Global Courant
Many boaters cover their boat insurance needs by listing the boat on their homeowner’s insurance policy. This may or may not be a good idea!
Having your boat under the “umbrella” coverage of your homeowner’s policy usually provides you with the security and safety of a large liability policy normally associated with a homeowner’s policy. It provides you with a degree of ‘Cross Risk Insurance’ where the risks associated with the boat are so different from those of other homeowners that the likelihood of claims from more than one risk at the same time is very low. If you are in the enviable position of needing to protect very substantial assets, it may be a good idea to have a separate boat owner policy like have the liabilities related to your boat indicated on your homeowner’s policy.
Standard property and casualty (P&C) insurance policies that provide the bulk of homeowner coverage tend to fail to understand a boat owner’s marine issues, values, and considerations. For example, their loss adjusters are usually unaware of the many intricacies of repairing or replacing a damaged or lost boat. Most specifically, they tend not to understand the damage caused as a result of the sinking of a pleasure craft. There can be very serious and costly electrical and mechanical problems as a result of a boat submerging, many of which do not appear for some time after the boat has been dried out, refreshed and returned to service. Electrical contacts can corrode and short out and exacerbate any electrolysis problems in the boat. These are very subtle and not normally understood by experts with no maritime background or experience. Maritime insurers, on the other hand, regularly deal with boat issues and their experts are aware of the issues and values of the boat trade. Many marine insurers use the services of marine appraisers to adjust their claims. They are true professionals dedicated to the marine industry and serving the boat owner well.
In my experience as a port operator, there have been several occasions when for one reason or another one of our clients’ boats was damaged or sunk by collision, carelessness or nature. Forgetting to plug in before starting up was number one on the list. Sometimes a customer would leave his/her boat tied to a dock with no cover and if enough rain got into the boat to run the bilge pump long enough to drain the battery, the boat would fill up and sink. When the P&C insurance claims adjuster comes to look, they will only see the water damage to the upholstery etc. and appraise the lost or damaged cosmetic items. We were never able to convince them of the hidden electrical, mechanical and fuel system damage, and there were often months of bitter disputes between the boat owner and the insurance company before coming to a conclusion.
Conversely, when a marine insurer’s loss adjuster would come to assess the damage, they would first evaluate the systemic electrical and mechanical issues and often empower us to perform the comprehensive electrical system diagnosis, hull evaluation, and mechanical item replacement (all fluids, filters, anodes, etc.) on the spot. We have never known of a dispute between the boat owner and the marine insurer.
Another issue that few people think about is the insurance of the boat while it is stored and not operational. Most people assume that the insurance of the marina or boat shed will cover their boat while it is parked there. That is only partly true. If the marina operator were to drop your boat or otherwise cause damage through negligence, their liability insurance would certainly cover it. On the other hand, if a hurricane, fire, flood or other natural disaster were to damage the boat while it was in storage, the boat owner’s insurance would be responsible. Many boat owners who lost their boats when Hurricane Katrina swept through the Gulf of Mexico were very surprised to learn that the marina’s insurance did not cover their boats. Many were a total uninsured loss.
Some marine insurers even offer a discounted rate for times of long term storage rather than assuming the boat will be used all year round. Often a boat is actually only used for 5-6 months a year during the summer season and then sits in a marina or garage for the rest of the year. You can check with your marine insurer if they offer a reporting system where you can report the boat in a storage condition and receive a reduction in your liability rate and premium as a result.
Be sure to research the cost and coverage of boat insurance offered by marine insurers and compare it to that of your homeowner before signing up. Be sure to inquire about the marine qualifications of the adjusters used by the carrier. This is critical if you have a claim.
As with most things, it pays to do your homework!
Boat insurance vs. home owner insurance coverage
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