Do I Need To Have Boat Insurance
Though boat insurance is not required in every state, you shouldnt go without it in most cases. If you end up in an accident or stranded out in the ocean somewhere, youll be glad you have it.
Its recommended that you obtain boat insurance if you own one of the following types of boats:
- Personal watercraft
Conversely, if youre just using a canoe, a small-engine boat, or an inexpensive boat worth less than $1,000, you may not need boat insurance.
What Should I Look For When Shopping For Boat Insurance
There are many factors to consider when shopping for boat insurance. For starters, youll need to decide if you want a policy that uses an agreed value policy or an actual cash value policy. ACV policies are typically cheaper, but they provide less payout in the event of a total loss.
Furthermore, youll want to look for exclusions and restrictions to boat coverage. For example, some companies will only insure boats up to a certain size, whereas others will not insure boats used for commercial purposes. Knowing the specifics of your boat and what youll use it for can really help you find the best policy to fit your needs.
Once you find several companies that will cover your boat, read the entire list of standard coverage inclusions and compare. Where one company may offer towing as a standard feature, another company may only offer it if you pay an extra monthly fee. Noting these small differences could really save you money.
Finally, consider a companys reputation and the attention it gives to its boat insurance. Some specialty insurance companies focus solely on coverage for boats and other recreational vehicles, while other companies just offer boat insurance as an extra to attract more customers. Noting this can help you get the best coverage from experts who know what theyre doing when it comes to boats.
Hanham Insurance Agency Hugo Hanham Gross
Hanham Insurance Agency is a popular, independent insurance agency based in Charleston, South Carolina. This agency specializes in US and international yacht owners and writes with the carriers listed in the below insurance review as well as others not listed. Hanham accommodates a range of boat sizes but specializes policies for in boats in the 35 90 ft range.
The owner and broker in charge, Hugo, began working for Lloyds of London, tailoring policies for superyachts, some of which were worth over $200M+. Hugo says he now prefers to work with owners of smaller yachts because he enjoys the client relationships more on smaller yachts.
From my personal observations and feedback I have heard from Hanham clients, this small sized insurance brokerage is an excellent choice for people who value professional and attentive client service as well as an insurance policy or multiple quotes that are tailored specifically for your needs.
In general, the benefit to a smaller customer-service driven agency is the attention that your policy receives. Ive learned that Hugo and his team are devoted to their clients, are always quick to respond, and are actually willing to take time to help and explain things to people.
Update 09/2019: We recently heard of an owner of a 57 motor boat who was caught in the current and hit a coral head in the Bahamas. Hanham held their hand their hand through the claims process and the owner told us that Hugo at Hanham is my broker for life
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How Much Does A Boat Cost
Boats vary depending on the type. You can expect to pay anything from $25,000 for a new motorboat to well over $1 million for a new yacht. Used models can go for even less.
Other expenses to consider
The boat itself is one of several costs that come with boat ownership. These include:
- Equipment. Consider the costs of decking out your boat. Electronics, water toys, accessories and safety equipment could set you back $1,500 or more.
- Operating costs. This cost will vary by the type of boat you choose and how you use it. However, the price of fuel should be a big part of your budget.
- Boat maintenance. All boats need regular maintenance to remain safe. Costs vary depending on your boats age, model and your mechanic.
- Storage. Mooring fees are calculated by the length of your boat and if you store it in an expensive area.
- Boat insurance. Depending on the type of boat you have and where you store it, boat insurance can cost you $100 or more every year.
How You Store Your Boat
How and where you store your boat also impacts the rate of premium. Insurance companies will analyze the location and the security measures youve implemented while storing your boat. You can expect to pay lower rates if youve taken the necessary storage safety measures.
Some of the states with the lowest annual boat insurance cost average are:
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What Is Bundling Home And Auto Insurance
The combined cost of home and car insurance can be heavy on the wallet. But when you own a vehicle as well as a house, one of the best ways to save on insurance premiums is by taking advantage of multi-policy discounts, also known as home and auto insurance bundles.
State Farm claims that policyholders can save up to 17% on their premiums by bundling their car and home insurance. Additionally, Nationwide and Allstate offer a multi-policy discount of up to 20% and 25%, respectively, to policyholders who bundle their home and auto insurance policies with them.
Although bundling renters and auto insurance doesnt yield as high of a discount, companies like Progressive offer a 4% discount on car insurance premiums when bundling auto and renters insurance. However, renters insurance is much less expensive than homeowners insurance, averaging $179 a year, according to the Insurance Information Institute, or $15 a month. Despite this, bundling renters and auto insurance can still be an easy way to save on monthly insurance premiums.
How To Finance Your Boat
Before you hit the dealership to find your dream boat,consider how youre going to pay for this major purchase. While some companiesmay offer dealer financing, they wont necessarily give you the best rate.Exploring your options in advance puts you in a better place to negotiate andalso ensures youre not paying any more than you need to. Its always better tohave more options than none plus, well tell you how to keep your credit scorein tact while comparing your boat financing options.
The most obvious option to finance your boat is with a boatloan. Specialized lenders use this product to help borrowers fund their boatpurchase. The boat is used as the collateral for the loan. So while its notentirely unsecured, youre not having to put up any existing assets as thecollateral. Its very similar to the way a car loan works. If you default onthe loan, the lender would repossess the boat in order to take care of theamount owed on the loan.
Like any other loan, your interest rate depends on yourcredit score. If you have lower credit, youll receive higher interest rates,making your monthly payments higher. Your required down payment may alsofluctuate depending on the lender and your credit. When taking out a boat loan,your down payment could range anywhere between 10% and 25% of the purchaseamount.
Using an unsecured personal loan to finance your boat may come with higher interest rates, but lowers your personal risk.
Home Equity Loan
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How Much Can I Borrow
How much you can borrow generally depends on the price of your boat. Typically, you can fund 90% to 100% of the value of your boat. Minimum loan amounts can start anywhere from $2,000 to $15,000, depending on the lender.
Dont forget the down payment
Like car loans and mortgages, boat loans often require a down payment. Generally, youre required to cover at least 10% of the cost. But lenders tend to favor applicants that can front at least 20% of the boats cost. To avoid over-borrowing, we recommend saving up as much as you can for a down payment so you dont need to borrow as much. The less you borrow, the less interest youll pay.
Remember: Boats are more like cars than houses. Once you make a purchase, your vessel will begin to depreciate. If you borrow a large amount with a lengthy term, you may end up paying more in the long run than its really worth.
Type Of Insurance Companies
Before purchasing a policy, you should first ask yourself if you want to buy from a company that sells multiple types of insurance or one that specializes in boat insurance. Both have their advantages.
- Large insurance companies: Larger insurers that offer more than boat insurance can usually keep expenses down and thus offer lower rates, especially if you already have a policy with that company.
- Companies that specialize in boat and marine insurance usually have an intimate understanding of the boating world. They often have extra resources or membership perks for consumers.
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Shopping For Boat Insurance
Start with a little fact-finding. Ask your boating friends which company they use and how their claims have been handled. The way an insurer has handled claims in the past is a good indicator of the quality of service you can expect in the future.
State insurance regulatory agencies are also a good reference and can be found online.
Nationwide: Best For Policy Bundling
Multi-policy discount for those who bundle boat insurance and at least one other policy with Nationwide
Boat insurance packages to help customers save money
No online quote tool for boat insurance
Not all coverages and discounts available in all states
Nationwide offers lots of options for boat insurance coverage, including:
- Bodily injury and property damage liability
- Collision coverage
- Roadside assistance
- On-water boat towing and labor
- Fishing equipment insurance
- Personal effects insurance
Furthermore, there may be additional savings on your boat insurance when you select one of Nationwides boat insurance packages. The company offers a wide range of packages for different types of boaters, such as:
- Weekenders For those who simply take gear onto their boat and remove it when theyre done, Nationwide offers an affordable package that includes up to $1,000 for fishing equipment, $3,000 for personal effects, and $500 for towing.
- Overnighters For those who take short boating trips, Nationwide offers up to $2,500 for fishing equipment, $5,000 for personal effects, and $2,500 for towing.
- Light Tackle Anglers For customers who own a bass boat or smaller fishing boat, Nationwide offers up to $5,000 for fishing equipment, $2,000 for personal effects, and $2,500 for towing.
- Deep Water Pros For those who fish big waters, gulfs, bays, and oceans, Nationwide offers up to $10,000 for fishing equipment, $5,000 for personal effects, and $2,500 for towing.
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Boat Insurance Coverage From Erie Insurance
When something unexpected happens to your boat, ERIE offers coverage1 for:
Physical damage to your boat and boating equipment as well as the trailer or outboard motor, if its included in your policy. So if your boat is vandalized or it hits another boat, a rock, a log or a marine obstacle, insurance can help cover the damages.
Liability for injuries to other people or harm to property.
Medical costs for injuries to you, your family members and others.
With ERIEs boat insurance coverage, weve also built in extras, such as coverage1 for:
- Emergency services, including towing to the nearest marina if your boat motor breaks down, when youre stranded on the water2 or run out of fuel, oil or battery life.3
- Certain personal effects in or on the boat, such as clothing or fishing equipment.4
- Fire extinguisher recharge or replacement after its used to fight a covered fire.5
How To Bundle Your Home And Auto Insurance
If you have never tried bundling insurance policies in the past, you may imagine the process to be complicated. On the contrary, bundling insurance policies through your current or new provider is a straightforward process. Here is how you can bundle your policies:
Also Check: Capital One Boat Loan
Boat Insurance Cost Factors
Many factors are used to set the cost of a policy, and they vary among insurers. Here are some items to consider:
- Cruising Area: Where you boat.
- Boating Safety Education: If you have been formally trained or certified.
- Good Driving Records: Both boating and driving.
- Liability Limits: The higher the limit the higher the cost.
- Deductible: The higher the deductible the lower the premium.
- Towing insurance requirements for offshore fishing .
Our Top Picks For Boat Insurance
- Progressive Best for Policy Discounts
- BoatUs Best for Membership Benefits
- Foremost Best insurance packages
- Wreckage removal and fuel spill cleanup included
- Accident forgiveness and disappearing deductibles
- Coverage limitations for expensive watercraft, and for big boats in hurricane-prone states
Not every insurer includes in its standard coverage the removal of your boat if it is wrecked and damage from fuel spills. Progressive is among those that do, but there are limitations. Wreckage removal is covered only when it is deemed to be legally necessary, and fuel spills only to the limits of your liability coverage.
Progressive boat insurance policies include accident forgiveness which keeps rates from increasing if your claims are for $500 or less. Boaters whove been Progressive customers for at least four years and remained accident-free for three are exempt from rate increase for any boat accident, regardless of the claim amount.
For an additional cost, you may include a disappearing deductibles policy that deducts 25% from your deductible amount for every claim-free period on your boat policy until it reaches zero.
But Progressive has more limitations than some insurers on the vessels they will insure, and where they will do so. Personal watercraft worth more than $27,000 are not covered. In hurricane-prone states, insurance is not available for boats over 35 feet in length or that are worth more than $175,000.
Additional coverage options:
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Best Overall Boat Insurance: Boatus
BoatUS and GEICO have teamed up to bring you boat insurance policies that serviced by boating experts and backed by the nations 2nd largest auto insurance company. Choose from agreed hull value, ACV or liability-only coverage with add-ons like dock contract liability, fishing guide coverage and ice and freezing repair.
Become a member to find support to fit your needs. You can choose from membership options that range from Basic at just $24 per year to Unlimited Gold Towing for $175 per year.
It also provides Unlimited Freshwater and Unlimited Salt Water Towing coverages. Both offer 50% cost coverage for dock-to-dock tows for repairs. Freshwater coverage starts at $85 per year, while Saltwater begins at $159 each year.
Progressive: Best For Cheap Boat Insurance
Rates as low as $100 per year
Wide array of coverage
Restrictions on types of boats covered
As expected from one of the industry leaders in personal property insurance, Progressive offers all of the major coverage and more, including:
- Bodily injury and property damage liability
- Comprehensive coverage
- Propulsion Plus mechanical breakdown coverage
- Sign & Glide on-water towing
- Fishing equipment or carry-on items
- Water sports injury coverage
- Fuel spills and wreckage removal
- Roadside assistance and trip interruption
- Full replacement cost
You can potentially save even more with Progressive by qualifying for some of the following discounts:
- Advanced Quote Discount For those who obtain a quote and sign up for coverage at least 24 hours before you want it to go into effect
- Transfer Discount For those who move their boat to Progressive from another company
- Multiple Policy Discount For those who maintain multiple types of insurance with Progressive
- Multi-boat Discount For those who insure more than one vessel
- Association Discounts For those who are members of the United States Coast Guard Auxiliary, United States Power Squadron, or USAA
- Original Owner Discount If youre the original owner of your boat
- Responsible Driver Discount For boaters who remain accident-free on the water for at least three years
- Prompt Payment Discount Automatically discounted so long as you pay on time
- Pay-in-Full Discount For paying your entire premium upfront
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Best For Professional Fishermen: Markel
- No. of Policy Types: One custom policy
- Coverage Limit: Contact for details
- Price: $100+/year
Policies tailored to your boating needs
Free online quotes
Need to contact company for policy details
Website could be updated
Not as well-known as other providers
The Markel Corporation is a specialty insurance company that offers specialized coverage for boats. They have an A rating from A.M. Best and an A+ rating from the Better Business Bureau. The company has been in business since 1930 and offers comprehensive boat insurance policies for boats and personal watercraft . The Markel policy has an option to add coverage if youre a professional fisherman which provides replacement cost coverage for a preset agreed upon value of fishing equipment. Several discounts are available including an accident-free discount, operator over age 40 discount, and an experienced boater discount for boaters who have five years or more of boating experience. If you happen to qualify for all of the discounts available through Markel, you could save up to 35% on your boat insurance premium. Extra features also come standard without having to pay an additional premium.