Unlike home or auto insurance, boat insurance policies can vary greatly from company to company. So what type of boating insurance is best for you? Try these tips. They come from experts from the largest national association of pleasure boat owners, BoatU.S.
• Know your insurer: One way to find a good insurer is to ask friends who have had a claim in the past. Insurance companies can be good at taking monthly premiums, but how a company lives up to expectations when something goes wrong is a better indicator.
You can also search for potential insurance companies at www.am best.com/ratings. Ratings are the industry benchmark for evaluating an insurer’s financial strength; look for a grade of “A” (excellent) or better. State insurance regulatory agencies are also a good reference and can be found online.
• Owner’s or separate insurance policy: Consider purchasing a separate insurance policy for the boat rather than adding it to the owner’s policy, as the latter often limits some sea-related risks, such as salvage work, removal of shipwrecks, pollution or environmental damage. Whatever the amount the boat is insured for, you should have a separate but equal amount of funds available for any salvage work. This means that you are compensated for the loss of your ship and do not have to pay additional costs to remove a wreck from a canal.
• Agreed value vs. Actual Cash Value – These are the top two options boaters face and depreciation is what sets them apart. An “agreed value” policy covers the boat at any value agreed between you and your insurer. While it generally costs more up front, there is no depreciation in the event of a total loss of the boat (some partial losses can be written off). “Actual cash value” policies, on the other hand, cost less up front, but take depreciation into account and only pay up to actual cash value at the time the ship is reported as a total or partial loss or property has been lost.
• Customize-Bass boaters may need tournament cover and fishing gear, as well as “cruise extensions” if they are towing their boat away from home. You may want a “frost cover” if you live in a temperate state because ironically this is where most of this type of damage occurs. A good insurer will tailor your coverage to your needs, so there will be no surprises.