Boating accidents are unfortunately an all-too-common occurrence
in the United States. To illustrate how widespread this issue is,
consider that according to the U.S. Coast Guard’s 2020
Recreational Boating Statistics Report there were 767 boating
fatalities in 2020, which represented a staggering 25.1 percent
increase from 2019. According to the same report, there were 5,265
total accidents, and the total number of injured victims was
3,191—with both figures also representing a roughly 25
percent increase from the previous year. Add in the fact that
property damage totaled over $62 million, and it becomes clear that
having boating insurance is an absolute must.

And boating insurance is not just needed for accidents. Perhaps
there is a storm that comes through and totals your boat, making it
completely unusable. Or maybe there is a malfunction with one of
its core components and you can’t get your boat to run anymore.
The list of reasons to get boating insurance goes on and on.

However, with boating insurance, a number of questions may
arise. For instance, someone may wonder what insurance covers
boating accidents—and what exactly is covered? Or perhaps you
were impacted by a boating accident and are offered a settlement by
the insurer’s company—should you take it?

How is Boat Insurance Different from Regular Homeowners
Insurance?

For starters, one thing should be clear: homeowner’s
insurance typically does not cover boats. For many boat owners,
this is an unfortunate misconception and is something that can lead
to an expensive headache down the line. Now, it should be noted
that there are some homeowner’s insurance policies that do
offer boat coverage. Yet in those circumstances, the coverage
protecting the boat is quite limited. When it comes to protecting
boats under a homeowner’s policy, there are limits with respect
to both the size and horsepower of the vessel. For instance, the
Insurance Information Institute notes that homeowner insurance
policies will cover only small boats that are under 25 miles per
hour horsepower. For larger and faster vessels, a separate policy
is needed.

For those who are relying on their homeowner’s insurance to
provide protection for their vessel, they should also understand
the extent of their coverage as it relates to accidents. In the
event that someone is in an accident and hurts another person or
causes property damage—and if the vessel is one of the types
of watercraft that can be covered through a home insurance
policy—then the home insurance policy’s liability section
(if they have that coverage) can help cover some potential costs.
The amount will depend on the owner’s policy, however, this
does provide much-needed protection for someone who may be
responsible for another party’s medical bills, lost income, or
property damage. Overall, however, coverage for a vessel through a
homeowner’s insurance policy does tend to be quite limited. In most situations, the ceiling of the
coverage is roughly either $1,000 or a total of ten percent of the
insured value of the policy holder’s home.

What to Do if Your Homeowners Insurance Does Not Cover Your
Boat

If you have a boat and it exceeds the size and speed allowed
under your homeowner’s insurance policy, then it would be
prudent to begin looking for a boat insurance policy that fits your
needs. A number of insurance companies offer boat insurance
policies. Given what could potentially be at stake if something
occurs with your boat, whether it be an accident or damage incurred
from a storm, then boat insurance can go a long way.

Like with a home or a motor vehicle insurance policy, a boat
insurance policy provides the owner of a vessel with coverage for
any potential physical damage that may occur. With a boat insurance
policy, a boat owner can get their boat repaired or replaced if it
suffers damage, whether it occurs due to a collision or through a
storm or any other type of covered event. It should be noted that a policy typically covers the boat,
its trailer and motors, and possibly some personal property that is
kept on the vessel—but it does not cover damage to property
that is not utilized in the typical operation of a boat (for
instance, if someone lost their cell phone as a result of a
collision).

Additionally, through a boat insurance policy, someone can
acquire coverage for themselves in case they are involved in an
accident and cause bodily injury to another party. Just like if a
car was involved, an individual has liability if they cause an
accident that results in an injury. The injured party may have
medical bills that need to be paid and requires ongoing treatment.
The party might also be unable to work and as a result suffering
from a loss of potential income. If the operator of a boat is
deemed responsible for the accident that caused these injuries,
then they may be on the hook for the other party’s expenses and
forced to pay out of pocket. However, with liability coverage, a
boater may be prevented from having to cover those costs.

The Types of Policies

According to the Insurance Information
Institute, there are two types of boat insurance. The first is
actual cash value. With this kind of policy, if there is a complete
loss of the vessel, then materials such as used boat pricing guides
are utilized to determine what the boat’s estimated market
value is at the time. If someone suffers a partial loss, such as an
injury to the motor, then the policy pays for the replacement costs
that are needed and subtracts for depreciation at the time that the
loss occurred.

The other type of boat insurance is agreed amount value. With an
agreed amount value policy, there is a value placed on the boat
that has been agreed upon by both the owner of the boat and the
issuer of the insurance policy. Under an agreed-upon value boat
insurance policy, a complete loss of the vessel would result in
reimbursement of the agreed-upon amount. Additionally, with partial
loss, replacements are paid by the insurer—though unlike with
an actual cash value policy, there is no subtraction for
depreciation.

Insurance companies calculate premiums using multiple factors,
which include the size of a boat, the cost of a boat, and the style
of vessel. When shopping for boating insurance, it is important to
look around to ensure that you are procuring coverage that meets
your specific needs.

What Should I Do if the Other Party’s Insurance Company
Made Me an Offer?

As previously noted, boating accidents are far too common. They
may happen because the operator of a vessel had been drinking and
was operating under the influence. There may be an accident that
occurs because of operator error or due to an equipment
malfunction. With more and more people out on the water than ever,
accidents are on the rise. If you are injured and/or suffer
property damage due to a boating accident, you may be entitled to
financial relief.

In these situations, you will likely receive an offer from the
other party’s insurance carrier—assuming that they have
insurance for their vessel. However, if you receive an offer from
the other party’s insurance carrier, you should consult with an
experienced boat insurance attorney who can provide tailor-made
counsel on the best course of action, helping you navigate your
specific situation.

In general, it is usually a wise move to reject the initial
offer from an opposing party’s insurance company. There is
typically more money that can be made beyond the initial
offer—and that is money that should not be left on the table.
An experienced insurance lawyer can help you understand all of the
aspects that need to be considered in an offer. Were you hurt? Will
you have continuing medical bills and need future treatment? Does
the accident impact your ability to work and make a living? Is your
quality of life impaired? These are some of the key questions a
lawyer can help with so that you and your loved ones are receiving
the most money for your pain and suffering.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.