The following is an article by Eric Baillargeon, GEICO Insurance Agency boat program manager:
How much time have you spent getting your boat ready for a safe boating season? From regular maintenance check-ups to safety inspections, it's important to make sure your boat meets safety standards necessary for an enjoyable experience out on the water.
Owning a boat is an investment that comes with an abundance of rewards. As with any investment, there are precautionary measures for protecting your boat. Last year alone, the U.S. Coast Guard reported more than 4,900 accidents, resulting in millions of dollars in property damage, loss of life and personal injury suits. With 12 million registered boaters in the U.S., and even more on the nation's waterways, the potential for an accident is always a present reminder of the risks involved.
Are You Fully Protected?
The question that most boat owners need to ask is, "Am I fully protected?" Boat insurance is one of the most important precursors to boating, but most often overlooked. Because boat insurance doesn't come in a one-size-fits-all package, it can be confusing. Boat owners should take the time to fully understand what's below the surface of their policies and coverages.
Types of Coverages
There are three main types of boat insurance coverage: bodily injury liability, property damage liability and physical damage. There are also several additional coverage options, including medical payments and towing. Insurance coverage will depend on a number of factors such as the cost, type and size of your boat or personal watercraft, the type of activity you will be participating in, and the waterways you will be navigating.
As a boat owner, you can be held liable for personal injuries to guests or damage caused in an accident on your vessel. You can also be held liable for personal injuries, loss of life, or damage to any other vessels or property involved. One of the essential boat insurance coverages is personal liability, which covers the injuries of others. If a passenger is injured, personal liability will typically pay for the medical bills for that passenger. Another benefit is if someone without insurance causes injury to you, the uninsured boater portion of your coverage would generally pay out.
Boat insurance also covers various types of property damage, including damage caused by hitting another boat or a boat dock. For example, if you strike another boat and cause damage, your insurance would generally pay the owner of the boat you damaged.
Agreed Value vs. Actual Cash Value Policies
Boat insurance policies offer physical damage coverage on an agreed value or an actual cash value policy. The primary difference is how the claims are settled following a loss. With an agreed value policy, the value (agreed upon by the boat owner and the insurer) of the boat without depreciation is the amount paid out following a total loss.
Agreed value policies allow boat owners to insure their vessels up to the full value if a total loss occurs. The value is set at that amount instead of factoring in depreciation. With a brand new boat, new boat replacement coverage allows for a new boat (of similar quality) in the event of a total loss.
With an actual cash value policy, depreciation is applied to the replacement cost of the boat at the time of the loss. The amount paid out is determined by boat pricing guides and the current market value of the boat.
Boat theft and vandalism isn't just a threat during boating season. Personal watercrafts such as jet-ski's, canoes and kayaks are susceptible to theft because of their small size. Larger boats, especially those with sophisticated and expensive navigation and electronic equipment are more attractive to thieves. Your insurance policy should include theft insurance when it is available.
For many boat owners, storing a boat on a trailer in a driveway is ideal. Another alternative for smaller boats is a rack storage facility which keeps your boat in a covered shed. But storing a boat also brings on added risks. Transporting your boat to and from the water increases the risk for an accident. Boat insurance policies should include damage to your boat for your most common transport mishaps.
Parking at a marina is a safer boat-storage option. For owners of large and small boats, a marina slip is convenient and also provides amenities such as fuel, security and sense of community. Most marinas require boat owners to have insurance and will share some of the liability of financial losses stemming from hazards that occur at the marina such as fire, theft, accident or natural disaster. No matter where you choose to store your boat, most insurance policies will cover you.
In recent years, towing has become an essential part of boat insurance coverage. The Coast Guard no longer offers towing assistance for non-life threatening accidents. If you have emergency service and towing coverage in your policy, generally you will have access to fuel delivery, as well as towing to the nearest dock where repairs can be made. The cost of commercial towing can be very expensive depending upon the distance from where the tow gets under way to your destination port. Check your policy to ensure emergency services and towing are covered.
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