how watercraft insurance works
depending on the policy there may also be watercraft liability coverage for bodily injury to people other than the boat s owner and family guest passengers using the boat by themselves and medical payments for injury to the owner and their family some policies however require the purchase of additional liability coverage as an add on the specific type of insurance you buy is dictated by the size of your vessel watercraft insurance is similar to other types of insurance products in exchange for paying a series of insurance premiums the policyholder receives protection from certain rare but potentially costly risks depending on factors such as the size of the craft its age and its intended uses the premium costs may range from relatively inexpensive to pricey when underwriting a policy an insurance company will also consider the policyholder s track record of previous claims 1any vessel under 197 feet long is considered a boat while ships are 197 feet or longer the dividing line between boat and yacht is less settled some sources define a yacht as at least 30 feet long anything shorter is a pleasure boat 2 for insurance purposes the national boat owners association marks the dividing line at 27 feet 3small craft such as canoes rowboats small sailboats and powerboats with less than 25 miles per hour horsepower may be covered under a standard homeowners or renter s insurance policy however such coverage is unlikely to include liability insurance typical boat insurance covers theft physical damage to the boat itself due to a collision or striking a submerged object property damage to the boat caused by vandalism a windstorm or lightning and medical payments for injured passengers and the owner and their family for each coverage there will be different deductibles which is how much you must pay out of pocket before your insurance kicks in boat insurance will often provide better liability insurance than a homeowners policy but it is often wise to purchase additional liability coverage as an add on in the event of a total loss it is important to know whether your policy pays actual cash value acv or agreed value av acv is cheaper because it only pays for what the boat was worth at the time of the loss factoring in depreciation and wear and tear on the vessel av pays a price that you and your insurer agree upon in advance an amount that is likely to be closer to the amount you paid for the boat when new other considerations for boat insurance can include 1most yacht coverage is broader and more specialized than pleasure boat coverage because larger vessels travel farther and are exposed to greater risks it also generally costs more in part because yachts cost more in terms of a deductible it is usually determined as a percentage of the insured value with a 1 deductible a boat insured for 175 000 would have a 1 750 deductible most lenders allow a maximum deductible of 2 of the insured value 4generally yacht insurance coverage does not include wear and tear gradual deterioration marine life marring denting scratching animal damage osmosis blistering electrolysis manufacturer s defects defects in design and ice and freezing 5there are two main parts of a yacht insurance policy hull insurance and protection and indemnity p i the first is an all risk direct damage coverage that includes an av for hull coverage and in the case of a total loss it will be paid out in full replacement cost coverage on partial losses is also available however sails canvas batteries outboards and sometimes outdrives are usually subject to depreciation instead 6p i insurance is the broadest of all liability coverages and because maritime law is particular you will need coverages that are designed for those exposures longshore and harbor workers coverage and jones act coverage for the yacht s crew are included and are important because your losses in these areas could run into six figures p i will cover any judgments against you and also pay for your defense in admiralty courts 6personal watercraft insurance is for recreational vehicles such as jet skis sea doos and yamaha wave runners these surface skimming craft can have engines with horsepower anywhere from 60 mph to 310 mph they usually are not covered by homeowners insurance and even when they are the coverage limits are low personal watercraft insurance covers the owner and anyone they allow to use the craft for risks such as deductibles and liability limits will vary depending upon the policy and the company offering it you can buy additional coverage for trailers and accessories and if you own more than one craft you may be able to bundle your insurance policies for a discount these pleasure vehicles are easy to use but can also be dangerous causing thousands of injuries every year which makes personal watercraft insurance a wise investment watercraft insurance policies may limit the geographic areas in which the boat or watercraft can be operated while maintaining coverage these often include inland waterways rivers and lakes as well as ocean waters within a certain number of miles from shore 1 