Few Things Are Better Than A Day At The Lake Before you head out, make sure you have the proper coverage.

While insurance for watercraft is not mandatory in many states and/or lakes, it is still very critical to at least include liability protection.

Judgments for accidents may be just as high as a high speed car accident. Contributing to high judgment awards are factors such as excessive speed, alcohol use, inexperienced operators, failure to obey Maritime laws and neglecting proper safety equipment. The lack of a requirement to carry insurance does not change the fact that you will still be held responsible for your actions. However, the presence of proper insurance will act as your financial backing and help pay expenses for which you become legally liable.

Here are a few important coverages to consider:

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Emergency Towing

This coverage usually is inexpensive and covers you with any towing company. BoatUS coverage is very good but if they are not available, you should keep a backup coverage.

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Hull Coverage

1. Agreed Value

This is the most desired coverage that is a set amount as stated on the declaration page of your policy. This type of coverage guarantees that if your vessel is a total loss you will be paid the amount listed as hull coverage.

Note: If there is partial loss depreciation it will still be taken by the insurance company. This coverage is usually more expensive than the other types of coverage but is well worth the expense when you have an older vessel in today’s marketplace as it takes the guesswork out of a claim and also any subjective offers to settle the claim.

2. Actual Cash Value

This coverage is based on the marketplace at the time of loss. Each company uses different methods to arrive at a settlement offer. Some use comparables, others use book values. Some use a mixture of the two. It is impossible to know what they will offer and therefore adds to the anxiety of the claim process. An example of this would be today’s values on vessels. We all know that this is a buyers market. The price you paid for your vessel 2 years ago is most likely much higher than what the value is today. If you still owe on you vessel the claim value may not even pay off the loan. This can also work in your favor if the above situation were reversed.

3. Stated Amount

This coverage is the most misunderstood of all coverage’s whether it is boat insurance or auto insurance. A stated value policy more closely resembles an actual cash value policy except that the value stated is the very most the company is on the hook for.

Example: You find a great deal and purchase a boat for $80,000 so you purchase stated amount coverage in the amount of $80,000. The boat is actually worth $100,000 at the time loss. Unfortunately, you will only be paid the $80,000.00. With an actual cash value policy you would have been paid the full amount of $100,000.00. We all hope that the vessel we purchased is worth more that we paid for it, right? This has happened. Now, let’s say the ACV is only $60,000. You will only be paid $60,000. The stated amount on the policy is only a cap, not an agreed value.

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Personal Effects

Personal Effect is most like the contents coverage you have on your home policy. Keep in mind that everything that came with your boat or is attached permanently to your boat is covered under hull coverage, i.e.: carpet, cabinets, and appliances, etc. Much of what you have on board is also covered by you home insurance through your contents coverage away from home clause. Most policies automatically cover 10% of your contents coverage away from premises. You only need to carry a minimal amount of personal property coverage to cover what is kept on the boat at all times.

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Pollution Liability

In today’s society this coverage is a must. With the EPA and Coast Guard keeping an eye on all waters even a very small spill has the potential to cost the owner of a boat a lot of money. If your vessel should sink, you are responsible for the pollution caused by the release of gas and oil from the engines and tanks. Many of the older policies and policies provided by non-yacht companies do not provide this coverage. Check with your agent.

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Protection And Indemnity (Liability)

This coverage is one of, if not the most important coverage you can have. While a fixed loss, (the loss of your boat) will hurt you, a liability suit can have a permanent impact on your future. Nobody should have less that $1,000,000 coverage, the premiums are low and the coverage is immense. This coverage will provide you legal expense and in the event that you lose, will pay up to the limits of the policy. This is great for peace of mind.

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Uninsured and Underinsured Boater

Same as the coverage on your auto policy. This coverage will kick in if you or your vessel is struck by an uninsured or underinsured boater and you are injured. This coverage only pays for bodily injury, not for repair of your vessel, therefore you must keep hull coverage on you vessel.