Boaters can insure their boats by declaring it on their homeowner’s policy. This could be a good idea or not!
Your boat will be covered under the umbrella coverage of your homeowner’s insurance. This provides you with the safety and security of a large-liability policy that is normally associated with homeowner’s policies. You get a certain amount of ‘Cross Risk Insurance’. Because the boat’s risks are different from other homeowner’s risks, the chances of multiple claims occurring simultaneously is very low. It may be worth having a separate policy for boat owners if you have very valuable assets to protect.
The majority of homeowner’s insurance policies do not cover marine-related issues, values or considerations. For example, their claims adjusters are often unaware of the intricate details involved in repairing or replacing a boat that has been damaged or lost. They don’t understand the damage that can be caused by the sinking recreational boats. Submersion can cause serious electrical and mechanical problems. Many of these problems won’t be apparent until the boat is dried out, cleaned up, and returned to service. Short circuits can be caused by corrosion of electrical contacts, which can also exacerbate electrolysis problems in the boat. These contacts are subtle and difficult to understand by those without marine experience or background. Marine insurance adjusters, on the contrary, are familiar with the issues and values of boating and have a lot to do with it. Marine appraisers are often used by marine insurance companies to adjust claims. They are true professionals, dedicated to the marine industry, and they serve boat owners well.
As a marina operator, I have seen many instances when a customer’s boat was damaged or lost due to collision, carelessness, or nature. Number one was forgetting to plug the boat in before launch. Sometimes customers would leave their boat unprotected on a dock. If enough rain fell, the bilge pump would drain the battery and then the boat would fill up and sink. The damage would be assessed by the P & C adjuster. They would not see any water damage to upholstery. They would also value any cosmetic items that had been damaged or lost. We were unable to convince them about the hidden fuel system and electrical damage. There were often bitter disputes between the boat owner, the insurance company, and months of waiting before the final result.
In contrast, when an adjuster from a maritime insurer came to assess the damage they would first assess the systemic electrical or mechanical issues. They would often give us the authority to do the extensive electrical system diagnostics, evaluate the hull, and replace any mechanical items (all fluids and filters, etc.). We didn’t know of any dispute between the boatowners and the marine insurance.
The insurance of your boat when it is not in use is another issue that is often overlooked. Many people assume that their boat will be covered by the marina’s insurance. This is only partially true. Their liability insurance would cover you if the marina operator dropped your boat or caused damage due to negligence. However, if the marina operator were to drop your boat or cause damage while it was stored, their liability insurance would cover this. Many boatowners lost their boats in Hurricane Katrina’s destruction of the Gulf of Mexico were shocked to discover that their marina’s insurance didn’t cover them. Many of these boats were total uninsured losses.
Many marine insurance companies offer discounts for prolonged storage, as opposed to the assumption that the boat is used all year. A boat may only be used during summer months for five to six months, then it is kept in storage at a marina for the rest of the year. Check with your marine insurance to determine if they have a notification system that allows you to report the boat as in storage and receive a reduction on your liability rate or premium.
Before you sign up, make sure you compare the coverage and cost of boat insurance offered to marine insurers with your homeowner’s policy. Ask about the qualifications of marine adjusters employed by the carrier. If you have a claim, this will be crucial.
