In Florida, purchasing a yacht is an excellent lifestyle decision because it allows you to enjoy the great lakes, rivers, and beaches our state has to offer. But before you take your boat out for the first time, you’ll need to get it insured. Yacht insurance is essential because it protects you in case something goes wrong and you accidentally injure someone or damage their property.
While getting boat insurance is not a legal requirement in Florida, it’s a good idea for almost everyone because a personal injury lawsuit can cost hundreds of thousands of dollars. Some people might want to get additional coverage to protect their boat from damage or theft. Today, we’ll have a closer look at the kinds of insurance you can get, so you can figure out which policy is right for you.
How Much Yacht Insurance Do You Need?
There are countless types of insurance for your yacht, but depending on your situation, you won’t need to purchase all of them. The most important policy is liability insurance, which covers the cost of accidental damage to other people and their property. Most policies insure you for a set amount, often more than $1 million, but you should check what the deductible is before purchasing a policy.
In addition to protecting yourself against lawsuits, you might also want to insure your own yacht, especially if it would be difficult for you to replace it if it got destroyed or stolen. Once you’ve determined what kind of insurance you need, you can request quotes from your agent. The cost of your policy depends on various factors, including your location, the size and price of your boat, and the perceived risk level.
What Is Liability Insurance?
If you have an accident that involves only your own boat, the worst that can happen is that you’ll have to replace your yacht. However, your costs can be significantly higher if you crash into or otherwise damage someone else’s property. In addition to paying for the repairs or replacement of their boat, you might also be liable for any injuries you caused to the owner and passengers.
Personal injury cases can be extremely expensive. If you cause someone’s death, you might have to pay the bereaved family members hundreds of thousands or even millions of dollars to make up for the emotional pain and loss of income. For this reason, liability insurance is a crucial part of boat ownership.
What Is Comprehensive Insurance?
People who aren’t worried about losing their boat might be happy paying for liability insurance only, but those who might find it hard to replace their yacht should consider a comprehensive policy. This covers damage caused by natural disasters like storms, hurricanes, and fires, but it also pays out if your boat gets stolen or vandalized.
Sometimes, comprehensive insurance includes other scenarios, such as underinsured or uninsured boater coverage. This policy replaces your boat if someone else, who doesn’t have sufficient insurance, damages your property but isn’t able to pay for the repairs. When looking at various options, you can discuss whether you need such add-ons with your insurance specialist.
How Much Will My Insurance Cost?
The cost of liability insurance depends on factors such as the size and value of your boat, where it is located, and whether you are considered a high-risk boater. For example, your premiums will be much higher if you have been caught driving under the influence in the past or if you’ve caused an accident with your yacht.
Similarly, you can expect to pay more if your boat is expensive. Some experts estimate that the annual cost of insurance is around 1.5% of your boat’s value. Therefore, you can expect to pay $15,000 a year if your yacht cost you $1 million. A smaller boat is much less expensive to insure.
Factors to Consider
Everyone’s situation is different, so there isn’t one yacht insurance amount that is right for each boater. When you’re ready to purchase a policy, you should reach out to an agent, who can help you figure out what works best for you. Some factors that affect the type of policy you should get are your current financial situation and the risks associated with your type of yacht.
Your Financial Situation
Your financial situation determines the level of insurance you need. When you take out a loan to buy your boat, you’ll have to pay it off even if your yacht gets destroyed. This can prevent you from being able to replace your watercraft. In such a situation, getting a high level of comprehensive insurance is a good idea. However, if you purchased your boat in cash and could easily replace it, you might only need liability insurance.
Your Risk Factors
As discussed, the biggest risk yacht owners face is an accident that causes injury or damage to someone else’s property. If you use your boat in densely populated areas, it’s more likely that you’ll have an accident, so you should get a higher level of coverage than if you tend to use the yacht in almost deserted locations. Additionally, there might be other risk factors.
For example, you might live in an area prone to hurricanes or storms that could destroy your boat, or there might be a lot of crime in your neighborhood. To lower your risk and your insurance premium, you should protect your boat well. Store the yacht in a safe location that is sheltered from rain and add security devices like locks and an alarm. If the insurance company sees that you are taking these precautions, you might have to pay less.
How to Find the Best Policy
To get started, you should reach out to an insurance agency like iInsure and ask for quotes. By working with professionals, you can find and compare the best policies in your area and therefore get the most cost-effective and comprehensive deal possible. Your agent will speak to you about your situation. They might ask about the cost of your boat, whether you purchased it on finance, and how you intend to use it.
When putting together quotes, agents also consider your individual preferences. For example, some people are more risk-averse than others and therefore prefer a higher level of insurance, even if they are financially stable. Once you receive your quotes, you can discuss them with your agent and choose the one that suits you best. After that, you can re-evaluate every year and switch providers if a better offer comes along.
Are You Covered?
Virtually every yacht owner should get liability insurance because it protects them from expensive property damage and personal injury lawsuits. Policies vary wildly, and while some only cover the basics, others are much more extensive. The type of yacht insurance that suits you best depends on your current financial stability and your level of risk.
If you can easily cover the cost of replacing your boat, you can go for a simple policy that only covers liability. However, if you’d like to protect your own yacht from damage, you’ll need comprehensive insurance. Get in touch with us at iInsure to find out more about the kinds of policies available in Florida. When you call or fill out the contact form, we will get back to you with the best quotes in your area and help you select one that suits your needs.