How you insure your boat depends on how big the boat is, what you do with it, and where you live. Boat insurance generally is more complex than home or car insurance due to the specialized coverage required by marine-related risks. We are licensed in both North Carolina and Florida, so if you live in one state and vacation in the other, or have boats in both states, we are equipped to give you the very best service.

What Kind Of Boat Are You Insuring?

The first question is how big is your boat? Generally boats are considered to be 26' and smaller, while yachts are 27' and larger. Here I will discuss smaller boats; my next article will cover yacht insurance in depth.

Next question: How do you use your boat? Do you stick to boating in lakes and streams or cruise coastal waters? Do you usually go by yourself or take a crowd with you? Do you mostly fish or mostly party? And how do you store your boat when it’s not in use? Do you trailer it and dry-store it, or leave it in the water?

Unless you are just insuring a canoe or rowboat, steer clear of no-frills boat policies that some insurance agents add to your existing auto or homeowner’s policy. The policy may be cheaper, but you probably will regret it if you ever have to make a claim.

Which Type Of Coverage Should I Get?

Boat insurance includes two broad categories of coverage:

• Liability Coverage – Covers costs owed to third parties (people besides you or your immediate family) for injury, loss of life, or property damage. It also covers legal costs arising from defending an accident-related lawsuit.

• Physical Damage Coverage – Covers costs of damage to the boat itself and its equipment. Some polices may limit certain payments, such as for damages related to weather or vandalism.

The physical damage coverage comes in two flavors:

• Agreed Value – (Also called Stated Value.) Pays the limit stated on the policy when the boat is deemed to be a total loss. These policies offer more protection and therefore cost more. Some lenders may require you to carry this coverage, so check with them.

• Actual Cash Value -- Pays the current market (depreciated) value of the boat when the boat is deemed to be a total loss.

Besides the settlement amount (when the boat is a total loss), it is best to carry an ‘All Risk’ policy (when the boat is damaged but not totaled). All Risk policies cover losses except those specifically excluded, such as normal wear and tear, surface scratching, manufacturer's defects, and ice and freezing.

As with auto insurance, boat insurance includes standard coverages and deductibles. The following are common:

• Medical payments -- no deductible, $1,000 limit

• Personal effects -- $250 deductible, $500 limit

• Uninsured boaters liability -- no deductible, $10,000 to $300,000 limit

• Towing and assistance -- no deductible, $500 limit

• Fishing equipment -- $250 deductible, $1,000 limit

Suppose you do not use your boat during part of the year and have it in dry storage when it’s not in use. You may qualify for a ‘lay-up’ discount. This gives you year-round coverage with a discount for the months your boat is unused.