Boat Insurance Basics: 3 Noteworthy Facts

Boat insurance is a special insurance designed to protect you and your boat in the case of incurred damage or if you are involved in an accident. Buying a boat can be exciting but it is important to not lose sight of boat insurance, which every boat owner should carefully consider. While boat insurance is not required by law, it can greatly help you avoid a nasty financial situation if your boat is damaged or causes damage to another boat. Because it is not as common as other types of insurance such as homeowners or auto insurance, you should familiarize yourself with some of the basic facts before purchasing a boat insurance policy.

1. There are Different Ways to Purchase Boat Insurance

It is often possible to purchase boat insurance from the same company that covers your homeowners or auto insurance policies. Additionally, there are insurance companies that specialize in boat insurance, and these companies can sometimes give you better rates. On the other hand, many insurance companies offer discounts to those who bundle multiple services together, such as insuring your boat with the same company who you already deal with for your car or homeowners insurance. Remember that you should shop around a bit before deciding which boat insurance policy is the most suitable for you.

2. The Cheapest Boat Insurance is Not Always the Best     

You need to find out policy rates and degrees of coverage from various companies before deciding which one best suits your needs. Remember that the lowest premium, or monthly insurance payment, does not always mean the best deal. While it may cost less, the quality of services you will receive may also be significantly lower than you need. Basically, the best deal is one that offers quality, comprehensive coverage for the lowest price possible.  Before you start looking for boat insurance, there are some terms that you should familiarize yourself with.

3. You Should Know Common Terms in Boat Insurance

These are terms that you can expect to hear a lot when talking about boat insurance. These terms refer to different types of coverage that are available to boat owners:

  • Agreed-value coverage means that the insurance company will pay you an agreed upon price if the boat is damaged to the point of being a total loss.
  • Actual-cash value coverage declares that the insurance company will pay you the value of your boat at the time of an incident if the boat is declared a total loss.
  • All risk coverage typically provides coverage of the boat, its machinery and any cargo on board.
  • Protection and indemnity coverage protects you if your boat damages another boat or if someone is injured while on your boat.

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