When it Comes to Boats, Oil and Water Don't Mix — Are You Covered?

If you are a boat owner, there’s a chance you may have overlooked obtaining a boat or watercraft insurance policy.

Perhaps you were under the impression that your homeowner’s policy covered your boat. Some homeowner’s policies may provide for limited boat liability insurance coverage. This is usually based on the power of the boat motor.

In all cases it’s best to check your policy carefully and discuss your specific situation with your insurance agent. 

With the onset of boating season, now’s a good time to make sure you have appropriate coverage. And if you do have a boat or watercraft policy what exactly is being covered? There are different coverage options for boat owners to insure that their boat and its passengers are protected.

These options include physical property damage, watercraft liability, medical payments, fuel/oil liability, uninsured watercraft, boat equipment, and emergency services.

The environmental disaster of the oil spill in the Gulf of Mexico comes to mind, and boat owners have shown concern about coverage for unforeseen circumstances. An oil spill from your boat wouldn’t necessarily cause a commotion like the Gulf spill, but it could have a serious financial impact if you are personally responsible to fund the clean-up.

This sort of occurrence is usually covered by the watercraft liability coverage on the boat owner policy. However, some policies have separate limits for fuel oil liability. 

It’s important to note that a personal umbrella liability policy, which provides an extra cushion beyond normal liability limits, does not extend to fuel spill liability, so it’s very important to carry $500,000 or $1,000,000 in fuel spill coverage on the boat policy to make sure you’re protected from the unexpected. 

Boat owners may also neglect to take other operators into account when purchasing their policy. If you are borrowing someone else’s boat, make sure your policy covers your liability on that boat, including fuel spills, which would be under non-owned boat liability coverage.

While some boat policies will cover any permissive operators” who drive the boat with permission, some boat insurance policies may restrict coverage only to those operators listed on the policy. 

Likewise, if someone drives your boat and causes a bad accident, they may be covered as a “permissive driver,” but be careful because your policy may only cover the people who are specifically listed on your boat policy as operators.

This is a case where a personal umbrella policy could come in handy. While this policy would cover your liability exposure in driving someone else’s boat, they have underlying limits that will likely leave you with a gap of $100,000 or more. 

We do have some good news for you! There are a number of discounts to help you
save on boat insurance. A few of the discounts include new boat and diesel engine policies. You could also be eligible for a multi-policy discount on your boat if you have other polices (auto or home) with the same carrier.  In addition, you could earn discounts for having taken certain boat education courses. 

Additional Information: http://www.boatinsurance.org/