5 Common Insurance Mistakes That Can Sink Boaters

There are five common mistakes that many boat and yacht owners make with their insurance coverage. Whether they believe they do not need insurance because they own their boat, or because the boat isn’t physically in the water during the off-season, there are widespread misconceptions about when boat and yacht insurance coverage is necessary. The fact of the matter is anyone who is boating should have some type of coverage to protect themselves financially for the long term.

The common misconceptions about boat insurance are coupled with the fact that many consumers are looking at ways to reduce costs because of the current economic conditions. There is no doubt that many boaters have a close eye on the total cost of owning their boat, and insurance premiums are a part of that expense.

Helping customers avoid these most frequent mistakes will help agents keep boaters on a course towards getting the best value and protection.

1. Dropping Coverage: Clients sometimes believe it’s a good idea to drop insurance coverage when their boat is paid off. But boat insurance covers more than just the vessel — it provides coverage for things like personal injuries, environmental cleanup and liability issues that could occur while out on the water. If something major happens, the vessel owner could incur significant out of pocket expense immediately and potentially well into the future. Boating without any insurance coverage creates a large financial exposure that could ruin any family’s finances.

2. Picking on Price: As wallets tighten, insurance clients are more tempted than ever to shop for coverage base on price alone. But paying a little more for a policy could bring significant added-value to customers. For example, paying less for insurance could mean a lower policy limit and less coverage. It is also important to fit customers with a boat insurance policy from a carrier that has strong financial ratings.

3. Reducing Liability: Clients sometimes opt to lower their liability or other limits to save on monthly premium costs. Agents should help boaters identify the amount of coverage they need to protect other personal assets. It doesn’t make sense for them to have too much coverage, and by helping them avoid having too little, you are looking out for their best interests.

4. Unaffordable Deductibles: As with any insurance product, it’s a mistake for clients to choose deductibles they can’t afford. Choosing a higher deductible may be a good way for customers to save on monthly premium costs. However, make sure they choose a deductible they can afford in the event of a claim.

5. Off-Season Cancellations: Many boat and yacht owner will intentionally cancel their coverage during the off-season. This overlooks many risks that could damage the boat when it’s not in the water. Dropping coverage could leave the boat owner exposed if the boat is damaged in a fire at the storage facility or if a tree crushes the boat parked in the driveway thanks to a winter ice storm.

What many boat owners may not realize is that their boat insurance coverage protects them from a lot more than just damage to their own boat as mentioned in the first most common mistake. For example, back injuries are one of the most common boating injury claims and treatment costs can easily exceed tens of thousands of dollars. Without sufficient insurance coverage, the vessel owner may have to shoulder the financial burden from medical bills to treat injuries suffered onboard their boat. What’s more, the costs to repair and replace damaged property or clean up large fuel spills could be significant in the event of a collision.

If boaters are eliminating or reducing coverage as a way to cut costs, now’s a time to prove the value an independent agent brings to the table. Making sure boaters have the right coverage in today’s market is a key part of an individual’s long-term financial security. Insurance is there to protect a family’s financial position, and changing the policy to find a way to save money in the short-term should only be done with careful consideration and guidance.

There are ways to save on insurance costs, but lowering policy limits and raising deductibles to amounts that couldn’t be afforded with other monthly expenses could be dangerous. One example of a right way to save is taking a boating safety class to be eligible for safety credits. Also, updating deductibles can be a good way to save as long as they are affordable should something go wrong.

Insurance carriers all have discounts, so it’s important to make sure the appropriate discounts or credits are being applied. Finally, having all personal insurance policies with the same carrier will often yield a significant cost benefit.

Boating is an activity that alleviates stress from people’s lives. The last thing a boater wants to think about is what would happen to their finances if something went horribly wrong.