Why would anyone purchase boat insurance in Texas when the state has no boat insurance requirement? Well, just because the state doesn’t require you to have boat insurance does not mean that it isn’t a good idea. Texasquotes.com says that if you have a boating accident that involves injury to someone else or damage to their property, any settlement will come out of your boat insurance, not out of your pocket and possessions. In addition, just because the state of Texas doesn’t require boat insurance doesn’t mean that the marina you use won’t require boat insurance for the benefit of other boat owners using the same marina. If you are considering purchasing a boat and you plan on taking out a loan to do so, your loan company will likely insist that you maintain your boat insurance until the loan is repaid.
Choosing Boat Insurance
One place to start is with your homeowner’s policy. It may already cover your boat. However, a homeowner’s insurance policy is not likely to cover a larger, more expensive boat. In that case, you will need a separate boat insurance policy. Still, by purchasing your boat insurance from the same company that covers your home and/or car, you may be entitled to a discount for having multiple policies with that company. Carefully study the boat insurance policy offered by your current insurance company, however, and compare it with the policies available from other companies. While automobile and homeowner’s insurance policies are very similar from company to company, boat insurance coverage can vary a great deal.
What Should a Boat Insurance Policy Cover
Following is a list of coverage that you may want to look for in your boat insurance policy:
- Physical damage
- Motor coverage
- Trailer coverage
- Coverage for your car while towing your boat
- Medical payments
- Theft and vandalism
- Communications devices
- Boat covers
- Docking fenders
Boat insurance policies have two sections, a physical damage section and a liability or protection and indemnity section. The physical damage section covers the boat hull, its motor or sails, and the onboard equipment needed to operate the boat. The liability section covers property damage and medical payments to others that arise from a boating accident and payment assistance with your legal defense against lawsuits for covered liabilities.
Coverage for the Physical Damage Section
The physical damage section should cover loss or repairs that result from damage caused by other boats; submerged or floating objects; collisions with docks; weather damage from wind, rain, hail, lightning, or wave action; fire; and theft or vandalism. Look for policies that cover your boat while it is on the water, while it is being stored on land, and while it is being towed. In addition, look for “all risk” boat insurance that states that any loss or damage not specifically excluded will be covered by the policy.
One significant difference between boat insurance policies is whether a loss settlement is calculated with an “agreed value” or an “actual cash value.”
If your boat is totaled, an “agreed value” policy pays the amount stated in the policy, in effect replacing the boat. In the case of a partial loss of some items, the policy pays the replacement cost minus the deductible with an allowance for depreciation on items that normally suffer a high amount of wear and tear such as trailers, sails, canvas, and some machinery.
An “actual cash value” policy factors depreciation and the condition of the boat or the lost items into the loss settlement payment along with the deductible. Thus, you receive somewhat less than the market value of your boat or the lost items at the time of the settlement.
Other coverage that you should consider for your boat insurance policy is personal property coverage, towing and assistance coverage, coverage for the removal and disposal of your boat should it be wrecked and declared a navigational hazard, coverage for containment and clean up of oil leaks and pollution, and coverage if you ever borrow and operate someone else’s boat. Personal property coverage includes damage to or loss of personal property such as clothing, personal effects, and sports and fishing equipment while it is on your boat or as it is being loaded or removed. Towing and assistance coverage includes situations in which neither you nor the boat are in immediate danger but which require delivery of fuel, oil, or parts; emergency repairs while the boat is underway; or towing the boat to a place where repairs can be made.
Coverage for the Liability Section
When comparing medical payment coverage, look for policies that will pay for injuries suffered on your boat even in situations for which you are not responsible. Be certain that you and your family are covered by the policy, and determine if the policy covers people as they board or leave the boat and as they are towed behind the boat when water skiing, for example. Also, check for coverage of any paid crewmembers you may hire, coverage for temporary shore-based workers such as mechanics or marina employees who may be injured while on your boat, and coverage if you plan on chartering your boat or carrying passengers for a fee. Make sure that the policy allows an adequate amount of coverage for medical payments. When choosing between policies with equal amounts of coverage, select a policy that offers “per person” coverage over “per incident” coverage.
Because boat insurance is not required in Texas, be certain you have uninsured boater coverage. This coverage ensures that you are covered for any damages you would be legally entitled to collect from an uninsured or unidentified hit-skip boater and that anyone on your boat who is injured by such a boater will be compensated for their injuries.
Even though Texas does not require boat insurance, it is a wise investment that allows you to enjoy your boat without worry.