Boat and watercraft owners everywhere know the importance of buying insurance. Just like your house or automobile; a boat is a big investment. Boats can be damaged by flood, accident, fire and acts of nature. Boats and watercrafts are high risk in some areas for theft. What does a boat owner need to know about boat insurance?

1. Know your insurer 

Many boat owners make the mistake of just adding their boat to their homeowner’s insurance policy. However if the time ever comes when a claim must be filed; they sometimes find the coverage is lacking. Speak with other boat owners about their coverage and insurance providers. Research the coverage and compare companies. You want an insurance company that knows as much about boats as they do homes.

2. Know the policy

There are two types of boat insurance coverage. They are Agreed Value coverage and Actual Cash Value coverage. Agreed Value coverage is more expensive. In the event of total loss of your boat, you get the exact sum you agreed upon when you bought the policy. If you have a policy with an agreed value of $50,000.00; you get $50,000.00. There is no depreciation. Further, most agreed valued policies cover “item for item” coverage in the event of theft or damage. For example, if your boat is equipped with a GPS system and it is stolen; they pay you what it cost to install a new GPS system in your boat.

Actual Cash Value is cheaper and pays less. You may have a $50,000.00 policy but if you boat is destroyed you will receive the amount you could sell that boat for in its current condition (which is used). They may depreciate the value of the boat to $30,000.00 (for example). If your GPS is stolen, they place the value of a used GPS “X” years old. The premiums are cheaper but the recovery is less.

3. Hurricane Deductible?

In some areas, insurance companies may add a stipulation to your policy which changes your deductible if your boat is damaged or lost in a hurricane. Your policy may have a $500.00 deductible; but read the fine print. That deductible may double or more if you have this stipulation and the damage is hurricane related.

4. Learn the procedures for filing a claim.

The time to find out how and where to file a claim with an insurance company is before you need to. Inquire about the process and the waiting time before you are locked in to a contract.

There are many options available for boat or watercraft insurance and companies want your business. If you are fine with a lesser policy because it is cheaper, that is your choice. However, ask for more. Many times an agent can customize a policy that fits your needs.