Types Of Boat Insurance Policies

Companies that insure recreational vessels may offer two different classes of coverage: boat policies and yacht policies.

A boat policy usually is shelf policy offering:

• Generally few options other than a choice of P&I limit amounts, and it probably doesn’t offer P&I coverage greater than $500,000.
• Pays actual cash value (ACV, book or depreciated value).
• Trailer, some personal effects, and passenger bodily injury probably are included.
• Engines, outdrives, and other equipment probably are not covered for failure, although they probably are covered for theft and fire.
• May be “bundled” with other policies, such as auto and home.
• Usually are budget-priced, simply because they provide less coverage.
• Due to overhead and administrative costs involved with placing coverage, many agents will only offer boat policies for vessels less than about 26 feet and $30,000 in value.

A yacht policy has more range of options:

• It probably pays agreed value in case of total loss.
• It may cover sudden, accidental engine and drive failure.
• Towing, salvage, pollution, and wreck removal probably are covered
• Higher liability limits may be offered.
• Tenders and dinghies can be added to yacht policies.
• Some policies have an option for occasional commercial (charter) use.
• Inclusions, exclusions, endorsements, and premiums can be negotiated.

If your boat will be laid up for a long period of time you may want port risk coverage, which is cheaper than full operational insurance, and if you are having a boat built or refurbished you can get builder’s risk insurance.