Are you considering buying a sailboat or other type of water vessel? If so, then purchasing marine insurance is just part of the cost of boat ownership. Here are some of the most frequently asked questions about buying boat insurance.

IS BOAT INSURANCE EXPENSIVE?



There are many factors that determine the rate of the insurance premium for marine insurance. These factors can include the type and length of boat, the value of the boat, the type of boat engine, the body of water you’re planning to operate the boat on, and how much insurance coverage you’re going to need.

DOES THE LAW REQUIRE MARINE INSURANCE?



Most states don’t require boat operators to carry insurance coverage while their boat is on the water. If you have a loan for your boat, then your lender will most likely require that you carry a policy as a term of acquiring your boat loan. However, even though it’s not required by law, it just makes sense to carry at least liability coverage on your new investment. Otherwise, in the event of an accident, your other investments (home, stocks, bonds, etc.) become exposed to a liability claim.

WHAT DOES THE TERM ” THIRD PARTY LIABILITY” MEAN?



A “third party” is someone other than the parties on the policy. The parties on the policy are the policy holder and the insurer. A third party could be the lender, a company that might rent a boat for an event, or some other party that’s not directly involved in the issuance of the policy, yet needs to be covered with liability insurance.

IF YOU LOAN OUT YOUR INSURED BOAT, IS THE BORROWER ALSO INSURED UNDER YOUR POLICY?



If the borrower has your permission to use the boat and your boat insurance policy doesn’t have an exclusion for other drivers or users then, yes, the borrower is usually covered under your policy.

CAN BOAT INSURANCE BE PURCHASED ONLINE?



There are several companies offering the purchase of marine insurance through their websites. One of the best ones we’ve found is BoatUS.

AM I REQUIRED TO HAVE INSURANCE IF I HAVE A BOAT LOAN?



Like most large purchases you buy on credit, your lender will probably require that you at least have liability coverage. Since they are also a legal owner of the boat until the debt is satisfied, they are also liable for any damages you cause while using the boat. So, yes they will most likely require that you carry a liability policy and, in many cases, will also require full coverage to minimize their financial risk should damage occur to the boat.

CONCLUSION

You wouldn’t think of taking your sailboat out onto the water without good sails and a good motor. You should consider boat insurance just as necessary. If something happens and you injure someone or damage their property, you will be personally responsible to pay for the damages and/or medical expenses you caused. Unless you can afford to pay that out of pocket, you absolutely must purchase boat insurance to protect yourself. No one ever thinks anything is going to happen to them. But, we know that’s not how reality is. Things happen. And, when they do, make sure you are prepared for it. That will ensure your boating experience will be smooth sailing all the way.

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