When it comes to insuring your boat, it’s often best to separate your boat insurance from your homeowner’s policy. Many homeowners’ policies limit or don’t cover marine-specific risks, such as salvage work, wreck removal, pollution or environmental damage. But there are exceptions. Many homeowners policies include perfectly good coverage for smaller boats and motors, usually with a horsepower limit of from 25- to 100-horsepower. While homeowners riders are normally adequate for these boats, be careful to ask the same questions you’d ask any other insurer about damages to your vessel and how they will be paid. Also, most homeowners insurance riders apply only to use in inland waterways, lakes and rivers. Coverage seldom extends outside a coastal inlet or along the beach. If you plan to boat “outside the inlet” you definitely need an experienced marine insurer. Many other factors will lead you to a qualified marine insurer, too, and here are the things to consider.
Insurers consider many factors when deciding whether or not to offer a policy. Almost any vessel can be insured— for a price. You want to consider the following to make sure the policy you purchase meets your needs:
- Age of Boat
- Condition (Does it meet US Coast Guard Standards in effect at the time it was built?)
- Primary residence (If the boat is used as a primary residence)
- Type (Inboard, Outboard, utility, cruiser, bassboat, saltwater fishing boat, performance boat)
- Homemade (Boats without a serial number are tricky but many kits are okay)
- Houseboats with no motor
- Ownership (more than 2 owners)
- Where it will operate (Ocean, lakes, bays, rivers, Great Lakes)
Types of Boat Insurance
There are two basic types of boat insurance—“agreed value” and “actual cash value.” How depreciation is handled is what sets them apart. An “agreed value” policy covers the boat based on its value when the policy was written. While it can cost more up front, there is no depreciation for a total loss of the boat (some partial losses may be depreciated). “Actual cash value” policies cost less up front, but factor in depreciation. In other word, the policy will only pay up to the actual cash value of the boat at the time it is declared a total or partial loss. Eventually, as your boat ages, your insurer will likely insist on an actual cash value policy—and if often gives a substantial savings.
Kinds of Policies
Marine insurance covers a wide array of watercraft. You may be surprised to find what can be insured. Marine insurance policies include:
- Yacht – generally, vessels 26′ and smaller are called “boats,” and “yachts” are 27′ and larger. Yacht coverage tends to be broader and more specialized because larger boats travel farther and have more unique exposures.
- Boat & PWC Rental – Although this is generally not required, rental insurance will help cover any damage the vessel, as well as the operator and passengers.
- Boat Clubs – covers all members of club while operating a boat.
- Professional (ProAngler, Fishing Guides & Charters) – These policies are very customizable and can cover items like travel to a tournament, equipment and more.
What Boat Insurance Policies Cover
How and where you boat determines the type of coverage you need. An “all risk” policy will offer the best protection. However, an “all risk” policy does not cover every type of loss. In insurance terms “all risk” just means that any risk not specifically omitted in the policy is covered. Typical exclusions include wear and tear, marring, denting, animal damage, manufacturers’ defects, design defects, ice and freezing.
You may also be able to add extra coverage. Available options may include: medical payments, personal effects, uninsured boaters liability, and towing and assistance. Most policies will cover permanently attached equipment, as well as items like anchors, oars, trolling motors, tools, seat cushions, and life jackets. Be sure to discuss these options with your agent.
Types of Coverage
This will depend on the type of policy, but common coverage add-ons (in addition to basic ones above) include:
- Specialized Coverage – Coverage for something specific on your boat like an expensive prop or navigation equipment.
- Salvage – Coverage that pays to remove your boat due to damage, from substantial to minor.
- Consequential Damage – Covers a loss that was the result wear and tear rather than an accident (rot, mold, corrosion).
- Towing – Towing your boat across a body of water to safety can cost $400 per hour.
- Cruising Extension – You can get temporary, additional coverage if you plan on leaving the USA (typically to Mexico or the Bahamas).
Hopefully, you will never need to make a claim but if you do, it’s good to be prepared. You are not required to carry proof of insurance on your boat, but it’s a good idea keep claim information handy for an emergency. Ask how the claim process works when you’re shopping for policies. Naturally, it should be quick and easy. In addition, find out if your agent (or other representative) will be available if you need help dealing with the aftermath of a claim, such as arranging for towing or salvage, rather than just cutting a check and leaving.
Shopping for Boat Insurance
Start with a little fact-finding. Ask your boating friends which company they use and how their claims have been handled. The way an insurer has handled claims in the past is a good indicator of the quality of service you can expect in the future.
You can also research insurance carriers at www.ambest.com/ratings. The ratings are an independent judgment of an insurer’s financial strength; look for an “A” rating (excellent) or better.
State insurance regulatory agencies are also a good reference and can be found online.
Boat Insurance Cost Factors
Many factors are used to set the cost of a policy, and they vary among insurers. Here are some items to consider:
- Cruising Area – where you boat
- Boating Safety Education – if you have been formally trained or certified
- Good Driving Records – both boating and driving
- Liability Limits – the higher the limit the higher the cost
- Deductible – the higher the deductible the lower the premium
- Towing insurance requirements for offshore fishing. A 20-mile tow could cost $3,000
If you boat in a hurricane zone, your insurer may expect you to provide a hurricane plan. If a storm approaches, will you have it stored in a hurricane-proof facility or will you tow it or skipper it to a safer harbor. The answer can affect your rates, even lower them, but be prepared to follow the plan, because your coverage may hinge on it.
There are a few ways to reduce your boat insurance costs. For example, if your boating is restricted by seasons and your boat is in storage during the winter, you can get deductions for winter layup. Many insurers offer discounts for good driving records and for anyone who has completed boater education classes. Finally, it usually costs less to be insured in fresh water versus salt, so be sure to discuss where you boat with your agent. You may earn extra savings by bundling your coverage with the same company that insures your home and/or car.
Before you buy your new vessel, it’s a good idea to determine your insurance costs based on your needs.
When it comes to boating, as with most things in life, there is no substitute for experience. This time of year, as boaters all across the country are returning to the water, many are venturing out on boats for the very first time.
IF YOU’RE ONE OF THESE ROOKIE BOATERS, HERE ARE A FEW TIPS TO HELP YOU IN YOUR FIRST BOATING SEASON.
- Check the weather before you hit the water. If you already checked it, check again before you head out. Weather changes, and unexpected storms can sneak up on you. If you’re new to boating, that’s no time to be caught by a surprise squall.
- Get on and off the boat ramp quickly so other boaters aren’t giving you the evil eye. Load your boat ahead of time—not on the ramp. Find an empty parking lot and practice steering with your trailer so you’ll have experience come launch day.
- Dress in layers. It might be warm on land, but you don’t want to get cold if the breeze kicks up on the water. Be prepared for changes in conditions.
- Go slow when docking. If you rush, you could damage your boat, the dock, or worst of all, another boat. If it’s not going well, don’t be too proud to back away and start again. (Read docking tips here)
- Pack more food and water than you think you’ll need. You may be surprised by how boating works up your hunger and thirst. There’s no drive-through on the water, so make sure you’re well stocked.
- Valuables like cell phones, keys and wallets have a way of getting wet or falling in the drink. Make sure they’re secured.
- Leave a float plan. Things can go wrong on the water. Make sure if you get stuck out there, somebody onshore knows when and where to look for you.
- Always wear a life jacket. The vast majority of boating-related deaths occur because victims were not wearing a life jacket. It’s easy to do, and it could save your life.
- Have an on board first-aid kit. When you are on the water, you can’t just run to the doctor’s office if you suffer an injury. Be prepared to treat yourself until you can get back to land.
- Have a tool box. If you have a mechanical problem when boating, you don’t want to be stuck on the water for hours waiting for help to arrive. Have tools and spare parts available so you can fix any problems yourself.
Elux Pontoons is hoping to catch the pontoon-buying public’s imagination this week, as it shows its first 24-ft. model at the Minneapolis Boat Show. The Elux 24 is unconventional in that it’s powered by an electric motor with an innovative topside layout. It’s even more unusual because its owner is the former chief executive of a medical devices company.
Howard Root co-founded Vascular Solutions several decades ago and sold it to Textron in 2017 for $1 billion. Root admits that starting an electric pontoon boat company was quite a sea change after his successful career, but he had no interest in going back into the med-tech industry.
“That industry has changed since I started,” Root told Trade Only Today. “I had a good run with Vascular Solutions, but I was tired of medical devices and managing 750 employees. I retired the day I sold it.”
Before selling Vascular Solutions, Root was stuck in a protracted legal battle with the Food and Drug Administration. A jury acquitted him on charges that his company illegally promoted a line of medical devices. His self-published book, “Cardiac Arrest: Five Heart-Stopping Years as a CEO on the Feds’ Hit List,” details the prolonged court case.
Jones had also been developing a new pontoon concept for five years. “I asked myself a simple question: What if a pontoon didn’t look like a pontoon,” he says. “I wanted to create a pontoon that was tailored for lake cruising but was also sleek and stylish.”
“We’d been business partners for more than a decade with Go-Float,” adds Root, “so this seemed like a natural fit.”
A Tesla owner, Root was impressed with advances in battery power and felt there was a market for an electric boat on inland lakes. He also felt that pontoon boats needed a facelift. “They tend to look like a dance floor with living room furniture,” he says. “We’re not seeing a lot of innovative designs.”
Instead of aluminum, the Elux will be fiberglass with the pontoons integrated into the hull. Root and Jones have also developed their own electric propulsion with a permanent magnet AC motor powered by a 72-volt, 420-amp lithium battery pack. Root says the Elux will have about 10 hours of cruising time at five mph. It can reach a top end of 14 mph. “I think people will appreciate the fact that it’s hassle-free, with no gas or oil, and you almost can’t hear it,” he says.
The boat will be priced at $79,000 for 2019 and that price will rise to $89,000 in 2020. Root says the company will build three boats this year at a facility near Minneapolis. There are no immediate plans for a dealer network. “We’ll go direct for the first two or three years,” he says. “We’re going to deliver them and service them ourselves. It’s important for us to be hands-on with the customers.”
Root says that the slow start is part of the process. “We think it’s a great design and will be a desired product in the boating industry,” he says. “But the easiest way to succeed is to temper expectations. We’ll let the market keep it on track.”