First let's tackle the question of whether you need a separate insurance policy for your boat at all. If your boat is small and has limited or no power, the chances are that your homeowner insurance policy will afford you all the protection you need, although you may need to modify, or endorse, your homeowner policy.
A typical homeowner policy includes liability protection for small boats with horsepower for only modest speeds. Some examples of boats like this include canoes, small sail boats and small power boats. Your homeowner policy will also provide some insurance for damage or loss to the boat, motor and trailer. In most cases the amount of protection will be limited to $1,000 or 10% of the home property value - and that's for the aforementioned boating equipment combined.
A Boat Owner or Watercraft Policy may be for you if you need more protection for your basic boating property; need to cover other equipment like fishing gear, boat covers, fenders or navigation or communication equipment. You may also need a Boat Owner Policy if your boat is larger or is capable of speeds in excess of 25 mph
A Boat Owner Policy combines a number of different kinds of coverage including:
Liability and Medical Payments, Theft, Physical Loss or Damage to the hull, machinery, fittings, furnishings and permanently attached equipment; Towing and Assistance; Uninsured Boater
There are few other things you need to know about. Insurance companies will draw a line on boat size, often at 26 feet in length, and after that consider the craft to be a yacht. If that describes your boat then you are eligible for yacht insurance.
Your homeowner policy may not provide adequate protection for Jet Skis and Wave Runners so you should look into a separate policy, often called a Personal Water Craft Policy (PWC).
Your boat policy will come with a deductible and the deductible may apply differently to different types of property and loss. Reimbursement for physical loss to property may be on an agreed amount, actual cash value (ACV, which is cost new less depreciation) or a replacement cost basis. Again, reimbursement for different types of property may be handled differently by the same policy.
It may be important to you to make sure you have coverage during storage, while the boat is in transit or if you hire a crew. There is more variation in boat policies offered by insurance companies than there is for auto insurance, even though the types of coverage are similar. This variation also extends to the area of discounts. Discounts may apply for:
- Lay Up Periods
- New Boats
- Burglar Alarms
- Coast Guard Approved Fire Extinguishers
- Safety Courses (see these websites: http://www.cgaux.org, http://www.usps.org)
- Ship-to-Shore Radio
- Diesel Power
- Multiple Policies with the Same Insurance Company (e.g., Auto, Home)