Enjoy a Relaxing Day on the Water with the Right Boat Insurance

If the sun is shining and the mercury is climbing, chances are you’re ready to take your boat out for some quality time on the water with family or friends.

The National Marine Manufacturer’s Association estimates that 35.7% of U.S. adults participated in recreational boating at least once in 2014, with total recreational marine spending reaching $35.9 billion in 2015.

Americans spent $17.4 billion on new boats, marine engines and marine accessories in 2015, and there were 11.9 million registered boats in the U.S. during the same year.¹

While boating is one of the most popular ways to spend a weekend or vacation on the water, it’s also important to be ready for the unexpected. Along with  good life jackets to protect you and your passengers or a quality boat cover to protect your vessel from the elements, do you also have the right boat insurance in case your adventure doesn’t go as planned?

Why do I need boat insurance? Is boat insurance required?

If you’re asking yourself these questions, consider the following possibilities:

• What if your boat is involved in a collision with another watercraft?
• What if you or someone else suffers an injury?
• Or what if your boat sustains damage from a storm?

Although boat insurance is not necessarily required by law in the state of Missouri (laws will vary by state), here are a few important reasons why you need to consider purchasing boat insurance to protect yourself from these and other hazards:

• Home and auto aren’t enough. Except in the case of very small boats, your homeowner’s insurance will not protect you in case of a boating mishap. Some insurers will allow you to bundle home, auto and boat insurance, but your boat still needs its own separate policy.²
• Want a boat loan? You must have boat insurance. Lenders require proof of insurance before you can get approval for a loan when purchasing a boat.³
• Most marinas require insurance. Want to sign up for a slip or mooring at a nearby marina? Have your proof of insurance ready. Some will also want to be listed as an additional insured on the policy.³

How much is boat insurance?

There are many factors that will affect the cost of boat insurance and the type of coverage you choose. Let’s take a look at some of the things you’ll want to keep in mind when comparing different policies and boat insurance quotes:

• The type of boat you have. There are many different types of boats and each one has its own unique insurance needs. At The Resource Center, we help clients insure their bass boats, cruisers, fishing boats, pontoons, runabouts, sailboats, catamarans, utility boats, yachts and more. We can help you get coverage for many popular brand names including Cobalt, Sea Ray, Chaparral, Cruisers, Monterey, Regal, Crownline and Formula.
• The characteristics of your boat. Are you buying a brand new or pre-owned model? Insurers will also consider the length, speed, horsepower, and overall condition of your watercraft.⁴
• Safety measures. Does your boat include safety features to reduce your risk of an accident? Do you have life jackets and other devices on board to reduce the risk of injuries or fatalities? Have you enrolled in a boating safety class? Not only can these safety measures save lives, they can also help you take advantage of relevant discounts and the lowest insurance rates.²
• Lay-up period. Do you stop using your boat during the fall and winter? You may be able to save money by suspending coverage during months when you aren’t using your boat.²
• Geographic usage. Do you plan to go water skiing at a nearby lake? Take a trip down a river? Or go deep-sea fishing? Most policies only cover your boat for use in designated geographic areas — such as inland waters of the United States and Canada, or in coastal waters. So, think about where you plan to use your boat when considering insurance policies.²
• What happens when you’re out of the water? Your boat policy will not cover loss of life, bodily injury, or property damage that occur while the boat is being transported on land. Your auto policy may provide limited protection while the boat is being towed, and your homeowner’s policy may provide some coverage if the boat is damaged while you’re storing it on your property. Consider an umbrella policy to cover perils that may affect your boat while it is on land.²

Selecting a boat insurance policy

When purchasing insurance for a boat, your options include liability coverage as well as a choice between an actual cash value or an agreed amount value policy.

• Liability coverage. Whether you own a small rowboat or a luxury yacht, there is always the risk of a collision with another watercraft or an injury caused because of your boat. That’s why we recommend purchasing separate property and liability coverage. Liability limits typically start at $100,000 and may be as high as $1 million or more.
• Actual cash value vs. agreed amount value. An actual cash value policy uses the market value of your boat to determine how much you receive in the event of a loss. Boat pricing guides and other resources are consulted to determine the value of a total loss, while the total cost of repairs minus depreciation determines the amount paid for a partial loss.
• With agreed amount value policies, you and your insurer agree on the value of your vessel at the time you insure your boat. If you suffer a total loss, you are paid exactly that predetermined amount. In the event of a partial loss, you are compensated for the replacement of old items without deduction or depreciation.

Before you head out to the lake, river, or ocean this summer, make sure you have the correct boat insurance policy. Your time on the water will be that much more fun and relaxing when you know you’ve got the protection you need.

From Progressive boat insurance to Travelers, there will be a policy to fit your unique needs. Not sure which policy is right for you? Contact The Resource Center. We’ll answer all of your questions and help you select the best insurance coverage for your boat.

Sources:

1 – Grow Boating. (2017). Facts and Figures. Accessed from https://www.growboating.org/toolkit/facts-and-figures.aspx.

2 – MacDonald, Jay. (2011). 6 things to know about boat insurance. Bankrate. Accessed from http://www.bankrate.com/finance/insurance/6-things-know-boat-insurance-1.aspx.

3 – Boat US. (2017). Do I need boat insurance? Accessed from http://www.boatus.com/newtoboating/do-i-need-boat-insurance.asp.

4 – Discover Boating. (2017). Insuring your boat. Accessed from http://www.discoverboating.com/buying/insurance.aspx.

We are not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation. We are able to provide you with information but not guidance or advice related to federal benefits. Our firm is not affiliated with the U.S. government or any governmental agency. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and The Resource Center are not affiliated companies. AW12175556