Choose the Right Boat Insurance
Many skippers look upon the experience of filing a boating-related claim with their insurance company as being on par with a root canal. While there’s always pain or hassle preceding a claim, having the right insurance company shortens the duration of aggravation. In my experience, the key to a pain-free encounter depends upon choosing a company that is thoroughly experienced in recreational boating and believes in providing customer service.
A percentage of boaters think it’s smart to insure their boat under their homeowner’s umbrella policy. Premium rates seem reasonable should you have a good record on claims for your house and car, but if your insurance company is a general-purpose operation, it’s likely to consider marine insurance a sideline operation and farm out services.
“Many homeowner policies will have a minimal amount of coverage for really small boats with no engine or a very small engine, like a sailboat,” says Mitch Jawitz, vice president of marketing and distribution at the Hanover Insurance Group. “If you are buying a $10,000.00 to $20,000.00 boat, your homeowner’s policy is not going to cover you for what you need.”
A company not savvy about boats and boaters often plays it conservative when writing its inclusion and exclusion guidelines. An agent may say the insurer only offers coverage for fiberglass hulls, vessels less than five years old, inboard engines, and/or certain sizes.
Choosing an independent insurance agent who is a boater isn’t the solution. They can only steer you to the companies they represent, so ask your would-be agent for each insurer’s history of claims, the percentage of business focused on nautical coverage, and whether your type of vessel is covered.
A marine-centered insurer is usually a better resource, as it employs a knowledgeable staff that may include maritime surveyors, admiralty attorneys, salvage experts, loss adjusters, and marine repair specialists. Ask your marina and fellow boaters for recommendations for such companies. Be specific about asking how they were treated when filing a claim and the length of time it took to receive payment. A claim in May that’s resolved in October ruins the whole boating season!
Once you set your sights on a particular company, ask its representative tough questions about price, coverage, logistics, and how disputes are settled (research done by a consumer group found that arbitration is more likely to result in insurer-favorable decisions).
Demand that your insurer provide a clear definition of how the policy defines or determines total loss of your boat, “by far the biggest bone of contention between owners and insurers,” according to retired surveyor David Pascoe.
If you are financing your boat, the lender will require insurance, thus raising the cost of your premium. If you keep your boat in a location other than your driveway or backyard, the marina or boatyard will likely require liability coverage. Provide your insurer with your marina contract to make sure you’re covered for any contingency excluded by the boatyard.
Ask about liability limits per claim and whether you’re covered if an uninsured boater damages your vessel or harms your passengers. Request to see the exclusions of your specific policy and understand which apply to you. There may be perils you assume or navigational limits you exceed — you don’t want to be caught by surprise at a later date.
Do an online search on your insurer. It’s not foolproof, but multi-site complaints and gripes may indicate that service isn’t a strong point after all. And since the ultimate reason for dealing with an insurer is being reimbursed for loss, check its A. M. Best rating for financial stability.
By William C. Winslow
The author is the Division 5 – Staff Officer Public Affairs, First District Southern Region, for the U.S. Coast Guard Auxiliary, the all-volunteer, non-military arm of the Coast Guard, teaching boating safety education and conducting search and rescue operations. Visit http://cgaux.org/ to join the Auxiliary or for class information.