Boat Insurance
The boat insurance is somewhat a combination of the car insurance and the home insurance. In essence, this is what some boats are - the travelling houses. There are different boats. Some are little $15K motorboats, others are exclusive $200K+ yachts. The price of the boat is an important factor to determine the insurance cost. However, there is still more to the boat insurance than just a simple market value of the product.
Boat Insurance Coverage
There are two main types of boat insurance coverages:
- Actual Cash Value
- Agreed Amount Value
The actual cash value is the popular option.
For starters, it is cheaper and makes more economic sense.
The boat insurance, which uses actual cash value, provides coverage for the cost of replacing the boat minus the depreciation value.
In other words, this type of the boat insurance covers the product at its real market value.
The agreed amount value is a boat insurance policy which pays a pre-set fee for the boat.
People choose this option if the boat has unusual modifications, have one of its kind designs or it is an investment for the future.
The boat insurance, which applies the agreed amount value often waves depreciation costs of the product.
However, the agreed amount value is generally more expensive than the actual cash value option.
Unfortunately, the boat is not the only liability in case of accidents and unforeseen problems.
For this reason your boat insurance should also cover:
- Medical payment protection
- Funeral costs
- Contents of the boat
- Towing
The Amount of Boat Insurance Required
This is really a difficult one. Generally, there are not that many boat accidents. Thus, you should aim at the lower-cost insurance but not too low. The liability limits for most boat insurances ranges between $100K to $500K. Most marinas insist on the $300K boat insurance coverage (that is, if you want to keep your yacht there). For the little $15K motor boats, we would recommend the third party insurance.
Boat Insurance Prices
A full, comprehensive boat insurance for a $100K yacht costs around $2K-$2.5K per year. This is based on the actual cash value option with additional coverage of $10 million for personal liabilities. You can choose cheaper options but this will disqualify you from parking your boat in many popular harbours. Most marinas will insist on the full, comprehensive boat insurance.
Boat Insurance for Different Boat Types
As with car insurance and motorcycle insurance, the cost of the boat insurance is also subject to types of the equipment. The boat insurance for fast machines is generally quite costly. Yachts and sail boats are statistically less prone to accidents. For this reason these products are cheaper to insure. Charter boats are expensive to insure. However, this is due to the business application rather than the value of the equipment.