Have You Had a Boat Insurance Checkup?

3 important coverages boaters sometimes overlook

For the majority of recreational boaters, a boat insurance claim won’t be in their future this summer – but you can never predict when something will happen. Is your boat insurance policy up to snuff? With the boating season just begun, Boat Owners Association of The United States (BoatUS) suggests boaters do a quick "checkup" on their boat’s insurance policy to ensure they have three important coverages.

1. Consequential damage coverage:

Big, bad things like sinkings, often happen to boats as a result of some small part below the waterline failing. Think cracked rubber outdrive bellows or broken thru-hulls. Check your policy now to ensure it includes consequential damage coverage that pays for losses that often begin with a failed part that may be excluded under the policy. This means the leaky rubber outdrive bellows or broken thru-hull itself may not be covered, but with consequential damage coverage, the rest of the repairs or total loss – your sunken boat – will be (up to the limits you have selected). One caveat: This consequential damage coverage often applies only to major or total losses. It’s typical, for example, to cover the immediate consequential damage resulting from any sinking, fire, explosion, demasting, collision or stranding.

2. Salvage coverage: A windstorm collapses your marina’s shed roof onto your boat. You run hard aground and damage the running gear:

You are now in a salvage situation: The boat is not a total loss and needs to be recovered and brought to a repair facility. Most boaters assume the cost of removing the boat to a safe location is covered by their insurance policy, but some policies will first subtract salvage costs from the insured value of the boat, reducing the funds available to repair the boat, or the amount paid to the boater in the event of a total loss. Or worse yet, some policies pay only a small percentage of that insured value – perhaps just 5 to 10 percent – to pay for salvage costs, again forcing you to pay more out of pocket. Make sure your policy has salvage coverage that is separate but equal to the limit of your boat’s hull-value coverage. For example, a boat with an agreed value of $40,000 should have another separate $40,000 available just for salvage expenses.

3. Hurricane haulout coverage:

For boats in hurricane zones, hurricane haulout coverage is a must. This coverage helps a boat owner make the decision to haul his or her boat before the storm as it helps pay a portion of the labor costs to have a boat hauled, prepared and tied-down by professionals, or moved by a licensed captain. While hauling out in preparation for a storm costs the boater some money, it’s potentially far less than if the boat sustained damage or became a total loss. The BoatUS Marine Insurance Program pays 50 percent of the cost of labor, up to $1,000, to have the boat hauled or moved to the safety of a hurricane hole, and the haulout does not penalize the policyholder.

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