We get this question a lot: Isn't my boat insured under my homeowner's insurance?
You may have heard that your boat is covered on your homeowner's insurance. Don't assume it to be true in all cases, because it definitely is not and depends on what kind of boat it is that we are talking about. Read on.
Insurance Coverage Gaps and Your Boat
Spring has arrived! And flowers and lawns are blooming with beautiful and vivid colors. Springtime is also when boat enthusiasts often start to consider purchasing a sailboat or powerboat. Many consumers, however, lack an understanding of the multifaceted loss exposures associated with boat ownership. And boat lovers may mistakenly believe that coverage applies under their homeowners policy for these loss exposures.
Most homeowners policies, however, only insure losses arising from certain low-valued or low-powered boats. Therefore, you should contact a licensed insurance agent before buying a boat to discuss the proper insurance protection for it. You do not want to be "underwater" when it comes to the appropriate watercraft insurance. Consider the following tips to assist you in this process.
- If you purchase a motorboat or sailboat valued over $1,500, you probably lack proper coverage under your homeowner's policy for physical damage losses to the boat itself. A separate watercraft or boatowners policy is necessary to cover the physical damage to boats over this value.
- If you are contemplating the purchase of a sailboat, inquire about its length. If the boat is 26 feet or longer, do not look to your homeowners policy for liability coverage. For motorboats, there are strict horsepower restrictions under the homeowners policy for liability coverage. For example, only insureds who own or lease boats with outboard motors of 25 horsepower or less have liability coverage under most homeowners policies, yet most powerboats have motors with horsepower far exceeding this amount. This liability coverage restriction also necessitates the purchase of separate watercraft insurance.
- Ask your agent about the types of boats you are considering. Some insurance companies, for example, decline to insure personal watercraft, such as jet skis and wave runners, since some of these crafts can reach speeds of 60 or 70 miles per hour. The US Coast Guard reports that personal watercraft account for a disproportionately high number of accidents. Many insurance companies also refuse to cover houseboats, homemade or kit boats, competition bass boats, and speedboats. You may have to pay an extra premium through a specialty insurance company to cover these types of craft.
- Be wary of purchasing older watercraft. Many insurance companies reject boats over 15 or 20 years of age because they tend to experience higher loss frequency than newer boats. You may have trouble finding insurance coverage for older boats or end up paying an extremely high premium.
- If you purchase an older boat, consider ordering a marine survey or inspection of it before the sale. Marine surveys point out deficiencies in watercraft that may cause you to reconsider the purchase or renegotiate its price.
If you do not already have one, purchase a personal umbrella policy in addition to a watercraft policy, particularly if you buy a speedboat or a watercraft designed for water sports such as skiing. Some personal watercraft have a higher potential to cause damage or loss of life. Umbrella policies are relatively inexpensive, and most but not all forms do not have limitations concerning watercraft, but they will provide excess limits above the liability coverage in the watercraft policy.
International Risk Management Institute, Inc.
Are All Boat Insurance Policies the Same?
No, all boat policies are not the same. Coverage can vary from one carrier to another. Our advice is to make sure you discuss what's covered with us or with your agent. Check out a previous article on this subject here.