Boat insurance can be required by the state, the organization that controls the body of water, the marina where you dock your boat, or the company that you leased the boat from. Whatever the case may be, no boater should ever get out on the water without the proper form of coverage. Those without one of these policies may find that even a minor accident could cost them much more than their recreational vehicle.
Who Needs Insurance?
Boat owners should first speak with an insurance specialist to see if there are any state or local laws about maintaining insurance. It is also important to check with private companies such as where the boat was leased from, where it will be stored when it is not being used, and any marinas that it is docked at. Most of these organizations and agencies will require at least some basic coverage such as general liability insurance.
Exploring What Is Covered
Basic coverage will help boat owners with their financial responsibilities after accidents, injuries, theft, or vandalism. This includes situations such as two boats colliding, stuff being stolen out of the boat while docked, damaging the boat when docking, passengers injured on the boat, and some basic engine problems. Even for recreationally boat owners with an affordable craft, failure to have this form of coverage could result in huge medical bills or even an ongoing legal battle between multiple parties. In the worst scenarios, a minor accident may cost a boat owner much more than the value of their boat.
ACV or AVP
Boat owners will also have to decide if they want an actual cash value (ACV) policy or an agreed value policy (AVP). With an actual cash value policy, the insurance provider will pay the value of the vehicle minus depreciation. As the vehicle ages and is used more, the value of the policy will go down. An agreed value policy is more expensive, but it will payout a specific price no matter how old the boat is. Owners that would like to have a higher payout will need to pay higher deductibles and premiums.