The Best Watercraft/Boat Insurance Coverage in Florida

In a typical insurance policy, the company agrees to two basic coverages.

Physical Damages

This coverage refers to any damages that are caused by accidents involving the boat. It covers damage to the boat or its machinery such as the hull, the prow, the sail, the lines, and the anchor, to name a few. It also covers personal equipment, tools, personal property, and other necessary equipment such as navigational and signaling devices.

The coverage for physical damage includes almost all perils stated above, such as nature-caused damages. Some insurance companies have limited coverage for hailstorms, but most of them cover wind, lightning, waves, and rain. Your policy will also cover damages brought about by incidents such as collision and sinking.

However, most policies only include coverage when your boat is in the water. But this does not necessarily mean that you cannot go the extra mile and insure your boat while it is dry-docked or being transported over land.

Also, policies typically do not cover wear and tear of the boat and its machinery. You have to make a habit of securing and maintaining your boat to minimize these damages.

Liabilities

This coverage concerns the responsibility that the policy-holder has to a third party. You can use it in any untoward incidents that result in loss of life or physical injury to other persons. Liabilities can also cover damages done to other parties’ properties, such as their boats or other floating devices. If another party involved sues you for your involvement in the incident, liability coverage can also pay for your legal fees.

Basic Insurance Coverage Breakdown

Aside from the central concepts stated above, here is some additional information you may need to know regarding these two basic insurance coverages.

• Physical Damage Coverage Agreed Value and Actual Cash Value

In physical damage coverage, you will likely be introduced to the two terms above: the agreed value and the actual cash value. Both of these have advantages and disadvantages to you as the policyholder.

The former gives you the security that all value stated in the policy should be paid if your boat cannot be used further after an incident—if the boat is a total loss. And, if only some of the equipment is damaged, then it will be replaced. Some of the more heavily used equipment, such as sails and canvas, can be subject to depreciation rates because they are more prone to wear and tear.

Actual cash value, on the other hand, concerns market trends and depreciation. In the event of a total loss, the provider will look for the current market price of your boat, considering depreciation. In a partial loss, it will also take into account parts depreciation when determining your replacement cost.

Comparing the two side by side, agreed-value coverage generally costs more than an actual cash value policy because it offers more security and coverage.

• Liabilities Coverage Extra Features

Being involved in an unfortunate incident is no simple thing. Taking into account the gravity of the situation, it can take more than just settling the costs and sailing away from worries.

In reality, you should be prepared in case the boat is totally wrecked. Then, you may need to have the wreck removed and disposed of. This is especially true if the incident happened on a frequently used navigation route where it will be deemed a hazard.

Some incidents may even cause hazards to the environment; for example, the oil tank may cause water pollution. If you carry other types of hazardous material these may be potentially harmful to marine organisms.

These are must-haves for your liability coverage in your chosen insurance policy. It is better to check beforehand if they are covered so you won’t be surprised as you watch the damages—and the hefty costs—unfurl before your eyes.