May 2007

The Boat Insurance Maze: Important Buying Tips

Unlike home or auto insurance, boat insurance policies can vary widely from one company to the next. Which type is best for you? BoatUS, the nation's largest recreational boat-owners association, has some tips for you.

Ask Around

How an insurance company handles a claim and lives up to expectations is a great indicator of the policy's real value, so ask your friends about their insurance claim experience. Was the company prompt? Did they keep the policyholder informed? How helpful were they in processing the claim?

You can also research potential insurance carriers at The ratings are the industry's benchmark for assessing 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.

Homeowner's Or Separate Policy For The Boat?

Consider buying a separate insurance policy for the boat, rather than adding it to your homeowner's policy as the latter often limits certain marine-related risks such as salvage work, wreck removal, pollution or environmental damage.

Whatever amount the boat is insured for, it should have a separate but equal amount of funds available for any salvage work. This means that you're compensated for the loss of your boat and not having to pay additional, out-of-pocket costs to have a wreck removed from a waterway.

Agreed Value Versus Actual Cash Value

These are the two main choices that boaters face, and depreciation is what sets them apart. While it typically costs more up front, an "agreed-value" policy covers the boat at whatever value you and your insurer agree upon — there is no depreciation if there is a total loss of the boat (some partial losses may be depreciated).

"Actual cash value" policies, on the other hand, cost less up front but factor in depreciation and only pay up to the actual cash value at the time the boat is declared a total or partial loss or property was lost.

Boaters Are Different

A good insurer will tailor your coverage to fit your needs so there will be no surprises. For example, bass boaters may need fishing gear and tournament coverage as well as policies that allow them to easily trailer their boat far from home.

You may want "freeze coverage" if you live in a temperate state because ironically, that's where most of this kind of damage occurs. "Hurricane haul-out" coverage helps foot the bill to move your boat to dry ground when a storm approaches.

And, if some boaters are only concerned about potential injuries or property damage — or they just need to meet the requirements of their marina's slip contract — a liability (only) policy may be just the ticket.

For more information, visit or call 1 (800) 283-2883.