Before you go out and purchase that new boat you have been dreaming about all winter, consider the importance of also purchasing the proper watercraft coverage that you will need for your new toy.
Many people mistakenly believe that their boat will be covered under either their personal auto policy (PAP) or homeowner’s policy. Auto policies do not provide liability coverage or coverage for damage on boats. Homeowner’s policies may cover only boats that have low value or are low-powered. So before going out and purchasing a boat, contact us to discuss the proper watercraft coverage that you will need.
Here are some considerations to make when it comes to figuring out if you will need separate watercraft coverage for your boat. These types of boats will require a separate insurance policy:
- Any boat valued over $1,500
- A sailboat that is over 26 feet long
- Powerboats that have motors exceeding 25 horsepower
Insurance companies will often deny coverage for particular types of watercraft. These types of watercraft may be denied coverage:
- Watercraft such as jet skis or wave runners, due to the high number of accidents with them.
- Houseboats, homemade or kit boats, competition bass boats and speedboats.
- Boats that are over 15 to 20 years of age due to a higher loss frequency (Note: It is also wise to order a marine survey or inspection of an older boat before purchasing, which can point out deficiencies in the boat that could cause you to reconsider the purchase or renegotiate the price).
Finally, when it comes to purchasing the proper watercraft coverage needed for your new boat, also consider purchasing a personal umbrella policy. This policy would be in addition to a watercraft policy and is especially beneficial if you are going to purchase a speedboat, one designed for skiing or any other type of craft that has a higher potential for loss of life or damage. Umbrella policies are relatively inexpensive and will provide additional coverage above the liability coverage found in a watercraft policy.
If you purchase a personal umbrella policy, use the same insurance company that provides your homeowner’s policy or personal auto policy.