Insurance

Insurance Cover

While water transportation may be considerably or comparatively safe, it is not without skirmishes. And to avoid running into heavy financial issues when these occur, you should ensure your boat. Here we outline the options for insurance available to you and the factors to consider.

Types of Boat Insurance

There are typically several forms of boat insurance, but we will only examine a few, namely:

• Agreed Value; and
• Actual Cash Value
• Third-party Liability
• All-risk policies.

What differentiates them is how they designate depreciation.

1) Agreed Value Insurance

In the case of agreed value insurance, the insurance policy’s value will be based on the value of the boat at the time you took up the policy. In other words, anytime the boat is lost or damaged, the insurance cover will be based on the boat’s value at the time you signed the policy.

For instance, you took up the insurance in 2013, and the boat got badly damaged beyond repair in 2019. Most times, the insurance company will pay you based on the value of the boat in 2013.

This is why the agreed value policy costs significantly higher upfront.

2) Actual Cash Value

 On the other hand, the actual cash value will pay you insurance cover based on the boat’s value as at the time the damage or loss happened. Thus, you may take up the policy in 2013, but the boat got damaged in 2019. Here, you will be paid based on the value in 2019.

3) All-Risk Policies

This type of policy will typically cover almost all types of risks, especially those not included in the boat insurance policy.

The excluded risks include liability for pollution or reef damage, ice damage, mechanical issues and medical insurance.

4) Third-Party Liability

This type of insurance policy will account for the damage that your boat causes to those of others. It may also cover any unforeseen or accidental damage and other expenses. This may include fuel spills, medical bills, towing and rescue operations expenses.

Factors to Consider When Taking up Boat Insurance

Several factors may affect the type of insurance and the insurance premium you have to put up. Here outlined are some very important ones.

Driving History

Your driving history is an important determinant of the insurance premium that you have to put up. If you are considered a risky driver, the insurance firms will want to charge higher. However, if you are considered safe, the insurance premium may be much lower.

Experience with Boats

How good are you with boats? What is your history with them? What is your claim history?

These factors may affect your insurance premium. If you have experience with boats and have a low claim history, your premium may below.

Driving Area

The location where you plan to navigate the boat might affect the insurance premium you have to pay. Some areas are reasonably riskier than others. These areas will typically attract higher premiums than those considered less risky. For instance, navigating on small water bodies like a lake is reasonably less risky than navigating an ocean.

Some insurers choose not to insure boats that ply some bodies of water.