Insurance Buying Tips

Boat insurance policies can vary widely from one company to the next, unlike home or auto insurance. Which type is best for you? Boat U.S., the nation's largest recreational boat owners association, has some tips for you.

Ask around:

One way to find a good insurer is to ask friends who have had a claim in the past. Insurance companies may be good at taking monthly premiums, but how a company lives ups to expectations when something goes wrong is a better indicator.

You can also research potential insurance carriers at AM Best The ratings are the industry's benchmark for assessing an insurer's financial strength; look for an "A" rating (excellent) or better. State insurance regulatory agencies are also a good reference and can be found online.

Homeowner's or separate policy for the boat?

Consider buying a separate insurance policy for the boat, rather than adding it to your homeowner's policy as the latter often limits certain marine-related risks such as salvage work, wreck removal, pollution or environmental damage. Whatever amount the boat is insured for, it should have a separate but equal amount of funds available for any salvage work. This means that you're compensated for the loss of your boat and not having to pay additional, out-of-pocket costs to have a wreck removed from a waterway.

Agreed Value vs. Actual Cash Value:

These are the two main choices that boater's face and depreciation is what sets them apart. An "agreed value" policy covers the boat at whatever value you and your insurer agree upon. While it typically costs more up front, there is no depreciation if there is a total loss of the boat (some partial losses may be depreciated). "Actual cash value" policies, on the other hand, cost less up front but factor in depreciation and only pay up to the actual cash value at the time the boat is declared a total or partial loss or property was lost.

Your needs first:

A good insurer will tailor your coverage to fit your needs so there will be no surprises. For example, bass boaters may need fishing gear and tournament coverage as well as "cruising extensions" if they trailer their boat far from home. You may want "freeze coverage" if you live in a temperate state because ironically, that's where most of this kind of damage occurs. "Hurricane haul-out" coverage helps foot the bill to move your boat to dry ground.

This is information is presented by Boat U.S., the nation's largest recreational boat owners association.

Insurance FAQ

What is the best coverage for my boat?

It is best to have what is known as an "All Risk" policy, which will provide coverage for all types of losses except those specifically excluded in the policy. Typical exclusions may include wear and tear, gradual deterioration, marring, denting, scratching, animal damage, manufacturer's defects, defects in design, and ice and freezing.

What are the differences between boat and yacht insurance?

Generally "boats" are considered to be 26' and smaller, and "yachts" are 27' and larger. Generally speaking yacht coverage is broader and more specialized because larger boats travel further and have more unique exposures.

View a list of CMTA Member Insurance Companies.