Basically, the average cost of marine insurance in the United States is in the region of $325-$500 annually — although premiums can reach in excess of $1000 for the more high-performance and high value vessels. In order that an underwriter is able to quote an annual premium, a range of factors are taken into consideration.
If you’re in the planning stages of purchasing a vessel, you should look at obtaining quotations from several different insurance companies in order to establish a ball point mark for the annual cost. If you are able to do this at an early stage it will help with planning the overall budget and you will be more mindful of the type of vessel that you are able to insure.
In many of the US states there aren’t any specific laws which govern the requirement of boat insurance. Yet, it is still highly beneficial for anyone that is likely to own a boat to have a basic appreciation of how it works, and implement the right coverage for your own peace of mind. If you are able to use a motor-driven vessel on a body of water that doesn’t require insurance coverage in place this is often quite a risky move; because if you are found to be at fault in an accident, you are likely to be held responsible for the resulting damages. Elsewhere, if a passenger on board is injured for a variety of reasons, you might well be held responsible and have to cover the related expenses for medical treatment.
What factors influences the boat insurance rates
A wide range of factors come into play when it concerns calculating the annual insurance premium for a luxurious yacht to fish-ready flats boats. In many cases the national average indicated for insurance premiums at $300-$500 per 12-months is likely to be the situation when able to add the vessel to an existing insurance plan, such as the one relating to the house or automobile. In situations where it is likely to be more beneficial to insure on an entirely separate insurance plan; there might be a significant increase in the annual cost — although you will get more wide-ranging coverage in the process.
If you are hoping to include a vessel on an existing insurance plan, you might want to be aware of some of the more standard limitations:
- The length of the craft is limited to 26 feet
- Items such as personal effects are likely to be excluded from the coverage
- Includes protection for issues that might occur on the various bodies of water, such as those relating to a gas spillage
When you are searching the viability of the most cost-effective insurance package for a vessel, then the option of including on a pre-existing policy might well be the best course of action. If you are requiring a more all risks package, you’ll need to search for a specialized marine insurance company that is able to offer the wide-ranging risks that are needed to make sure a vessel is protected at all times, whether onshore or out at sea.
All risks policy or named peril policy
A further influencing factor in the insurance coverage is likely to relate to the type of policy chosen, which might well relate to the all risk policies or the named peril policies. An insurance policy that includes the extra named peril protection is designed to provide that extra level of coverage for the named incidences, such as a full-scale hurricane that has received a given the name. If you are able to limit the insurable features and benefits, this is likely to make sure an insurance policy is kept at a more cost-effective rate.
What is included in a typical boat insurance plan?
A full coverage (also referred to as all risks and comprehensive) insurance plan is able to incorporate wide-ranging coverage, which pretty much includes everything imaginable. All policies will include certain limitations, exclusions and restrictions, but these are likely to be specific to the individual insurance companies. For example excluding coverage for lightning strikes is likely to be a very common exclusion. Basically, an all-risks insurance plan will incorporate such protection as:
- Total loss of the boat
- Damage to the hull
- Loss or damage to the equipment
- Personal injuries
A full coverage insurance policy is quoted at a higher annual premium then the alternative of the liability only coverage and the policies that are written to provide protection in the event of a named peril.
Agreed value or actual cash value policies
In the process of arranging the insurance coverage, you also want to look at the main types of policies offered which relates to the agreed value and actual cash value policies. An actual cash value policy is the more cost-effective of the two options since the pay out in the event of a claim is based on the current market value of the vessel at the time of experiencing the loss. Whereas, the agreed value policy is where the total sum insured of the vessel and equipment is established at the time of taking out insurance policy, and this would be the value that would be claimable in the event of a total loss.
How does the speed of the vessel impact the insurance rates?
A further key area where the insurance rates are impacted relates to the speed and performance capabilities of a vessel. Many insurance companies have a limit on the maximum speed that they will be prepared to insure a vessel; a speed limit of 50 mph is likely to be a good guideline in this regard. If you require a high-powered and performance vessel insured, you will often need to look for a specialized insurance company. Engine placement is also likely to have an influence on the insurance rates quoted by the underwriters. A vessel equipped with an outboard engine is likely to result in a more cost-effective annual premium, mostly due to the fact that it would be easier to extinguish a fire due to its open and accessible nature, whereas it might be more difficult to put a fire out with the inboard machinery.
What is the intended craft use?
How a vessel is used is also likely to have a significant influence on calculating the annual rates for the marine insurance. A flats boat fisherman on inshore bodies of water will pay significantly less than the charter fishing boat that carries paying guests on board.
What steps to take to save on the boat insurance premium?
If you are looking to attract the most competitive insurance rates for your boat and related equipment, you might find that the following have the potential to help:
- Taking and completing a boat safety course
- Having a good credit score and driving record
- Storing the vessel (small trailable boats) in locked and secure premises when left unattended, such as a dedicated boathouse or garage
- Having a full-out of the water survey and valuation report carried out by a marine surveyor
- Having the right level of safety devices on board, like lifeboats, lifejackets, emergency distress items, etc
Comparison shop the insurance market
Lastly, if you are able to put in the time to get quotes from 3 or 4 specialized marine insurance companies, it is likely to be the best way to making certain you are able to attract the most competitive insurance rates in the market. Since there is such a wide array of quality insurance companies, there is no reason why you shouldn’t take the time to get multiple quotes for your boating activities.