Understanding Boat and Personal Watercraft Policies
By Sara Mohrbacher, Vice President – WRC Agency
As summer approaches, people start to think about enjoying the great outdoors, including boating. Whether it’s fishing, sailing or jet skiing, WRC Agency is ready to help you help your insureds weather spring on the water.
Boating is fun, but also can be dangerous. Each year there are more than 600 fatalities from boating accidents. According to 2019 U.S. Coast Guard statistics, for accidents where the cause of death was known, 86% of drowning victims in recreational boating accidents were not wearing a life jacket.
If your client owns a boat or personal watercraft (PWC), you should know their unendorsed home insurance policy provides very limited coverage. Most clients would only be reimbursed up to $1,500 (less their deductible) of coverage if damage were caused to the watercraft by:
- Fire
- Wind
- Hail
- Explosions
- Vandalism
- Theft
- Falling objects
Many homeowners policies will allow a watercraft to be added on, but with limitations and for limited coverage.
Personal property
Personal property coverage may also cover some watercraft accessories with up to an additional $1,500 of coverage. If items on a client’s boat are damaged or stolen, they could most likely use their homeowners insurance to file a claim and recoup those losses (after their deductible is applied).
Once your client is provided a deductible to meet, would it make more sense for them to purchase a separate watercraft policy? They would have better coverage, often their deductible would be less and a claim would not go against their home insurance policy.
What does boat insurance cover?
Boat and PWC insurance policies are like auto insurance policies in that you get coverage for the craft itself, its motor(s), trailer and liability coverage. However, boat policies can offer even more.
Few states require proof of boat liability insurance to operate a watercraft. Unlike auto regulations, which generally require proof of insurance to register the vehicle, boats are not subject to state scrutiny. This leaves many people unprotected against negligent acts of an irresponsible uninsured boater.
In addition to the normal set of coverages, a monoline boat or personal watercraft policy can offer:
- Total loss replacement
- Disappearing deductibles
- On-water towing and assistance
- Additional coverage for the lower units of outboard motors, and the upper and lower units of inboard/outboard motors in the event of a mechanical breakdown, including those caused by wear and tear
- Trailer trip interruption coverage: Pays for meals, transportation and lodging if you have a trailer or tow vehicle breakdown or accident while towing your vehicle more than 100 miles from home
- Hurricane haul-out coverage: Reimburses the customer 50% of the cost incurred to haul their boat out due to a named storm
- Replacement cost fishing equipment: Up to $10,000 for tackle, rods and reels
- Replacement cost personal effects: Protects personal items of the insured including camera, clothes, cell phones, etc.
- 24-hour roadside assistance: Covers trailer and tow vehicle
- Wreckage removal coverage: Pays for any attempted raising, removal or destruction of the wreckage
- Fuel spill liability: Coverage for unintentional oil or fuel spills that result in bodily injury or property damage
- Medical payments: Includes coverage for water-skiers
- Pet coverage: Coverage up to $1,000 or $1,500, depending on carrier, for injuries or death of a dog or cat occurring as a result of a covered loss while on the watercraft
- Loss forgiveness
- Guaranteed renewal
Depending on the carrier and the state, the available coverages previously listed may be included or added for an additional cost.
A variety of discounts also may be available for your clients, including:
- Boat safety course/license discount
- Protective device discount
- Multi-policy discount
- Multi-unit discount
- Affinity and alliance discounts
- Paid-in-full discount
- Loss-free renewal discount
- Prior insurance/transfer discount
- Lay-up discount
- Insured age discount
- Advanced quote
- Diesel power
- Homeowners
- Boating experience
- Boat ownership length of time
- Original owner
- Responsible driver
- Small claim forgiveness
- No depreciation on partial losses
- Large accident forgiveness
These discounts vary by state, carrier and percentage. Be sure to ask all the necessary questions so your clients can get the best rate.
Rentals
More clients want to rent their boat to others, either through a website such as boatsetter.com or in addition to an Airbnb rental.
Make sure the clients know their personal watercraft policy will not cover this exposure. If they are participating in boat rental share programs or other rental opportunities, contact WRC Agency so we can put it on the correct policy.
We have several carriers through which we can offer watercraft insurance and we are happy to answer any questions you may have.