Factors To Consider Before Buying Boat And Yacht Insurance

The first thing that you need to do after buying a watercraft is getting it insured by a good company. However, people often get confused between getting a boat or a yacht insurance and have no idea as to what they actually need. If you too find yourself in a similar dilemma, you can use a basic thumb rule to differentiate between the two. A watercraft that is up to 26 feet in length should be covered by boat insurance whereas those more than 26 feet long require yacht insurance for coverage. Once this is sorted, you need to pay attention to a few important details pertaining to your policy features so as to get the best coverage at the best price.

You can select between two types of settlements for your watercraft policy - Agreed Value Settlement and Actual Cash Value Settlement. It is always better for the policy holder to opt for an agreed value settlement, while the insurance provider finds the actual cash value offer much more profitable. Opting for an actual cash value settlement implies that in the event of loss or damage to the vessel, the insurer would offer a settlement on the basis of the asset value at the time of the accident or theft taking place.

Opting for this kind of settlement proves beneficial for the insurance provider as it factors in depreciation to reduce the settlement amount. On the other hand, the insured often ends up with a raw deal as it is quite difficult to assess the right amount of settlement at a given point in time in future. In order to avoid such hassles, it is a much better choice to opt for an Agreed Value Settlement. This way your agent will be contract bound to pay you an agreed sum that is mentioned in the policy. This type of coverage is also known as stated value and offers fuller protection to the boat owner. If you are getting a new boat insured, you should supplement your stated value coverage with replacement cost coverage.

Yet another vital point to consider while taking a boat or yacht insurance is the amount of deductible that will be applicable on the policy. Many boat owners overlook this vital aspect only to regret it later one when a high premium amount plays havoc with their finances. In order to make sure that you get a good deal in this regard, you should compare the deductibles offered on various types of coverage and by different companies. For instance, a hull damage deductible on a yacht is valued at nearly 3 percent while it is lower for a boat. The amount of deductible can also vary depending on the nature of accident that the vessel gets into.

Since these details have an important bearing on your insurance cost, do not commit the mistake of ignoring them. The best way to proceed about this is by starting shopping for quotes from various marine insurers and comparing the same to make an educated decision.