Since the law requires drivers to carry auto insurance when operating vehicles on the roadways, many people wonder if the same applies to boating on the waterways. The answer is it depends on the situation. Some states require boaters to carry liability insurance at minimum, while banks mandate owners maintain full coverage until their boat loans are paid off. Even if boating is not required in your situation, here are three reasons why you should still invest in it.
Your Auto Insurance Doesn't Cover Your Boat
Many boat owners erroneously believe their auto insurance policies will cover any damages if their boats are involved in accidents while being transported on the roads. In reality, your auto insurance may cover the trailer the vehicle is attached to, but it won't pay to repair or replace the boat itself.
In fact, your auto insurance won't cover any damages caused by the boat either. For example, if the boat falls off the trailer and collides with another car, your policy won't cover the cost of damages to the boat nor the other driver and his or her vehicle. Even if the boat was attached to the trailer at the time it collided with another vehicle, whether the resulting claims will be paid will depend on how your insurance policy is worded.
To protect yourself and your financial future, obtain a separate boat insurance policy. Without this additional insurance, you could be stuck paying for repairs and other losses out of your own pocket.
Coverage Under Homeowners Insurance Is Limited
Another misconception many boat owners have is that their homeowners insurance policies will cover claims involving those vehicles. The truth is a little more complex. Homeowners insurance will cover some watercrafts, such as canoes, kayaks, and small sailboats, but typically exclude larger vehicles like yachts. Additionally, coverage is often limited to damages that occur while the craft was on your property or in storage. Claims for accidents that occur on the open water will be denied.
Most importantly, though, the amount of coverage available through homeowners insurance for watercraft is typically minimal. At most, you may get $1,000 or a certain percentage of your home's worth (e.g. 10 percent of the house's market value). For most boats, this is a woefully inadequate amount of money, particularly if the vehicle suffers substantial damage or gets stolen.
It should be noted, though, that some insurance providers do offer riders that will provide additional coverage for watercraft. These can be more expensive than regular boat insurance, however, so it's best to compare your options before settling on one or the other.
Protection for Incidents During the Off-Season
A third reason you'll want to purchase boat insurance is to ensure your vehicle remains protected even when it's not on the water. People are so focused on possible accidents that could happen on the water that they forget there are land-based hazards they need to keep an eye out for as well.
For instance, a tree could fall on the boat while it's in your driveway, or someone could steal the vehicle. As noted previously, your auto and homeowners insurance will be of little to no help when it comes to these matters, so maintaining your boat insurance year round is your best option for protecting your property.
If you're concerned about costs, you can always adjust your policy to lower the limits to something more affordable or switch to another cheaper provider. However, completely eliminating your coverage altogether may just be asking for trouble.
For more information about boat insurance or to obtain a policy for your watercraft, contact a broker or boat insurance company.