A Guide to Boat Insurance - Trident Funding

A Guide to Boat Insurance

Trident Funding - A Guide to Boat Insurance

You know you want to join the illustrious boat owners club. You can’t wait to start picking up new hobbies like fishing, wakeboarding, and tubing, and most of all you can’t wait to just enjoy the sunshine, share some laughs, and make some memories onboard with friends and family. You’re excited for boat life and everything it entails. 

You’ve found a boat that you love, used a boat loan calculator and check current rates to see how much boat you can afford and what your approximate monthly payment will be. You’re going through your mental checklist of what else you need to do before you can get out on the water and enjoy sipping cocktails on the bow of your new beautiful boat. If you’re ready to secure boat loan financing, learn how we do boat loans at Trident Funding

Suddenly you remember that you need to buy boat insurance! No need for an SOS, just keep reading to find out all you need to know about marine insurance including boat insurance quotes, boat insurance costs, what to look for in a policy, and where to find insurance for your new boat. 

Boat Insurance: What You Need to Know 

Boat insurance is recommended for all boat owners and operators regardless of whether it is required or not. Whether you buy a small fishing boat, a tricked out speed boat, or a fancy yacht, you will want to protect your boat and yourself from personal liability, expensive damage costs, citations, and other financial and time consuming burdens. 

The type of boat insurance you will need and its cost will vary greatly and will depend on a variety of factors including if the boat is used as your residence, the type of motor it has, how many owners it has had, and more including:

  • The year of your boat 
  • The size of your boat
  • The value of your boat
  • The condition of your boat
  • Where you’re going to store your boat
  • The state the boat is registered in
  • The boat’s horsepower
  • The owner’s boating history and experience 
  • Prior marine insurance claims 
  • How often you plan on using your boat
  • Where you plan on taking your boat
  • Whether your boat is for recreational or commercial purposes

How Much is Boat Insurance

When deciding on boat insurance, you will want to shop around and get a few boat insurance quotes so you can compare prices, deductibles, company ratings and reviews, and coverage options. There’s no one size fits all marine insurance policy. Boat insurance policy costs vary based on a number of factors including the boat’s size, use, value, and condition. 

Boat insurance may be as affordable as $200 to $500 per year for a small inexpensive boat and may cost tens of thousands of dollars per year for a yacht. Typically, expect to spend around 1% to 5% of the boat’s value per year as a rough estimate for boat insurance. For example, if you have a boat that is worth $100,000, expect to spend anywhere from $1,000 to $5,000 per year for a comprehensive boat insurance policy. That breaks down to about $83.33 to $416.67 per month. 

Keep in mind that many marine insurance companies will accept a downpayment on your premium and the remainder can be paid in monthly payments which makes it more affordable for many boat owners and easier to fit into your boat budget. This way you don’t have to pay the entire year up front. 

Other ways to save money on boat insurance include taking boating safety courses, having zero recent marine insurance claims, and bundling your marine insurance policy with your home and auto insurance policies. Insurance companies may also give discounts if your boat is stored inside, if you have a clean driving record, and if your boat is only going to be used in fresh water and not in salt water. 

When you’re budgeting for your boat, remember to check out a free boat loan calculator to get an idea of how much boat you can afford. Then add on approximate insurance costs to ensure you can still afford the boat. 

What’s Included in a Boat Insurance Policy 

Just like your boat may be very different from your neighbor’s boat, your policy will be as well. You want a policy that specifically covers your type of boat, its intended use, its value, and is based on the location it will be housed because boat insurance costs vary greatly even from city to city and especially from state to state. 

Marine insurance policies not only cover boats, but they can also cover yachts, jet skis, sailboats, dinghies, boat clubs, and boat rentals and personal watercraft rentals. 

Some things to look for in a boat insurance policy include:

  • Uninsured boater protection
  • General liability coverage
  • Medical payments
  • Damage to your boat, its hull, equipment, motor, and furnishings
  • New boat replacement
  • Wreck removal coverage
  • Damage to another boat
  • Coverage for personal property onboard
  • Coverage against theft and/or vandalism
  • Coverage for weather related incidents
  • Coverage for onboard fishing equipment
  • Fuel spill liability

In addition to what your boat insurance policy covers, you may want to add on additional coverage. Some examples of this include sea towing, cruising extension for leaving the USA, salvage insurance, consequential damage if there was a major loss from wear and tear, and specialized coverage. This specialized coverage may be used to cover a specialty item like an especially expensive piece of navigation equipment in the event that it gets damaged or lost. 

Where to Buy a Marine Insurance Policy 

Trident Funding can guide you in the right direction of recommended and reputable marine insurance companies. When you work with us to get a boat loan, we don’t just stop at the loan, we help you with the entire process of buying a boat. This includes your boat insurance needs, registration, title, Coast Guard inspections, and the closing process. 

Additionally, check with your current auto and home insurance provider and see if they offer marine insurance. You can also check with your friends who own boats and see who they recommend. A local marina and boat dealer will also be able to recommend some marine insurance companies. You can also check online and type in the ZIP code of where you’re going to store the boat to see if coverage is offered in your area. Check the company’s online reviews, years in business, overall reputation, and how claims are handled. Find out things like how and where to file a claim, how to contact customer service with questions, and what their business hours are. 

When you purchase boat insurance, you may also get access to free or discounted boat emergency towing services, as well as boating safety materials, and helpful tips and tricks for first time boat owners. Most large marine insurance companies offer websites with online portals and you can often file a claim online or over the phone. 

Commercial Boat Insurance

You may be using your boat as a business and in this case your insurance needs will be much different than a recreational boat owner’s insurance needs. Whether you own a small deep sea fishing business, a large fleet of commercial fishing boats, are a ship builder, a boat manufacturer, or a yacht charter company, you need commercial boat insurance to protect yourself, your boats, your employees, your cargo, your customers, and your company. 

Commercial marine insurance can apply to any watercraft that is used for commercial purposes. Keep in mind that your specific business will dictate the exact type of coverage you need. There are many coverage options and choices, but typically you will need at least the following things to be included in your marine policy including uninsured watercraft coverage, workers compensation, wreckage removal, and:

  • General liability coverage: property damage, bodily injury, advertising injury, and reputational harm
  • Excess liability insurance: Known as bumbershoot insurance which covers situations that may exceed the general liability policy limits
  • Hull and machinery: personal property, unattached equipment, propulsion equipment, attached equipment
  • Indemnity and protection: Bodily unjust claims coverage for passengers and crew as well as boat operation liability and property damage coverage
  • An equipment rental and sales policy: For repairs, accidental cleanups, equipment breakdowns, and replacements
  • Ocean cargo: Inclement weather, improper loading, and rough handling 

The Wrap Up: Boat Insurance 

Now you know that boat insurance is essential for boat owners and it should be factored into your budget. It can save you thousands of dollars in the long run, can prevent additional stress and worry, and is often required by boat lenders. Having the proper boat insurance for your boat can give you peace of mind, protect you from personal liability, and make it more affordable if you need to fix your boat after an accident or a storm. 

If you’re purchasing a boat and need a boat loan, check out Trident Funding. We are a marine financing leader with more than three decades of experience. You can apply online and a knowledgeable associate will get back to you within 48 hours. We operate like a boutique by treating each customer like a friendly acquaintance. We also offer competitive rates, terms up to 20 years, and work with a variety of lenders to fit your unique financial needs. Trident makes the boat loan process smooth sailing. 

Frequently Asked Questions: Marine Insurance

Is Boat Insurance Required?

Boat insurance is always recommended, even if your state doesn’t require it, or if you buy your boat in cash and don’t use a boat loan. However, it is required by most marine lenders if you opt for paying for your boat with a boat loan. 

If you get a boat loan with a reputable marine financing company like Trident Funding, marine insurance is required, but Trident Funding will help you through the entire process including recommending insurance providers and scheduling any necessary inspections. 

What Are the Types of Boat Insurance?

The two main types of boat insurance are an agreed value policy and an actual cash value policy. The agreed value policy is based on the value of the boat when the policy is written. It’s typically the more expensive policy for upfront costs but there isn’t any depreciation for the total loss of a boat. 

The actual cash value policy only pays out the actual cash value of the boat at the time of the reported loss. This policy is less expensive upfront but takes depreciation into account over time.  

What Is Not Covered By Boat Insurance?

What is and is not covered will depend on the type of boat insurance policy you have. Make sure to read the fine print and have the insurance agent explain anything you’re unclear about. You don’t want to choose a policy and realize that certain things aren’t covered after you already purchase it. 

Things that are not typically covered by boat insurance include:

  • Normal wear and tear
  • Maintenance items
  • Gradual deterioration
  • Damage caused by marine life or insects
  • Mold 
  • Damage or losses caused by negligence or misconduct 

What Happens if You Don’t Have Boat Insurance?

If you don’t have boat insurance, you may be breaking your financing contract if you have a boat loan. You may also be breaking the law in some states that require boat owners and operators to have up to date boat insurance. Additionally, you’re putting yourself at risk for litigation, and tons of headaches, and out-of-pocket expenses. You may get sued if you don’t have boat insurance, you may get a citation, and your entire boat loan may be due. It’s not worth it to take the risk. Make sure you and your boat are protected and purchase marine insurance. 

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