If you recently purchased your first boat, you may be under the wrong impression that your homeowners insurance will cover your watercraft. In most cases, it won't. Many home insurance policies have a minimal amount of coverage for very small boats with either no engine or a very small engine, like a canoe. What this means is that more likely than not, your watercraft requires its own boat insurance policy.
Why is boat insurance different from home or auto insurance?
In some ways, boat insurance is a combination of home and auto insurance. For instance, a boat policy covers you for liability if somebody gets injured on your boat, similar to home insurance. If your boat were to inflict any bodily injuries or damage on people, property or other boats, the coverage works similar to auto insurance.
One way a boat policy differs from a home or auto insurance policy is the option to suspend or “lay up” coverage for specified periods when you're not using your boat, such as during winter. However, it’s prudent to consider some level of coverage during these times because weather damage, theft and vandalism can occur at any time.
Agreed value vs. market value policies
A boat, like a car, depreciates in value the moment you take it out of the lot. To help boaters save money, insurers offer the option of agreed value versus market value.
With agreed value, you’ll agree with your insurance company upfront regarding the value of your boat. If anything happens to your boat, such as weather damage or an accident, the agreed value is the amount for which you’ll be covered.
On the other hand, market value covers any damage to your boat based on its current value, which includes deprecation. Any payout you receive for a totaled boat probably will not be enough to buy a new boat as a replacement.
Typically, new boat owners go with agreed value. But as the value depreciates over time, they may switch to cash or market value.
Learn more today
Our agents can personally assess your watercraft and search for the best coverage on your behalf. It’s our goal to offer you exceptional protection at lower prices.
Are you covered? Call Texas Insurance Agency at (713) 675-2626 for more information on Houston boat insurance.