Scott Croft: Hi! This is Scott Croft, Director of Public Affairs of BoatUS. Today, we are talking about boating basics, and one of the most important is buying boat insurance.
Let's look at our couple common myths about buying boat insurance that I hope will help you become a better consumer.
Here is myth number one; If you understand homeowners or auto insurance, then you understand boat insurance.
Most consumers are familiar with standard home or auto insurance policy language, so it's easy to shop on price as long as each insurance company has about the same service. Then when you have to file a claim, each company will treat the loss in the same manner, right?
Well, not true with boat insurance, because each company can include or exclude whatever coverages it desires. That means one company's policy could cover damage if your boat sinks, for example, while another company could exclude the same loss attributing it to simple wear and tear.
For example, true boat specialty policies will have 247 emergency response operations to not only take the first report of a claim, but they are also able to dispatch resources needed to immediately recover and repair the boat, that can also reduce the boater's exposure to fines and penalties if their boat is sinking or perhaps leaking fuel.
Here is another example. After a hurricane most homeowner's insurance companies primarily focused on processing claims for homeowners, leaving boats a distant second, that's a problem because the longer you wait, the more damage that could possibly occur to your boat.
Now here is myth number two: All marine specialty insurance companies sell the same thing, so it's just easy to shop on price, right?
Again, even among marine specialty insurers, all policies aren't the same. So the first task is to review the exclusions to see what losses are not covered. A fairly standard exclusion usually starts with wordings such as, "Any loss caused directly or indirectly by wear and tear, gradual deterioration, rot, corrosion, etc.
" Then check the policy to see if it has a provision to add back what's called Consequential Damage Coverage.
Consequential Damage Coverage appeals to many boat owners because it covers the consequences of a loss that was a result of wear and tear, deterioration, rot, or corrosion.
In plain English; if consequential damage is not covered in your policy, many sinkings or fires could be excluded, because they started with the part of the boat or machinery that wore out.
Lastly, some boat policies limit salvage coverage, or combine salvage expenses with other repair expenses in the same pile of money to handle your claim. This means, if your boat sinks and the combined loss to salvage and repair her surpass your policy's limits, you'll be on the hook for the rest.
Most boaters need an insurance policy that treats salvage and repair expenses separately. Here is what I mean, if your boat is insured for $40,000, you should have up to the full value $40,000 available for salvage, and another $40,000 available for repairs or replacement.
I hope, I have shed some light on buying boat insurance and knowing what's in your policy, can mean a difference of getting back out on the water quickly or a long time spent ashore.