Having a boat is a big responsibility, but knowing how to stay safe and protect your investment is equally important. Most people don’t realize how crucial boat insurance is when faced with a tragedy. Here are a few basics that will help you understand why you shouldn’t go without it. 

• Depending on the size of your boat, you may be able to obtain partial coverage under your current homeowners policy, which helps cover damage or loss. This coverage is often quite limited. 
• If your boat can travel over 25 miles per hour, you should have a boat insurance policy to provide more adequate protection. 

What does a standard boat insurance policy cover? 
Typical policies cover your boat, the boat cover, fishing equipment, navigation systems and communications equipment. There are different levels of coverage that may include: 

• Bodily Injury Liability: This covers any injury or harm caused to someone else due to an accident. For instance, this could be hitting someone who is swimming, or inadvertently cutting someone with the propeller.  
• Property Damage Liability: If you cause damage to someone else’s property, this policy can help with those expenses. 
• Physical Damage: This policy can help with any physical damage caused to your boat or accessories, in or out of the water. 

These coverage options are all relevant, whether your boat is a small motorboat or yacht-sized. If your boat/watercraft has been damaged, your insurance company works with you to come to an agreed value settlement or an actual cash value settlement. 

What is the difference between agreed value and actual cash value? 

• Actual cash value uses a formula that weighs the condition of the boat at the time of the accident or loss, accounting for the depreciated cost. 
• Agreed value allows you to insure the full value of the watercraft for full replacement after being assessed by a specialist. 

Having adequate insurance can help protect you and your family. For the protections it offers, boat insurance is very affordable. Boating accidents can cause thousands of dollars in damages. Being able to offset those costs is worth it. Boat insurance components vary, but a comprehensive policy can help cover huge financial losses.