Insurance on a boat can be expensive. The cost depends on a lot of factors, some of which are as follows: Type of boat (i.e. sail or power), size of boat, owner experience and education (i.e. Coast Guard Aux. course or Power Squadron course), past history of claims, age of boat, location of boat (bad weather areas) , safety equipment and/or electronics, (i.e. EPIRB, radar, etc.). There are other factors as well. When you are shopping for insurance ask the agent what things might entitle you to a discount or save you some money.
The type of insurance you buy and the amount of coverage are major price determinants. For small boats most policies just cover physical damage to your boat and liability for damage to someone else’s property or for personal injury to someone else. Larger vessels usually have “yacht insurance”, referred to as hull coverage and protection and indemnity coverage. The hull coverage covers the vessel and its equipment and the indemnity coverage pays for damage or injury to someone else. Most yacht policies are “all risk”, meaning they cover all external causes of loss except those that are specifically listed in the policy as exclusions. For example, damage caused by “named storms” (hurricanes, typhoons, tropical storms) may be listed as an exclusion. Some policies only cover “named perils”. This only covers losses from specific causes listed in the policy.
In the event of a total loss a policy may specify payment of “actual cash value” or an “agreed value”. Larger vessels are usually covered for the agreed value. This presents an opportunity to save some money by being realistic about the value of your boat. You will pay more for higher value amounts. You should try to set the agreed value at an amount that really represents the total value of your vessel and its equipment. If you have a recent survey you can use the valuation estimate from the survey as a guide..
When you change insurance companies or buy insurance for a newly acquired vessel you will be asked if there is a recent survey. The insurance company will want to know the condition of the boat before issuing insurance. We recently changed insurers and were permitted to supply a 4 year old survey. However, our sailboat was built in 2001 so it is recent vintage. Older boats may require more frequent surveys. Some boats (20 – 30 years old) may be difficult (or expensive) to insure at all. You should consider this factor when considering a purchase. If there are specific defects or deficiencies mentioned in the survey, be sure to have them fixed before applying for insurance.
Before you have a survey done be sure to clean up your boat, make sure everything works, and make sure the surveyor has easy access to all areas on your boat. You will also need to schedule a haul out (“haul and hang”) so the surveyor can check the hull, rudder, propeller(s), shafts, thru-hulls, etc.). Don’t try to conceal defects. If you know something is broken fix it before the survey. Be present when the survey is done and be prepared to answer questions.
If you belong to a boating association or group (such as BOAT US or a yacht club) find out if you can get insurance through the association or qualify for a discount as a member of the group. Ask a member of your group for a recommendation for a good insurance agency or for information about experiences with specific insurers. Talk to other boat owners you know about their insurance. You may get some good cost saving suggestions. To learn more about membership in BOAT US and insurance visit the BOAT US website.
When you are ready to apply for insurance contact several agencies and ask which insurance companies they represent. Initial contacts can be made on-line and you can even request quotes on-line. This is a quick and easy way to get some idea how much you will be spending. It’s also a good way to determine if you can save money by switching companies. Be sure to start this process early. Don’t wait until you have purchased a boat on until your existing policy is about to expire before you begin shopping. You should give yourself at least 30 days (or more) leeway.
Before you make a choice ask specific questions about policy provisions. For example, does a policy provide automatic coverage if you are operating someone else’s boat? What is the automatic coverage time if you buy a new boat for yourself? Will you have coverage for salvage costs incurred as a result of an accident in addition to your coverage limit? Are items such as cell phones, computers and sporting equipment covered? Do you (as the owner) have to be on-board anytime your boat is being operated? What are the geographical coverage limits? Is the Captain and Crew covered for liability while operating the vessel?
The best advice for saving some money on insurance is to take some time to do it right.