Minn. Federation Reminds Water Lovers Not to Miss the Boat This Summer

June 29, 2005

Because Minnesota has the highest per capita boat registration figure in the country, it is important for boat owners to have the appropriate property and liability insurance, according to one area insurance federation.

“We aren’t just the Land of 10,000 Lakes. We’re also the land of thousands of boats sharing the same waters. Boat owners need to be sure they are properly insuring their vessel,” says Al Parsons, Insurance Federation of Minnesota president and CEO.

Although collision with another boat is the most reported type of loss,
weather-related losses, collision with underwater objects, fire, and theft also pose significant threats. In fact, more than $40 million worth of boats are stolen each year, according to the National Insurance Crime Bureau.

Physical damage can occur on land as well as water. The hull can be
damaged easily if a boat is not properly secured when towed.

Canoes, small sail boats, and boats equipped with motors of less than 25 horsepower are generally covered under a homeowners or renters insurance policy. Coverage is $1,000 and generally includes the boat, motor, and trailer combined. However, loss by theft, wind, or hail is usually restricted to the insured premises. Liability coverage is included but usually does not extend to non-owned watercraft.

Larger and faster boats, yachts, and personal watercrafts such as jet skis and wave runners require a special endorsement to the homeowners or renters policy or a separate boat insurance policy.

For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings, and permanently attached equipment for an agreed value. These policies also provide broader liability protection than a homeowners policy.

Boat insurance also covers:

— Physical damage to the craft
— Bodily injury – for injuries caused to another person.
— Property damage – for damage caused to someone else’s property.
— Guest passenger liability – for any legal expenses incurred by someone using the boat with the owner’s permission.
— Medical payments – for injuries to the boat owner and other passengers.
— Theft.
— Operation of non-owned watercraft with the owner’s permission.

Most companies offer liability limits starting at $15,000 and can be
increased to $300,000. Typical policies include deductibles of $250 for
property damage, $500 for theft, and $1,000 for medical payments.

Other policies may have a single deductible amount which applies only to property claims. Higher deductible amounts may be available. Additional coverage can be purchased for trailers and other accessories. Boat owners may also purchase an umbrella liability policy which will provide additional protection for their boat, home, and car.

The type and value of the vessel, the horsepower of the engines, and the location where it is kept are all factors in determining coverage and premium.

Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.

Another variable influencing the cost of insurance may be where the boat is used — navigating on the Mississippi River is generally riskier than on a quiet lake. “It’s important that boat owners talk to their insurance agent to make sure they are addressing all risks connected to boating,” said Parsons.

Boat owners should also inquire about discounts including:
— Diesel-powered crafts. Diesel fuel is less hazardous than gasoline since it is less likely to explode.
— Coast Guard-approved fire extinguishers.
— Ship-to-shore radios.
— Two years of claims-free experience.
— Prior boat ownership.
— Multi-policies with the same insurer, such as a car, home or umbrella policy.
— Safety education courses, such as those offered by the Coast Guard Auxiliary ( http://www.cgaux.org ), U.S. Power Squadrons
( http://www.usps.org ), or the American Red Cross
( http://www.redcross.org).

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