Many people dream of having their own boat, and Florida is the perfect place to purchase one because of the mild weather and beautiful coastlines. But buying a recreational water vehicle comes with some risks, such as having an accident or your boat being damaged by a natural disaster. For this reason, many smart buyers opt for watercraft insurance, which can protect you in a wide range of scenarios.
But is it always a good idea to get insurance, and is this really necessary? Many states don’t mandate it, so you could theoretically purchase your watercraft and use it without a policy. Unfortunately, this puts you in a very risky position, particularly because you’ll also be liable for damage you inadvertently inflict on other people, for example during a collision. Let’s have a closer look at the kinds of insurance you can buy and whether this is necessary for you.
Which States Require Watercraft Insurance?
Unlike car insurance, which is mandated by most states, it’s usually up to you to decide whether you’d like to insure your boat or other water vehicle. There are three exceptions, namely Arkansas, Hawaii, and Utah, where you must purchase insurance in order to drive your boat. In those states, you might be asked for proof of insurance, and you could be fined if you don’t have the proper documentation.
However, it’s your choice whether you protect your vehicle from losses in all other states. In general, this is always a good idea because watercraft can be exceedingly expensive, so your losses will be large if something happens. What’s more, you’re putting yourself in a risky position because you could be liable for damages, for example, if you crash into someone else’s property and break something.
Financing Your Watercraft Purchase
Special rules might apply if you decide to finance your purchase. A lender will require proof that you are a responsible borrower, and this could include insuring your watercraft. This is because people are much less likely to pay off the rest of their loan if their boat has been damaged or stolen. In such a case, the insurance will cover you, and you can use the compensation you’ve received to pay off the rest of your loan.
Taking out a policy prevents you from being out of pocket and reassures your lender that they will receive their money back, no matter what happens. As a result, you can expect a lower interest rate and more favorable terms.
What Are the Risks of Not Having Proper Insurance?
As you can see, you’re unlikely to legally need insurance, especially if you purchase your watercraft in cash. However, this doesn’t mean that saving a few dollars on insurance is always a good idea. Not having the proper insurance could cost you a lot more in the long run. What’s more, you won’t get to fully enjoy your watercraft because you’ll be worried about damaging it and having to pay for the repairs.
There are many benefits to signing up for a good policy, which will protect you in a wide range of incidents. For example, you won’t lose your investment even if your boat is damaged, you can get compensation for an accident, and you won’t be liable if you injure someone else or damage their property.
Losing Your Valuable Investment
The most obvious and common problem you might face is your recreational water vehicle being damaged. This could happen due to a natural disaster such as a flood or storm, or it could be the result of someone’s malicious actions. If your boat needs repairs beyond the normal ones due to wear and tear, insurance can help you pay for them.
Depending on the policy, the contents of your watercraft might also be included. Thus, if someone steals from you, your insurance will pay for you to replace the items. You should ask your advocate about this possibility and whether your chosen insurance company includes it.
Damage Due to an Accident
Accidents happen, and your boat might get damaged if you collide with another watercraft. Even if it’s your fault, your watercraft insurance is likely to cover the damage done to other people’s property.
Drivers who have taken out collision insurance will also receive payment for the repairs necessary to their own vehicle, or they get the money they need to purchase a new one. However, this kind of cover is often optional, and you’ll have to decide whether it’s worth it for you. If you chose to lease your vehicle, your lender might require collision insurance.
Liability in Case of Injury
A particularly expensive issue is liability in a personal injury case. Watercraft drivers who caused an accident are liable for the injuries other people have sustained and the legal costs associated with such an issue. This can quickly become very expensive.
In fact, people with severe and long-lasting injuries might be entitled to six-figure compensation. Although the likelihood of such an incident is relatively small, the consequences for your life would be catastrophic. That’s why getting insurance can be a crucial way to protect not only your asset but also your personal finances.
Should I Get Insurance?
The case for getting insurance is very strong, even though it is not legally required in most states. Failing to protect yourself against losses could result in five- or six-figure payments, especially if you have a collision and injure someone else. Even careful drivers aren’t precluded from this because accidents happen, and none of us can guarantee to drive perfectly all the time.
For this reason, you should get in touch with an insurance advocate and go through your options. Discuss what kinds of cover are available and which ones are most important for you. If you’re in a good financial position, you might only require minimal coverage for the worst kinds of situations, but if you don’t have a large emergency fund, a more comprehensive policy could be appropriate.
Your advocate can discuss the various policies and add-on options with you. There are several types of specialized cover that could be useful depending on your situation. For example, you could get your fishing equipment insured, or you could get covered for any emergency services you might need. These extras can make your policy slightly more expensive, but the benefits could be well worth the small additional fee.
In most states, watercraft insurance isn’t required by law, but being uninsured can put you at risk. In addition to your own boat, you might also have to pay for damages to other people’s property. What’s more, you may have to pay for medical expenses, both for yourself and for others who were injured in a collision with your watercraft. That’s why purchasing a good insurance policy can protect you from a large amount of risk.
To be shielded from disasters doesn’t have to be expensive. In fact, you might be able to find a basic policy that charges you no more than $150 per year. More comprehensive plans could be up to $500, but they will be worth it if you use your recreational water vehicle often or are worried about it being damaged. Call us now at iInsure to speak to an insurance advocate and find out which providers could be a good fit for your needs.