Even though boat insurance isn't required in every state, boat owners need to realize that, like automobiles, boats or yachts can cause accidents that injures people and damages property. Subsequently, the injured or those whose property has been damaged can file a lawsuit and demand settlements, as boat owners will be held liable for all damages they cause. Hence, it is wise to spend some time and money to insure your boat even if you do not use it frequently.
Boat Insurance Average Cost
The average cost of insurance is determined with the help of three basic factors, that are, the size of the boat, age of the boat and fixtures that are fitted on to the boat. The size of the boat is usually specified in feet and is used to determine the basic premium and cost. For example, the annual premium for a 25 feet boat can range from about $300 to $500 per annum. There are also insurance policies for smaller boats which cost lesser, even lesser than $50 annually. Apart from that, local governments and some state governments also mandate insurance compliance for boats.
The following are some important factors which might increase your annual cost of insurance:
- High horsepower motors is one feature of your boat which tends to increase the premium significantly. Now it goes without saying that, higher the horsepower higher is the premium.
- After the series of violent hurricanes and storms following the year 2000 which affected both regional and national populations, the area of operation of the boat also becomes a basis upon which the premium or annual cost of the insurance is decided. Thus the riskier the area, costlier is the insurance. Marine features, hydrography and nature of water and waves also plays a crucial role in determining the premium.
- Older and preserved boats, also tend to have higher premium charges, as they have low reliability and high repair and restoration costs. Also the probability of them getting into trouble is higher as compared to other modern and newer boats.
- Often the purpose of the boat, its capabilities and key characteristics tend to define the amount of premium. For example, if you sail your boat in international waters, then you will need to pay a higher premium. The international blue waters increase the cost of premium as the risk of sailing in such waters is more. Green water and brown water boats will cost you lesser premiums. But again if you berth in a core sailing port which has crowded ports, then you will have to pay a little more. Riverine or lake boating in contrast will cost you lesser premium.
Hence, you basically need to choose what you want to cover.
- Conventional insurance, which is the cheapest, usually covers, hull, machinery and motors, fixtures and navigation gear. In some cases, all kinds of equipment, fixed and non-fixed are also covered.
- Some companies include, a sailing and all risks cover in the policy. It means that if you meet up with an accident and the boat does not sink, then several of the repair and replacement charges are compensated.
- Another cover which is very expensive is the salvage and re-float cover. Under such a cover, the cost of salvaging a sunken boat and re-floating is compensated for by the insurance company.
- Another similar expensive cover is the 'natural disaster' cover, where damages occurring as a result of natural disasters are compensated.
- A collusion cover compensates for some damages which have occurred as a result of collision. This coverage works like an auto collusion over.
- Sometimes boats get damaged due to small mechanical and machinery related problems. In such cases, an on-broad accident cover can also be used.
Understanding Boat Insurance
A boat insurance is a type of tailored or custom-made insurance that 'covers' your boat. Insurance coverage becomes applicable after you purchase the policy from the insurance company. The functioning of this insurance is quite similar to auto insurance.
- Every year, you will have to pay the insurance company a specific premium, as a cost of coverage. Premium can also be paid on a monthly, quarterly or six-monthly basis. The premium needs to be paid till the policy is operational.
- In due course of the policy, if your boat is damaged in an accident, sunk, struck by calamity (often known as a 'Act of God') or even stolen, then the insurance company shall compensate you for certain losses. The terms and conditions of compensation are stated in the insurance agreement. Now it may also happen that not all damages (or liabilities) are compensated for as they were not covered or mentioned in the agreement.
- Coverage of a certain insurance policy is principally a list of things, actions and incidences, leading to damages. The ones which are included in the agreement, are covered by the company, i.e., compensated for. The list is included in the insurance quote and agreement, and is compensated for by the company. In a maximum cases, claims which are not included in the coverage are summarily rejected by the company. In certain situations however, partial compensation is provided for items which were not included in the coverage. This situation is of course quite rare.
The coverage and the premium of the policy depends upon several factors. It must be noted that the two things are directly related and the rule of thumb goes that, the wider your coverage, the more the premium. Thus, it goes without saying that if you want more things covered, you need to pay more.
Sometimes, theft, liability and settlement coverage is also included. Average cost of such an insurance policy is of course bound to be high, with annual premium sky rocketing. There are several luxury boats that are bound to have extremely high premiums due to their high value. Note that every new addition in your over-all cover is going to cost you, hence you need to assess and analyze what kind of coverage you need.
Requesting a quote from the company itself is the best way to get know the cost of policy. Average cost of policy and premium is derived and calculated on the basis of the boat itself, hence, every boat is bound to have a unique insurance policy, with unique quotes, specs, premiums and costs.