By Maria Scandale
A private boat is a luxury that opens up a world on the water. But when buying a center console for the first time, or coolly navigating the experience of owning a yacht, boat insurance is a need below the surface.
“You deserve to jet off into the distance and soak up New Jersey coastal living at its finest,” encourages Anderson Insurance Agency at 295 Route 72 in Manahawkin, one of several agencies contacted to talk about the topic. “But, before you head out, make sure you have proper boat insurance so that you can sail with confidence.”
The Anderson Insurance Agency website, aiainsure.com, outlines the need for marine insurance to protect the boating lifestyle. “If there’s a single reason to buy boat insurance, it’s to protect yourself in case of a collision and/or medical emergency.”
Boat damage can be costly. The company lists that for any recreational vehicle, whether it’s a cruiser, a fishing boat or a yacht, it’s important to have boat insurance in case of fire, lightning, hurricane damage (in 2012, more than 25,000 recreational boats in New Jersey were damaged or lost in Superstorm Sandy and total damages were estimated at $242 million), equipment failure and towing, equipment repair or replacement, vandalism, theft and accidents.
Between 2000 and 2015, about 1,800 boating accidents occurred statewide. Many more may have gone unreported.
“Busy waterways can be just as dangerous as roadways,” the AIA web page pointed out. You don’t want to risk being stuck paying any combination of medical bills, legal fees and property damage out of pocket because you neglected to get liability coverage.”
Homeowners are advised not to be “complacent” with the boat coverage that a homeowners insurance policy might provide. “Homeowners policies offer limited protection for boats – usually only enough to cover light damage to a canoe or small sailboat, with no liability coverage. The standard The Whys and Wherefores of Boat Insurance for boat coverage is any inboard or I/O over 50 HP, outboard motor over 25 HP or sailboats over 26 feet, these generally won’t get covered by your homeowners policy,” said the website.
A form on the website is one way to start the process of navigating the nuances of coverage choices. Not all boat and yacht policies are the same, and the company’s dedicated boat specialists are also licensed boat operators.
There are many factors that insurance companies consider when setting rates, including years of boating experience and training, age, driving record, credit score, choice of coverage, navigation limits, prior claims and speed of the vessel.
Siracusa-Kaufmann Insurance Agency has been serving the Jersey Shore since 1894. Boating insurance is a big part of that today, from Florida to Connecticut to marinas such as High Bar Harbor Yacht Club. Imagine the extent that watercraft has changed in complexity. Insuring the boat is insuring a large asset.
In recent years, “the cost of boats has increased dramatically, particularly since COVID where people are looking to get out and have some fun without the COVID exposure,” said account executive Charles L. Newmeyer, whose office is at 624A Route 9 in Little Egg Harbor, across from J.T.’s Restaurant. The main office of the independent agency that is a member of Insurance Agencies Inc. is in Northfield.
He works with a yacht dealer in Norwalk, Conn., who had customers trading in a two-year-old, 50-foot boat for a 53-foot brandnew model “because they wanted that extra 3 feet for COVID reasons,” the dealer told the agent.
In any year, anyplace, coverage is needed because accidents happen, no matter who is at fault. The agent counsels customers to not overlook the amount of liability coverage that is advisable.
“Nobody leaves the dock and sets out to run over someone with their boat, but as we all know, it does happen on occasion,” Newmeyer said, “and it’s critically important that the boat owner carries liability insurance, and most prudent boaters not only have a high liability limit on their boat insurance policy but they also carry a personal umbrella policy, which adds an extra layer of protection over the boat insurance liability limit.
“What most folks have to be careful of as far as boat insurance is how the hull is insured. Is it replacement cost or is it actual cash value, meaning there is depreciation, particularly on the lower unit? If a boater strikes a submerged object and the lower unit is damaged, you want to make sure that there is replacement cost coverage.”
If someone is looking to insure a used boat versus a new boat, the insurance company may require a survey. “The survey determines the seaworthiness and value of the boat.”
Buying boat insurance is “common sense,” the agent said, “which most people understand, and they do purchase boat insurance. Personal watercraft (wave runners) are no exception.”
Another aspect of coverage is “to make sure you have a proper pollution liability limit,” Newmeyer said. “If there is a gasoline spill or an oil spill, the boat owner is responsible for that cleanup.”
Siracusa-Kaufmann’s style of going over advisories and options is “concierge service, good, old-fashioned face-to-face, let’s sit down and go over everything,” Newmeyer said. “That kind of makes my job easier, because I can hash things out with my client and we can determine exactly what their needs are.” The email is cnewmeyer@insuranceagenciesinc.com.
The Van Dyk Group’s personal lines sales manager, E. Keith Taege, explained some of the issues covered when talking with clients, liability coverage being chief among them.
“In my opinion, the biggest factor is insuring against liability,” Taege said. All kinds of watercraft are navigating together in lagoons, for example, and mishaps can unfortunately occur. “A kid on a raft, if you would injure that kid, you could be held liable, legally. And if you don’t have enough liability coverage, you’d pay that defense cost out of your own pocket.”
“The second thing is the value of the boat,” Taege continued. More people have been buying boats in the past year, and prices have gone up quite a bit, he noted.
Also, the equipment on the boat adds value that may be taken into consideration. These may include fish finders, GPS systems, music speakers, boat covers, grills, plus personal items.
What could possibly go wrong? Hopefully nothing on those days of paradise on the water, but in reality, plenty. Whether the boat is older or new, eventualities can be running aground, mechanical breakdowns, striking a submerged object.
“Also, if the boat does run aground, or if it hits something and sinks, there is the cost to remove it – salvage coverage or fuel spills,” Taege said. “If the boat leaks oil or fuel into the bay as a result of that accident, it’s a pretty expensive cost to have that removed.” He continued, “If the boat breaks down and you’re 20 miles away from your home and repair shop and you have to get the boat towed, that adds up really quick, so to have enough towing coverage is important.”
Questions about securing a good policy can be answered over the phone, a convenience that many customers like. “The company may or may not want pictures ahead of time, or may want a survey,” Taege added. “If it’s an older boat, they want to see if it’s in good condition.”
When asked what type of policy a boat owner wants, the owner can consider replacement cost minus depreciation, or actual cash value (ACV). (An ACV policy is defined as providing coverage up to the current market value of the vessel in the event of a total loss, taking into account depreciation and the condition of the boat at the time of the loss.)
Boating experience is one factor considered in the cost of a policy. “You have people buying a 23-foot Bayliner and have no experience; they’re folks who could have the possibility of injuring somebody if they don’t know how to navigate that boat correctly,” Taege noted. “It all goes back to that liability coverage.”
Different lengths, horsepower, deductible limits and navigation limits are also what most policy costs are based on. Discounts may be available for boats that are stored all winter. “And if you take it from New Jersey and bring it down to Florida every winter, make sure you have coverage for when it’s in Florida.”
With offices in Beach Haven Terrace, Manahawkin and Barnegat, the agency’s website is vandykgroup.com.
Last Updated on November 7, 2022
