Sailboat insurance is sold under the classification of “pleasure boat insurance.” Because sailboats are neither high-speed, nor are they heavy, and have little potential to cause large amounts of damage when compared to high-powered, high-speed watercraft, their classification as a “pleasure boat” provides for lower premiums on basic coverage.
Depending on state and local requirements for your boating insurance needs, a homeowners policy may adequately cover your sailboat against loss. Most homeowners policies include the option of additional riders on a policy, which can be written to include the theft, damage, or total loss of your sailboat. However, keep in mind that there will be little protection for medical risks (health insurance policies may or may not consider boating to be a high risk sport) and zero protection for general liability, damages, or harm claimed by others.
Calculating Your Risks
All things considered, there are a few perils that present the most risk to your person, your finances, and your boat. First, you assume risk of loss when using your sailboat. Also, risk of injury is assumed with boating as well as the risk of damaging other people or property, and other general liability. Protecting against each of these perils is made easier with the use of a proper boating insurance policy.
To protect against damages to your own boat, you might purchase an “all risk” policy that protects your boat against loss from any and all potential perils. The thoroughness of the policy, however, means higher premiums, and to reduce costs many boat owners instead include only “named perils” which means the boat is protected against only those dangers listed on the policy. These typically include damages related to weather including wind, hail, lightning, rain or fire. Also popular items are theft, vandalism, and collision with other boaters, docks, buoys or debris floating in the water.
While total loss might be paired in with damages, it is important to decide how a total loss would be paid out. Agree value, for example, is a contracted policy between boat owner and insurance company where upon a total loss of your boat, a cash payment is made in the amount of the agreed value. This value is determined at start of the contract, and is generally kept as a flat rate until the end of the policy term. As the boat loses value, however, the insurance company may ask at the time of renewal that the agreed value be reduced to a value more in line with the present value of your sailboat.
Actual cash value is completely different. With an actual cash value policy, the current market value at the time of total loss is calculated then delivered to the boat owner. This policy is less expensive, as the cash value drops as time goes on. However, with such policies, a boat owner runs the risk that the actual cash value as determined by the insurance company is significantly lower than what they owner had expected.
Personal Property Coverage
Insurance for personal property is intended to cover all additional property on the boat that is not permanently attached. This may include cameras or tourist items, or even your fishing and diving gear. Protection for these possessions is important because unless specifically noted on the policy, coverage is limited only to the vessel itself, not to the property stored inside, or on top of the boat.
Very much like an automobile, bodily injury covers damages and medical expenses of those who are not riding in your vessel. This may be other boaters, people on docks or in the water, and may also be contracted to include the persons in your vessel.
This last item is critically important for boats stored and operated within ecologically important or protected areas. A liability rider provides protection against all other risks, most commonly the costs of cleaning up gasoline or oil spills, or for damages assessed by authorities for violations or other claims. The cost of additional liability coverage varies greatly from person to person, boat to boat, and from one geographical area to the next.
Be sure to stipulate the length of time you plan to be on the water, and buy insurance that is appropriate for your needs. Many insurance companies write policies specifically for infrequently used vessels and will extend coverage for a period of less than one year, if desired. As always, refer to local laws and regulations and ensure that your boat, your person, and your medical needs are, at a minimum, insured at a level consistent with local requirements.