The Difference Between Boat Insurance and Yacht Insurance
There are few experiences more exhilarating, particularly on those hot summer days than taking the boat out for a day on the water. But there’s also no shortage of dangers out there, whether you’re at the lake or in the ocean, which is why it’s vital that you have the proper watercraft insurance. How do you know what type of insurance you should get, especially if your boat is on the large side? Deciding between boat and yacht insurance is actually fairly simple, once you understand boat size classifications.
Different Policies for Boats and Yachts
As a general rule, any watercraft that measures 27 feet or longer is a yacht, while any watercraft that measures 26 feet or shorter is a boat. Common types of boats include the following:
• Speed Boats
• Recreational Fishing Boats
• Antique Boats
You must choose the type of insurance that matches your watercraft. Of the two types of watercraft, yachts tend to operate in larger areas and go on longer trips, which means that they also experience more dangers than boats. Therefore, insurance policies for yachts are typically more extensive than insurance policies for boats.
Boat Insurance
Insurance policies for boats include standard coverage features along with plenty of options that you can add on if you like. You can expect the standard policy to have the following at a minimum:
• Liability Coverage
• Physical Damage Coverage
• Personal Property Coverage
• Towing and Assistance Coverage
Coverage for uninsured or underinsured boaters and fuel spills are less common, but you can usually add them if you want.
Since boats have a more limited range than yachts, it’s normal for these insurance policies to only cover your boat in a certain navigational area or areas. A standard range is 75 miles beyond the coastlines of the United States, Mexico, or Canada. You and your insurance company may also set up an agreed value policy, where both parties decide on a value for the boat in advance. Should the boat end up lost or too damaged for repairs, then the insurance company will pay you that agreed-upon value.
Yacht Insurance
Insurance policies for yachts include all the standard coverages found in your standard watercraft insurance policy, along with several of those optional add-ons, such as coverage for fuel spills and uninsured or underinsured boaters. You can also get additional personal property coverage.
You can add many different custom coverages to your yacht’s insurance policy to fit your specific needs. If you often take long trips on your yacht, you can extend the navigation area or simply create your own custom area. You can obtain coverage for your yacht’s dingy, if it has one. Another option which you may want to consider is hurricane coverage, particularly if you’ll be docking anywhere that has a hurricane risk.
The Value of Your Insurance Policy
Insurance policies on boats and yachts may be either agreed value policies or actual cash value policies. Agreed value policies are more common for yachts, while boats may have either type of policy. There’s a significant difference between how much each type of policy will pay out, and it’s wise to choose an agreed value policy whenever possible.
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What makes an agreed value policy the superior choice? You don’t have to worry about depreciation affecting how much money you receive should your watercraft need replacement parts or if it’s totaled. The policy will pay replacement and repair costs in the event of damage, or the agreed-upon value for a total loss.
An actual cash value policy factors depreciation into how much you get paid in the event of a total loss. That means if you had an older boat with some normal wear and tear, you could end up with a payout much lower than what it actually cost you. You won’t be able to buy a new boat of that style without paying for a portion of it out of pocket.
Agreed value policies are more expensive, but they provide greater protection for your watercraft. The peace of mind you’ll have is worth a slightly more expensive premium.
Is Your Watercraft Covered Under Your Other Insurance Policies?
One common question is whether other types of insurance, such as homeowner’s insurance and auto insurance, also cover your boat. While they do to an extent, it’s a very limited coverage, only applying in specific circumstances.
Homeowner’s insurance will cover damage to your boat while it’s on your property. Once you take it off your property, your homeowner’s insurance doesn’t come into play anymore.
Auto insurance covers your boat while you’re towing it with your vehicle, and it supersedes any insurance policy you have on your boat during that time. However, once your boat isn’t hooked up to your car, there’s no more protection from your auto insurance policy.
Getting the Right Watercraft Insurance Policy
The most important part of insuring your watercraft is choosing the right insurance policy with the coverages you need. Deciding whether you need an insurance policy for a boat or a yacht is a good place to start, but you’ll need to get more specific than that if you want the best protection and the best value.
There are all kinds of insurance policies for different watercraft, including policies specifically for sailboats, houseboats, power boats, fishing boats, and so on. Insurance companies set up each specific policy for the needs of that type of watercraft.
Who Can Pilot Your Boat or Yacht?
The standard insurance policy for a boat or yacht will cover it for anyone you allow to pilot it. This can vary depending on the policy, though. Like you would with anything else you’re not clear about, check your policy to make sure.
Final Thoughts
Figuring out whether you need to purchase boat or yacht insurance isn’t particularly difficult, as you just need to know how long your watercraft is. The trickier part is making sure that the policy you choose has all the coverages you need. Consider how you will be using your watercraft when you decide on different coverages. Above all else, make sure you’re fully protected from anything you could encounter. It’s better to have a policy with too much coverage than too little.
Article originally appeared at: https://pcg.firsttex.com/difference-boat-insurance-yacht-insurance/
