3 ways marine insurance differs from auto

Marine and auto insurance policies share many characteristics, providing coverage for collision, theft, vandalism, and more; however, there are a few ways they differ.

Here are three common differences.

1. Ability to suspend coverage

An insurance policy for your boat will usually give you the option to “lay up,” or temporarily suspend coverage or parts of your coverage. This applies during the offseason when the boat is in storage.

This is helpful because you don’t have to pay for coverage like liability or collision while you aren’t using the vessel but you probably still want to be protected for theft or vandalism.

Boat owners should be aware of the dates that coverage is suspended. If you end up taking your boat out on a rare sunny day in January and something happens, your insurance company may not cover you.

2. “Agreed value”

Most auto insurance policies offer the choice between cash or replacement value.

Cash value takes into account depreciation and the vehicle’s age, condition, and mileage to determine the settlement amount for the vehicle. Replacement value is the cost of buying a new vehicle and is therefore a higher payout. Of course, as replacement value is higher it entails paying higher premiums on your policy.

A marine policy offers another option, which is similar to those available for classic cars. This is called the “agreed value.” The insurance company and the insured will agree upon the value of the boat upfront when the policy is first written. If anything happens, that’s the amount the insurance company pays.

3. Navigational limits

Most auto policies cover your vehicle inside the United States and sometimes Canada, but usually exclude Mexico. Marine insurance policies are similar but slightly different. Small boats up to 26 feet are typically covered in inland or coastal waters inside the United States and Canada. For larger boats, the territories that are covered are usually outlined specifically in the policy.

It is important for boat owners to be aware of where their coverage does and does not apply, and stick to these waters. If you want to travel outside these areas, most insurance companies do provide the option for temporary additional coverage.

To learn more about marine insurance and find out policy is right for you, talk to a specialist agent like the ones at John B. Wright Insurance. Contact us here.