You don't own a boat, you own a lifestyle.  Whether you have a small skiff, large yacht, swift Jet Ski or anything in between, you love floating freely on the open water.  Because you care greatly about your boat, ensure that it is properly protected with a boat policy.  As HPM Insurance has been covering boats for decades, here are the top five questions that come up regarding personal watercraft coverage:

1.  Why would I need a separate boat policy?  Isn't it covered under my homeowners insurance?

Not to give a typical insurance answer, but maybe.  If you do not specifically request the boat to be covered on your homeowners policy, coverage is extremely limited for the boat itself.  The limit is typically $1,000 which includes the trailer, furnishings, equipment and outboard engines or motors.  This would barely cover a small dingy.

There are also extreme limitations for the liability coverage stemming from the ownership, maintenance or use of a watercraft on the homeowner policy which is typically based on the length and horsepower of the boat.  These limitations vary on whether you own or are borrowing a boat, so it is recommended that you check with your insurance professional on your specific situation.

A homeowner's policy is designed to insure your home and its contents.  It is not designed to insure the unique risks surrounding owning a boat.

2. Why should I insure my boat if I don't have a loan on it?

Even if you decide you don't need coverage for the boat itself, you can never predict the possible liability arising from owning one.  Think about the following:

• Your mother-in-law slips while getting into your Cabin Cruiser and breaks her hip.
• Your daughter's friend is new to water skiing and runs into a buoy.
• Your best-friend's dog is catapulted into the water on a larger-than-expected wave and breaks his leg.
• Your son misjudges and runs into the marina dock.

The situations are endless and unless you have a boat policy, you would be paying for these damages out of your own pocket.

3. Why would I need to insure my boat in the winter?

Given the long winters in NH everyone, including the insurance companies, realize that you are not using your runabout year round.  The pricing of boat insurance typically has this factored into it, but just because there is less risk does not mean there is no risk.  Consider the following:

• You store your sailboat in a storage facility and the building burns to the ground.
• You winterize and jack-up your Bayliner in your yard in the fall.  Company comes over with small children who thought the pontoon would be a fun place to play.  The boat slips and a child is injured.
• A tree falls on the detached garage where your Bass boat is stored causing significant damage.

Without a boat policy, there would be little to no coverage for these situations.

4. Does boat insurance cover fuel spills?

Coverages do vary by carrier, however, this is a common coverage for most insurance companies insuring boats. We would recommend that you confirm with your insurance agent that this is included given that the boat owner would be responsible by law to have any fuel spill cleaned up.  Some companies, like Safeco, have fuel-spill coverage automatically included on every Safeco boat policy; while other carriers like Progressive, offer it, but separately.  This is a critical coverage given it can be extremely time-consuming and costly to clean up an oil spill, and obviously something you cannot do yourself.

5.  How do I determine how much insurance I need on my boat?

To determine how much coverage you need, you first need to figure out the value of your boat.  If your boat is new, check with the company to see if they will accept a bill of sale.  If you purchased the boat used, think about how much you would have to pay for the boat on the current market.  A good resource is Boat Trader or Boats.com. 

You will then want to consider how you want your boat insured.  The policy can typically be written one of three ways:

• Actual Cash Value (ACV):  That is determined by the replacement cost less depreciation,
• Agreed value: The agreed value is determined by consulting, and
• Replacement cost: This coverage is usually limited to new boats within a few years old, as companies, like Progresssive, offer Total Loss Replacement.

Any permanently attached equipment like fish finders, depth finders, GPS systems etc. should also be considered when determining the watercraft's value.

As far as liability coverage is concerned, you will want to purchase as much as you can afford.  You would hate not to have enough liability coverage if it would have cost you less than $50 to increase your coverage.  If you speak with an insurance professional, they can lay out various options and prices to meet your needs and budget.

Though most states, including NH, do not require boat insurance, such protection can keep you smooth-sailing.  Given how much you put into your boat, be sure it is protected properly.  Happy sailing!

This material is for informational purposes only.  All statements herein are subject to the provision, exclusions and conditions of the applicable policy.  For an actual description of all coverages, terms and conditions, refer to the insurance policy.