Understanding Your Boat Insurance Policy Coverage

Understanding Your Boat Insurance Policy Coverage

In most areas, boat insurance is required by law for many types of vessels. The requirements may vary based on the type of boat that you have, the size of the vessel and the body of water where the boat is located. If you are preparing to purchase boat insurance for the first time or if you are preparing to update your existing boat insurance policy, you need to clearly understand the coverage requirements if you want to set up a protective policy.

Your Boat Insurance Requirements
Boat owners are often legally required to purchase a minimum amount of boat insurance, and this insurance is usually liability coverage. If you have a secured loan on your boat, your boat lender may also require another type coverage. Lender coverage requirements may be for comprehensive insurance. While these minimum coverages may be required, the boat owner may be able to establish the deductible amount for the policy.

Liability Insurance
Liability insurance for your boat pays for the damages that you cause to others while using your boat, and it could also extend to damages caused while towing your boat on land. This could include property damage, personal property damage and medical bills. You may need to add a special towing clause to the policy to include coverage when your boat is on a trailer. Your local government may establish minimum liability requirements for boat insurance, and you may be permitted to set a higher coverage limit as desired.

Comprehensive Insurance
Liability insurance does not usually pay for any of your own boat repair or replacement expenses in the event of an accident. Your boat lender wants to ensure that the value of the boat is insured, so comprehensive insurance may be required. Through comprehensive insurance, your provider may pay for any repair work or even for a full boat replacement if the boat is damaged. While you also have some leeway to establish your desired coverage limit with this type of boat insurance, insurance companies usually will not pay out on a claim more than the current value of the boat at the time of the incident. Therefore, it is not cost-effective to buy more comprehensive boat insurance than you could benefit from.

Many boaters enjoy years on the water without a mishap, but accidents may happen out of the blue. You need to be properly insured to meet legal and lender requirements at all times, and you also may prefer coverage even if it is not required because of the benefits that it can provide. Now that you understand more about the common types of boat insurance that are available, you can set up coverage that is most beneficial to you.

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