Just as your car insurance rates can vary based on the type of car you have, so can your boat insurance rates. Insurance companies look at the type of boat you’ve purchased, the value, and the horsepower of the engine. They also consider how and where the boat is stored.
Boat insurance works similarly to auto insurance. You will have coverage for 3rd party bodily injury and property damage (damage to others) as well as coverage for physical damage to your boat. Just as with auto and home insurance, general wear and tear is not covered.
What Can I Do to Decrease My Insurance Costs?
Start by reevaluating the value of your boat each year. Boats age and the market is competitive. Many policies base your premiums on either actual cash value (the actual value of the boat on the day it is damaged) or an agreed value (a negotiated amount that is often worth more); the latter being more common with luxury vessels or yachts. As your boat ages and the value decreases, so should the value you are insuring it for. Once your boat reaches a certain age, you may even consider carrying liability coverage only.
Consider how often you use your boat and adjust accordingly. If you live in Florida, you may use your boat all year. If you live in NJ, you’re probably running it from Spring through early Fall and then storing it for the winter. Some companies will either modify your coverage or allow you to switch to a port risk policy – one that drops the liability but still insures you for damage or theft while in storage. Consider what type of coverage you really need for the off-season.
Review your deductibles and your financial abilities and obligations. Is a small accident something you would be able to pay out of pocket? Perhaps you should raise your deductible to $500 or $1,000 and pay anything beneath that on your own.
Take a safe boating course. Many insurance companies will give you a small discount after you provide proof of successful completion; a discount similar to safe driving discounts.
If you’re financially able, many insurance companies give you an additional discount for paying your premium in-full at the beginning of the year. Many offer as much as 10%, so it’s something to consider.
Most importantly, talk to your insurance agent about your current boat policy and make sure you are comparing all of your options carefully. Liability coverage, medical coverage, salvage and wreck removal, fuel spills, and uninsured boaters coverage are all standard, but these may be treated differently by each company.