A Detailed Primer on Boat Insurance

Riding a boat may seem to be an extravagating activity but it comes with its own set of risks, especially if you are using it for commercial purposes. In 2021 alone, boating accidents in the U.S. resulted in 658 fatalities and more than 2600 emergency department visits, according to Statista. Therefore, if you drive a boat regularly, you should carry boat insurance to protect yourself from the financial losses associated with boating accidents. With that in mind, here’s a detailed primer on boat insurance.

Does Boat Insurance Cover Sinking?

There is no straight answer to this question. This is because insurance policies vary by insurance providers and the stipulated terms. For instance, one boat insurance policy may cover sinking while another may exclude it. So, it all boils down to the kind of policy you have. Even so, the standard boat insurance will protect you from financial losses that may result in case you cause injuries or losses to third parties during boating.

What Does Boat Insurance Cover?

Boat insurance generally pays for the financial losses from boat damage or injury. Coverages found in this policy include:

  • Liability coverage

    This coverage pays for liability costs such as treatment expenses for injured third parties and repairing or replacing a third party's property. For example, if you accidentally knock a swimmer with your boat, this coverage can pay for the treatment costs.

  • Hull insurance

    This policy pays for the losses incurred if you lose your boat to theft. Types of Boat Insurance Policies

Boat insurance comes in two flavors depending on the size of the compensation. These include:

  • Agreed value

    This policy pays an amount equal to the boat's market value at the time of the damage. For an old and worn-out boat, the agreed value is relatively small and may not do much.

  • Actual value

    This policy repays the total cost of replacing a damaged boat regardless of age or condition. This type of policy is preferable, considering it offers more compensation. However, the premiums for such a policy are usually high.

Boat Insurance Exclusions

Boat insurance also has exclusions, just like any other insurance policy. For instance, the insurance company will not pay for any damage that occurs on the boat as a result of war and terrorism. Also, there is a limited cruising distance that your standard policy can cover. If you cruise out of the allowed region, your boat insurance will not provide coverage in case of any damage to the boat. In such a case, you will need special coverage. In addition, boat insurance may not cover damage from tropical storms. Finally, some boat insurance policies only provide seasonal coverage, especially if the size of risk exposure varies across the season.

Get the Right Boat Insurance Policy with Amity Insurance Group

Some boat insurance policies cover sinking while others do not. Generally, for a claim to be successful, the cause of the sinking must be a covered peril. If you have questions or are looking for personalized boat insurance in McKinney, Texas, contact our team today. At Amity Insurance Group, we will assist you with all your insurance needs.