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A Few Useful Tips When Shopping for Boat Insurance

Boat insurance

For most people, there is nothing more exciting in life than owning a boat. It’s an investment and a hobby all at once, and you get to take it out on beautiful waters whenever you please.

That said, boats can sometimes come with a hefty price tag attached. And if something happens to your boat while you are out on the water or when it’s docked at home, then the cost of repair could very well surpass what you paid for your boat in the first place. That’s why having good boat insurance is essential.

Not all boat insurance policies are created equal, however, and it’s important to do your research before you commit to one. To help you make an informed decision, here are a few important tips to keep in mind when shopping for the right policy:

Know the Difference Between Actual Cash Value and Replacement Cost Coverage

The first thing you need to understand is the difference between actual cash value (ACV) and replacement cost coverage (RCC). ACV policies will reimburse you for the current market value of your boat, minus any depreciation that has occurred since you purchased it. So, if you paid $20,000 for your boat and it’s now only worth $10,000, then an ACV policy would only pay out $10,000 in the event of a covered loss.

An RCC policy, on the other hand, would reimburse you for the full cost of replacing your boat with a brand new one—regardless of how much your boat has depreciated. So, if you have an RCC policy and you need to replace your boat that is five years old, you would receive enough money to buy a brand new one, rather than being stuck with the ACV of $10,000. The downside to RCC policies is that they tend to be more expensive than ACV policies.

Make Sure you Are Adequately Covered for Liability

Liability coverage is important for two reasons: first, it will protect you if you are sued for damages caused by your boat; and second, it will cover the cost of any medical bills incurred by someone who is injured while on your boat. As explained by the boat insurance pros from Ahoy insurance, the amount of liability coverage you need will depend on the value of your boat and the risks associated with operating it. A good rule of thumb is to purchase a policy with at least $100,000 in coverage, but you may need more depending on your circumstances.

In case you are planning to use your boat for business purposes, then you will need to purchase a separate policy that specifically covers commercial activities. If you are not sure whether or not your policy covers business use, be sure to ask your agent about the details. Business use is one of the most common exclusions in boat policies. Therefore, you will want to make sure that you are adequately covered before setting sail.

Consider Added Coverage for Equipment and Accessories

Your boat insurance policy should cover more than just the hull of your vessel. It should also cover any equipment or accessories that are permanently affixed to the boat, such as motors, anchors, and moorings. In addition, most policies will also cover personal belongings that are onboard your boat at the time of a covered loss, such as fishing gear, life jackets, and navigational equipment.

However, some items may not be covered by your policy, such as dinghies, tenders, or outboard motors. If you have any of these items onboard your boat, you will need to purchase separate insurance for them. You should also keep in mind that some insurers will place limits on the amount they will pay for certain items, such as electronics. Therefore, it’s important to check with your agent to see what is and is not covered under your policy.

Pay Attention to Policy Exclusions

All boat insurance policies come with exclusions, which are events or circumstances that are not covered by the policy. The most common exclusion is damage caused by normal wear and tear. This means that if your boat is damaged due to age or poor maintenance, your policy will not pay for the repairs. Other common exclusions include damage caused by an act of war or terrorism, damage caused by nuclear radiation or radioactive contamination as well as pollution or hazardous materials. These are just a few of the most common exclusions, so be sure to read your policy carefully and consult your agent about any exclusions that may apply to your policy so you can make an informed decision about whether or not the coverage is adequate for your needs.

Choose a Reputable Insurer

When shopping for boat insurance, it’s important to choose a company that is reputable and has a good track record of paying claims. You can check with the Better Business Bureau or your state’s department of insurance to see if there have been any complaints filed against the company you are considering. You should also make sure that the company you choose is licensed to do business in your state.

If you know anyone who has a boat, ask them who they use for insurance and if they are happy with the coverage and service they have received. Once you have narrowed down your choices, get quotes from each company and compare the coverages. This will help ensure that you are getting the best possible price on your policy. In addition, be sure to ask each insurer about any discounts that may be available. Some discounts are offered for things like taking a boating safety course or installing certain safety devices on your boat.

Review Your Policy Annually

It’s important to review your boat insurance policy on an annual basis to make sure that it still meets your needs. If you have made any changes to your boats, such as adding new equipment or accessories, you will need to make sure that these items are properly covered under your policy. In addition, if you have moved to a new location, such as a different state or marina, you will need to notify your insurer so they can update your policy accordingly.

Finally, be sure to shop around and compare rates every year to make sure you are still getting the best possible price on your coverage. Rates can fluctuate from year to year, so it’s important to stay on top of things and make sure you are getting the best deal every time.

As you can see, having a good insurance policy for your boat is equally important as making sure you have the right safety gear on board. By following these tips, you can be sure that you are getting the best possible boat insurance coverage for your needs. If you have any further questions, be sure to consult with a licensed insurance agent or broker who specializes in boating insurance.

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