverage options are available and select those that best meet their needs.”

Smith also said that homeowner’s coverage won’t be nearly as broad as a specific boat or yacht policy.

“The cost is substantially less when you add a boat to a homeowner’s policy, but you don’t get near the coverage,” he said. “For a little more money, you get the right protection; you never know what can happen. Specialty marine insurance agents know all the important issues facing a boater and how best to cover those exposures. The old adage still holds true – you get what you pay for.”

“If you need to insure your boat or yacht, the best thing to do is to get in touch with a marine specialty agent,” Luellen agreed. “It’s a specialized market. You’ll be dealing with an adjuster who specifically does boats. Ninety percent of upset clients have problems directly related to mistakes that were made in how the policies were written. It wasn’t intentional; the agent just didn’t know. You also need to be educated, and understand what you’re buying.”

Luellen cautioned that some policies have features designed to make them look better, but these features often aren’t functional.

“Watch out for gimmicks in marketing,” Sexton agreed. “Some companies tout their coverages, but don't get into the weeds with exclusions and warranties that are found throughout. For smaller boat, customers should probably stick with a company that allows them to tailor their policy; many larger companies may package coverages that just aren't needed for the average boat owner.”

What would your current boat or yacht insurance policy pay if you needed to collect from a claim? The following are examples of the policies insured for the same amount and with the same deductible by three different insurance companies. The claim is for both cosmetic and hull damage to a 1999 boat with a repair estimate of $21,000. No other parties are held responsible for damages.

The difference between the amounts paid is based on the fine print of the policy. The bottom line is not the amount of your policy premium, but how much you will collect at the time of loss.

AGREED TO VALUE POLICY WITH REPLACEMENT COSTS
Replacement costs for all damage, excluding canvas coverings. Deductible applied.
REPAIR COST $21,000
LESS DEDUCTIBLE -1,000
YOU RECEIVE ... $20,000

ACTUAL CASH VALUE POLICY
Depreciation according to the boat’s age. If the part or finish is older than 20 years, you’ll receive that portion of estimate. Deductible applied.
REPAIR COST $21,000
LESS DEPRECIATION -7,000
LESS DEDUCTIBLE -1,000
YOU RECEIVE $13,000

MAJOR BOATING ASSOCIATION POLICY
Depreciation will apply to paint, gelcoat, finishes, and out-drive units. Deductible applied.
REPAIR COST $21,000
LESS DEPRECIATION on PAINT & GELCOAT -3,000
LESS DEDUCTIBLE -1,000
YOU RECEIVE $17,000

Boat Insurance Myths

Let’s clear up some common misunderstandings about insurance.

Myth: The entire country is paying higher boat insurance premiums because of hurricane damage.
Fact: Some boat insurers price their policies based only on claims experiences in individual states. This means that Ohio customers won’t pay more for their insurance due to the hurricanes in Florida.

Myth: My boat insurance covers me anywhere I decide to use my boat.
Fact: Some insurance companies only provide coverage on the body or bodies of water where the boat is most frequently used, or they limit coverage to within 100 nautical miles of a predetermined home port.

Myth: If I bundle my insurance policies, I’ll get a cheaper boat insurance rate.
Fact: Just because a boater buys more than one product from the same insurance company doesn’t always mean they are getting the best rate available. In many cases, there are savings to be had by shopping around and combining policies from different best-in-class insurance companies.

Myth: If I add my boat to my homeowner’s policy, I will get the same protection as a stand-alone boat insurance policy.
Fact: A boat is a big investment for most people and, the fact is, there’s a lot of protection available to boaters from specialty boat insurers that a boater can’t get with a standard homeowner’s policy endorsement.

Source: Progressive Insurance

Tips On Buying Fishing Boat Insurance

ALEXANDRIA, VA, April 17, 2008 -- BoatU.S. Angler is a membership program that's part of the nation's largest association of recreational boaters whose mission is to protect the interests of boat-owning freshwater anglers. With that in mind, it recommends that anglers should ask these five questions when shopping for insurance for their fishing boats:

1. Do you need an "actual cash value" or "agreed value" policy? If you have a claim, actual cash value policies take depreciation into account when reimbursing for a loss. For example, if your 12-year-old bass boat is totaled, you will be reimbursed for its current market value. Actual cash value policies are generally the less expensive option. On the other hand, agreed value policies are more expensive, but pay for repairs or replacement up to the value stated on the policy - except for a few specified items - regardless of the age or condition of the boat or equipment.

2. Is my fishing gear covered? Any fishing boat insurance policy should automatically include some type of coverage for expensive tackle. If the boat is trailerable and used in freshwater, you may find a policy that includes this coverage without any additional cost.

3. What is the fine print on using towing services? Some fishing boat insurance policies include on-the-water towing or roadside assistance service. The problem is that when you need to call upon these non-emergency services - such as an on-the-water gas delivery, a tow back to the launch ramp or roadside tow vehicle jumpstart - it counts against you as an insurance claim. Find an insurance company that offers them but does not require you to file an insurance claim in order to use them. You shouldn't be penalized when taking advantage of these valuable services.

4. Where can I go? Unlike car insurance that is good for every state you drive in, most boat insurance policies have what's called "cruising areas" limiting where the policy is in force. Trailer your fishing boat outside those areas and you'll need to call your insurer for an "extension" to ensure coverage remains in effect. Find an insurance policy that doesn't put limits on where you can trailer your boat.

5. What about tournament coverage? If you fish tournaments, make sure you have the liability coverage required. What if you've paid your entry fee but miss the tournament due to a breakdown while trailering? Look for a policy that offers some type of reimbursement for your entry fee if trailering troubles or other covered losses prevent you from competing.

Source: BoatU.S.

Survey by leading boat insurer, Progressive, reveals boaters put their vessel ahead of major milestones in their lives and are happier for it

Are you worried about the value of your home or the cost of your daily commute? Well, maybe its time to rethink your priorities. In a recent survey of more than 1,000 boat owners conducted by Progressive, a leading boat insurer and the number one seller of personal watercraft insurance in the country, nearly half of boaters surveyed said they bought their boat before they purchased a car or a home.

The result is some pretty happy boaters. While some may believe a “boat owner’s two greatest days are the day he buys his boat and the day he sells it,” most boaters surveyed (38 percent) disagree. In fact, 66 percent of boaters say they “love boating” and describe their overall experience as “smooth sailing.” One in four boaters surveyed even said their biggest worry was simply finding time to use their boat.

So what could be behind all this glee? It seems that many boaters surveyed got into boating during more carefree times in their lives. Nearly a third of boaters surveyed said they bought a boat before they got married (28 percent), had children (30 percent) or even graduated college (19 percent).

Unfortunately, the carefree nature of boaters surveyed may be affecting their practical side. While 70 percent of boaters say they know they should have insurance, even in the off-season, 29 percent admit to having no boat insurance at all.

“A great experience with your boat can quickly turn bad if you’re not properly insured,” said Progressive’s Dominic Mediate. “Things like 24/7 claims service and specialized coverages such as Emergency Towing and Labor and Total Loss Replacement are designed to help get boaters back on the water fast in the event of a loss.”

And you better believe that boaters are not so willing to give up the good thing they have going. Twenty percent of boaters said that they would NEVER sell their boat and six percent went as far as to say they would only sell if threatened with physical harm.

The allure of the water also seems to create a kinship and loyalty among boaters. So much so that 15 percent of boaters say they’re more likely to vote for a political candidate if he/she is a boater. This is especially good news for the GOP, as Republicans are more likely to vote this way (19 percent) compared to Independents (16 percent) and Democrats (15 percent).

They’ve got you covered

American Modern Insurance Group
amig.com

BoatU.S Marine Insurance
boatus.com/insurance/

Fritsch-Kinney Marine Insurance
f-k-agency.com

Global Marine Insurance Agency
quotemyboat.com

Hanover Insurance Group
hanover.com

ACE Recreational Marine Insurance
www.acegroup.com

Progressive Insurance
progressive.com

Richmond Insurance Center
richmond.webagent4u.com/

Travelers
travelers.com

Worldwide Marine Underwriters
worldwidemarineins.com

Next Page