Consider options when insuring boats


POSTED: Sunday, March 08, 2009

The worldwide economic blowout that has curtailed spending in so many areas of our lives has, of course, affected recreational boaters. Such nonessential activities are often the first to be curtailed when times get tough.

Fuel costs have thankfully leveled out for the moment, but nonetheless the Boat Owners Association of the United States (BoatU.S.) has recently offered tips to its 600,000 members on how to save money on another boating expense: insurance.

To begin with, BoatU.S. advises boaters to do a reality check by making sure their boats are really worth what they're insured for in today's market. If they're not, owners may be able to reduce their premiums by reducing that value.

It also points out that most boat policies are either for an “;agreed value”; or an “;actual cash value.”; The former usually costs more, but reimburses more, whereas the latter costs less, but then all losses are depreciated. Boat owners must weigh the benefits of either type of policy.

BoatU.S. recommends in addition that boaters ask for a discount from their insurance companies if they can refrain from submitting small claims or they can manage to carry a bigger deductible.

Boat owners should also be sure they have no overlapping coverage, such as for “;sports equipment”; on both their homeowners and their boat insurance policies, BoatU.S. says.

Taking an approved boating safety class from an organization like the Coast Guard Auxiliary or the Power Squadron—or becoming members—can often reduce insurance rates, as can taking the BoatU.S. online safety class.

Taking out “;port risk”; policies can provide additional savings on boat insurance when boat owners put their vessels into storage for an extended period of time, BoatU.S. tells us. Those policies have no navigational coverage, but they will cover fire, theft and personal liability.

When boats are owned free and clear, BoatU.S. suggests their owners might consider a liability-only policy. However they would then be forced to accept the full cost for any damage to or loss of their vessels. But, it adds, such policies should include medical treatment coverage for family and friends, as well as coverage for uninsured boaters, salvage, and fuel spills.

With regard to fuel spills, BoatU.S. advises boaters to look at their policies' fine print. With an $800,000 fuel spill coverage, for instance, “;If your boat starts a marina fire that destroys other vessels, will there be enough money to cover the resulting spill as well as the loss of neighboring vessels?”; it asks.

As for salvage coverage, as numerous boaters in Hawaii find out every year, boat owners are held responsible for removing their sunken or grounded vessels, so that coverage is also recommended.

Finally, there is what BoatU.S. calls consequential damage coverage and like most insurance; it's about how much boaters care to gamble.

“;If your boat sinks because of a failed part,”; it asks, “;is the resulting water damage covered, or does your policy exclude 'any loss caused directly or indirectly, or resulting from' the failed part?”; If so, if the event occurs, you will be paying for it out of pocket.