JET SKI INSURANCE & BOAT INSURANCE

You insure you health, home, car, and even your life. And if you own a water vessel, you should insure it too.

Buying insurance can be a daunting task. There are various aspects to purchasing boat and jet ski insurance coverage, and the only thing worse than overpaying is to be left hanging dry with a policy that won't offer the protection you need when you need it. To help, Jet-Ski-Now.com has put together this page to assist you in figuring out boat and jet ski insurance coverage lingo.

When purchasing boat and jet ski insurance, there are some basic coverage’s you should look for. These include physical damage coverage, personal effects coverage, liability, medical payments, uninsured boat owners coverage, and commercial towing and assistance. The concepts are similar to automobile insurance except that you are dealing with a watercraft and the special circumstances it presents.

Physical Damage Coverage provides broad coverage to repair damage or destruction incurred by a covered peril such a vandalism, theft, windstorm, lightning, fire, and of course collision. Physical Damage coverage is usually subject to a deductible. The higher the deductible, the lower your insurance premium will be. Physical Damage Coverage is either offered on an Actual Cash Value (ACV) or an Agreed Amount Value basis.

Actual Cash Value (ACV) policies pay for replacement costs but factors in the amount of depreciation that has occurred at the time of the loss. For a partial loss, you would look at the cost of the repair and deduct a percentage for depreciation. If there is a total loss, the market value of your vessel is determined with the aide of used boat pricing guides and other such similar resources.

As an example, say you have a collision and it will cost $6000 to repair your water vehicle. The insurance company computes that the depreciation that has occurred at the time of the accident is $2000. Say you also have a $500 deductible. With an Actual Cash Value (ACV) policy, you will be paid $3500 for the $6000 repair. That is:

  $6000 in damage (the cost to repair the vehicle)
- $2000 in depreciation
- $ 500 deductible
_______________________________
  $3500 insurance payment

So in this example, the cost out of pocket to you for the $6000 repair would be $2500.

With Agreed Amount Value polices, the insurance company and you agree to the value of your vessel. Agreed Amount Value policies differ from Actual Cash Value policies in that there is no deduction for depreciation. In the event of a partial loss, old items are replaced with new items. If there is a total loss, you will be paid the amount you agreed the vessel was worth.

So to go back to our example above, you have a collision and it will cost $6000 to repair your water vehicle. In this example, you have a $500 deductible. With a Agreed Amount Value policy, you will be paid $5500 for the repair. That is:

  $6000 in damage (the cost to repair the vehicle)
- $ 0 in depreciation
- $ 500 deductible
_______________________________
  $5500 insurance payment

A good policy will include Personal Effects Coverage. Personal Effects Coverage insures items on your water vehicle that are not used for its normal operation. However, they can prove a financial loss in the event of such things as accident or theft. Examples of items that would be included under Personal Effects Coverage include radios and cellular phones.

One of the most important aspects of an insurance policy is Liability. Liability protection shields you financially if you are the one that is legally responsible for damage to property or injury to a person other than yourself or a family member. If you are the one at fault and there is damage due to your negligence, you can be sued. Liability protects you from financial ruin in such an instance. Coverage is typically offered from $100,000 up to $1 million dollars. This is one area you want to make sure you have adequate coverage. Liability can be extreme. For example if you hit another vessel and are at fault, you are responsible for the damage to property and bodily injury. Then, if debris from the accident floats in the path of another vessel, it can cause damage to that vessel as well. Your liability quickly adds up. This is when being underinsured catches up to you.

With any water sport, there is always the chance of injury. Medical costs can be expensive and prohibitive. Due to this, Medical Payment is a recommended feature for water vehicle insurance. Medical Payment will cover medical and ambulance fees if someone is injured while on or boarding/unboarding the vessel.

Unfortunately, not every person does the right thing and gets the required insurance coverage to operate their vessel. Even some that do have insurance sometimes 'hit-and-run' in the event of an accident. To protect you, it is a good idea to have Uninsured Boat Owners Insurance. This way you are still entitled to recover money even if the person liable does not have insurance or decides to illegally hit-and-run.

Another very important coverage is Towing. Commercial Towing and Assistance reimburses you if you break down and need a tow to port. Most policies will tow you to the nearest harbor. In the case of wreck removal, coverage can differ remarkably. Make sure to ask details as to what is and isn't covered under different policies.

Lastly, although it may not be the most exciting conversation, it is extremely important that you take the time to ask the insurance agent questions. Ask as many questions as you need to understand the specifics about the insurance you are looking to buy. If the agent can not answer your questions to your satisfaction, shop around for someone who can. Make sure to read any fine print that discusses exclusions and limits. If your in a position where you are filing an insurance claim, the last thing you need is any surprises.

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