Just like a car or house, a boat is an entirely insurable asset. Some of the concepts surrounding boat insurance can be a little confusing. However, you can use this list to handle some of the basics of setting up boat insurance coverage.
Declaring the Boat's Usage
This isn't all that dissimilar to the need to declare whether you need commercial or personal coverage on a car. However, there are many more possible uses for a boat. Also, boats often have insurable contents, and the insurer will want to know how those relate to their usage.
Suppose you have a sport fishing boat for personal use. People often make major investments in fishing equipment, such as sonar systems, rods, reels, and other pieces. A person in this situation would probably want to have boat insurance coverage that includes those potentially expensive items.
As with vehicles and buildings, commercial versus personal usage matters. Someone with a commercial fishing vessel at sea, for example, takes on greater risk than a personal user only going out on a lake a couple of times a month.
Agreed Value
One notable deviation between car and boat insurance is the use of agreed value. The car market has enough liquidity that insurers usually have an excellent idea of what the current value of an automobile is. Boats aren't as common, and they don't sell as often. Consequently, insurers are more comfortable agreeing with customers on the insurable value of a boat.
Bear in mind, though, that this means you'll be paying a premium on a potentially depreciating asset. The trade-off is you'll get the full agreed value if you need to replace the boat after an accident.
Suspension Options
Boating is seasonal in nature in most parts of the country. Companies in the insurance business are aware of this, and they tend to be comfortable offering suspension options. These are periods where you don't have to pay a premium, but the company won't offer coverage, either.
Suppose you keep a boat at a summer house in northern Minnesota. It could be iced in for most of the winter, and it's also probably just not going to be very fun to use in mid-January. You can tell the boat insurance provider that you'd like to suspend the policy from something like November until May. Keep in mind it won't be insured during that time so it's best to store it somewhere safe until you get back to the insured part of the year.
Contact a boat insurance agent to learn more.
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