Power Boat Insurance: What it Will Cover, and When it Will Not

It doesn’t matter if you’re ripping along the waves at the helm of your speedboat or enjoying a wild ride on an inner tube behind a powerboat, it’s important to know that your watercraft is covered if an accident occurs.

The Difference between Power Boats and Other Vessels

Power boats are considered the sports cars of the boating world for boaters that are looking for high speeds and precision handling to cut through inland waters or at sea. What sets these boats apart from other watercraft is their specially designed hull and large motor, making boat insurance a must.

Some may think it’s not necessary to carry coverage and others may think they are covered under their homeowners’ policy. While some homeowner’s policies provide some coverage, it’s usually for small boats like a canoe or small sailboat. On occasion, a homeowner policy will provide coverage for a powerboat with less than 25 total horsepower. But ultimately power boats should have their own policy.

Power Boat Policy Basics

Power boat insurance provides coverage if your boat is damaged or destroyed by a covered peril; such as a collision, fire, theft, lightning, windstorm, or vandalism. This type of physical damage coverage is commonly referred to as Hull coverage. Hull coverage is comprehensive and may include spars, sails, furniture, machinery, dinghies/tenders, outboard motors, fittings, and other equipment generally needed to operate or maintain your craft. This coverage is provided on an Agreed Amount Value or an Actual Cash Value basis.

Agreed Amount Value- with Agreed Amount Value policies, you and the insurance company have agreed on the value of your boat. If a total loss occurs, the insurance company pays that agreed upon amount.

Actual Cash Value -with ACV policies insurance companies pay for Replacement Cost less depreciation. If a total loss occurs, insurance companies will use boat pricing guides and other market resources to come up with the approximate market value of your boat at the time of loss.

As with auto insurance, physical damage coverage is typically subject to a deductible you chose when taking the policy out. Many times, the higher the deductible, the less you will pay in premium, but the more you will pay at claim time. With boat insurance, you can choose a deductible that is a percentage of the watercraft value, such as 1%, 2%, 3%, or flat amounts of $250 or $500.

It’s also essential to understand boat insurance separates how your motor is insured. Coverage for your stern drive or outboard and internal machinery can be protected on a replacement cost or depreciated value basis.

Other coverages you can add to your powerboat policy:

Boat liability-Provides coverage if you are found liable for the damage to property or the injury to another person other than yourself or a family member.

Medical Payments– This provides coverage for realistic medical, ambulance and hospital costs if a passenger is injured while they’re in, boarding or exiting your boat.

Uninsured Boat Owners Coverage-Provides coverage for injuries sustained in an accident that the owner or operator of an uninsured boat or “hit-and-run” boat would be responsible for paying.

Towing-Reimburses you for the reasonable costs acquired when you break down at sea and need a commercial tow to back to dry shores.

Items Your Power Boat Policy May Not Cover

All insurance policies have exclusions. While the items may vary from company to company, all include the following excluded loss from the following:

  • Wear and tear
  • Gradual deterioration
  • Mold
  • Weathering
  • Insects
  • Marine life
  • Animals

Other exclusions that companies may or may not have included:

  • Damage from zebra mussels
  • Osmosis or blistering
  • Marring, scratching, or denting
  • Manufactures defects
  • Latent defects
  • A design flaw
  • Corrosion

 Final Thoughts

A day out on the water can be a pleasant activity no matter the season, but fun with family and friends can instantly turn if care isn’t used to avoid accidents. While safe boating is possible, it does require a little planning before heading out, and a careful eye for any hazards once on the water. With the proper insurance coverage and following these six boating safety tips, you will always have smooth sailing.   Remember to always:

  1. Wear a life jacket.
  2. Let someone on dry land know of your plans on the water.
  3. Watch the weather.
  4. Know how much gas you have.
  5. Be boat sober.
  6. Navigate your vessel in accordance with the US Coast Guard “Rules of the ”

To learn more about Power Boat Insurance, contact the experts at Demont Insurance Agency at (800) 522-1997. Our licensed insurance experts are waiting to answer any questions you have.


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