What you should know about boat insurance

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My friend had just returned from a Kayak trip and was all agog about the things he had done on the trip. He had bought his kayak only recently at a great price with all the best features and was happy that he could use it so soon. He had called me specifically to enquire about the right insurance cover he could get for the kayak. He had been worried quite a few times during the trip about not having got the insurance for it. Insuring a boat you own is best done separately rather than as part of your homeowner’s policy.

Most often homeowner policies are restricted and cover risks related to specific marine related conditions like wreck removal, salvage work, environmental damage, etc. But you have certain exceptions. Most polices cover the smaller boats as well as motors that have a horsepower limit of up to 100. Though the cover provided by riders may be sufficient in such cases, you need to ask about the damages to your boat and the terms of payment.

Further, almost all homeowners’ riders apply for use in inland rivers, lakes and other waterways. The coverage does not extend to the beach or a coastal inlet. If you want to use your boat in such areas, you need to have a more comprehensive insurance.

Finding the right insurance

An insurer will consider offering a policy for your boat only when it meets certain criteria. Although any vessel will be insured for a specific sum, you should consider certain factors before you buy one that suits you. The age of the boat, its length, value, horsepower or speed are some of the main factors. The construction standards of the boat, and whether it conforms to the state regulation standards, should also be noted. The type of the boat is also a deciding factor as there are several types including utility, cruiser, inboard, fishing boat in saltwater, performance boat etc.  Boats without motor, like kayaks (check out here what I am talking about), homemade boats also determine the insurance provided. The location where it operates and ownership also figure in the assessment.

Boat insurance types

Boat insurance is of two main types, namely, actual cash and agreed value. The deprecation present is the main differing factor between the two. The agreed value insurance policy covers based on the value of the boat, when the policy was bought. The depreciation is not accounted for in case of total loss of the vessel, although the upfront cost of this policy is more.

The actual cash type of policy is cheaper in comparison initially, but includes depreciation. It will take into account the value of the boat at the time of loss only. When your boat is aged, the actual value policy will be insisted by the insurer and it saves you more money mostly.

Whether it is a kayak or a bigger type of boat you own, having a proper insurance cover is always necessary and in most cases is beneficial to you. Some of the typical exclusions you should know about include marring, wear and tear, animal damage, denting, ice and freezing, design defects and manufacturer defects. In such cases, you may need additional cover.