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The Facts About Boat/Watercraft Insurance

Boaters often want to know whether they have to carry boat insurance to enjoy the water. The answer is that boat insurance can be required for a variety of reasons. For example, some states require that you have liability coverage. Marinas may require you to have boat insurance in order to dock your boat there.

Boat insurance covers damage to your boat, motor, trailer, and personal items in the boat. It protects the boat owner against liability lawsuits and medical payments. Boat insurance protects most watercrafts with engines, including small fishing boats, powerboats, houseboats, yachts, and pontoons.

Some boat owners may assume that their boat is covered under their homeowner's insurance policy. But in fact, there is only limited coverage ($1000-$1500 depending on the insurance company) for damage to a boat on your homeowner's policy. And, generally, the loss must occur at your home.

How Does Boat Insurance Work?

When you buy boat insurance, you must decide on the amount of coverage you need for your boat, the deductible (maximum out of pocket expense per claim) and the types of coverage you need. In the event that you have an accident, experience a theft, or have another loss that is covered under your policy, you can file a claim and receive a payment covering the loss.

As an example, if you were in an accident with another boat that caused serious damage to your vessel, one of the following things would most likely occur, depending upon the insurance coverage you and the other boater own and the laws in your state:

  • If you were at fault, your boat liability insurance would cover the damage up to the limits of the policy.
  • If the other boater was at fault, his coverage would pay for your damages, up to the limits of his policy.
  • If the other boater was at fault, but did not have boat insurance, or did not have enough to cover your expenses, uninsured/underinsured boaters coverage could cover the damages (if you have that coverage in place).
  • Insurance professionals recommend buying at least $1,000,000 in liability insurance, and even more if you have a fast, powerful boat that is both riskier and can cause more damage.
  • For uninsured/underinsured motorists coverage, a typical minimum is $10,000. However, the amount you purchase should reflect the potential injuries and damages you may need to cover if you or one of your passengers is seriously hurt, or your vessel is damaged.
  • Your other coverage amounts, including collision coverage and comprehensive coverage, should be based specifically on the value of your boat.

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