When it comes to boating, the only surprises you want are unexpected whale sightings. But we all know the unexpected happens - and that's why we have boating insurance. But boating insurance doesn't - and shouldn't - protect you from everything. To avoid getting hit with unexpected bills and expenses, you have got to take initiative and understand your boat and your policy.
- Keep policies current. That means you need to update your boat insurance policy to account for any refitting or major upgrades. The rule of thumb: If your upgrade or refit materially changes the market value of the boat, you need to upgrade your policy to reflect the replacement value of the boat. If you lost the whole boat, and everything in it, what's the true replacement value? Tip: Insurers take account of depreciation. Unless you keep careful records documenting every new upgrade or piece of personal property on the boat, they will assume everything is the same age as the boat itself. That's tough when you just put a brand new engine on a 20-year old boat. They'll pay for a 20 year old engine - and you won't be made whole in the event of a total loss.
For example: Many yacht owners have taken to installing high end home theater or AV systems in their boats. These installations can run tens of thousands of dollars and more - and are a frequent target for thieves. If you install an A/V system into your boat, and it gets ripped off, you will get a check for the verifiable damage to the boat - but not for the stolen A/V equipment, unless you get your policy adjusted so that the new system is covered.
- Take care of the boat. Maintenance is a part of boat ownership. Maintenance costs, including periodic trips to drydock for a thorough hull scraping, should be figured into your overall cost projections. As they say, a stitch in time saves nine.
You'd think people shouldn't have to be told anymore, but boat owners frequently ask things of their boat engines that they'd never expect their cars to do. Like operate leak free even though the seals have dried out from weeks or months of disuse. Basic maintenance tasks like changing engine oil once in a while, and being sure to crank that motor up on a regular basis to keep fluids moving through the hoses and around the metal parts go a long way to reducing overall boat ownership costs, and preventing major repairs and the replacement of entire engines.
- Store the boat properly. When you pull the boat out of the water, tilt the bow upwards a little, and remove the drain plug to allow any water that gets past your covers, if any, to drain right out of the boat.
- Don't forget your fishing gear. Many fishermen - professional and recreational - will buy a boat, insure it, and then spend thousands on tackle, mounts, swivels, chairs and the latest gee-whiz sonar fish locator system. If something happens to the boat, and you don't contact the carrier and add that gear to your policy, it's not covered.
- Keep an inventory. Create a list of everything of value on the boat, by serial number. Photograph everything. Keep your receipts. Hint: Don't keep your receipts and inventory on the boat.
- Document incidents. Take photos of any damage at the scene, as soon as possible.
Remember, boat insurance is structured differently than auto insurance. Where auto insurance is designed to pay the full replacement value of a given make and model car, with a given amount of miles on it, boating insurance is much more variable. There's nothing as reliable as a Blue Book to guide boat insurance adjusters, and the market is much less liquid. As a result, documentation is even more important for boat insurance than it is for auto insurance. Read and understand the policy, what it covers, what it doesn't cover, and ensure any changes to your boat's value or any additional property on the boat is documented.