It is true that today a large number of homeowner’s and renter’s insurance companies offer limited coverage for small water vessels like sailboats, canoes, and powerboats with a maximum speed of 25 miles/hour. If you’ve a boat coverage added with your home or renter’s policy, the coverage amount probably is 10% of the house’s value or $1,000. Such a coverage usually includes the trailer and motor on top of the boat. Third party liability is usually not included, but can be added for an extra cost.
However, if you own a relatively larger craft, for instance, a yacht, speed boat, fishing boat, or personal luxury watercraft, you need to have separate boat insurance. Your monthly premiums would be determined by your craft’s size, type, value, and the nature of water where you sail with it. And the coverage would include the hull, fittings, machinery, furnishings, and any fixed equipment under an Agreed Amount Value or Actual Cash Value policy.
Agreed Amount Value: Here you and the insurance carrier have an agreed understanding of the actual value of your craft. If there requires a coverage, the insurer will reimburse you the agreed amount. Such kind of policies also replace any broken or decrepit boat parts without any deduction due to depreciation.
Actual Cash Value: Here you and your insurance company agree that the compensation for any loss of your watercraft will be based on its current market value.
However, few physical damages are excluded in this type of policy. These are:
- defective or damaged machinery
- insects
- zebra mussels
- animals
- mold
- normal wear and tear.
- $1,000 for medical expenses
- $500 for theft
- $250 for property damage
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