Boat Insurance is a type of “casualty” insurance designed to cover injuries and losses associated with the operation of a boat used for leisure purposes. Casualty insurance (which includes boat insurance) is also known as liability insurance. It is designed to cover losses apart from health, life and other types of insurance policies. For example, insurance covering a boat provides coverage for damage to property or injuries sustained to a person as a result of the operation of a boat. It also provides compensation to cover damages sustained by the boat itself.
Boat Versus Marine Insurance
Boat coverage sometimes is confused by consumers with marine insurance, for understandable reasons. Marine insurance is associated with commercial craft. Marine insurance provides coverage for loss of items, merchandise or property being shipped on a commercial vessel.
Blue Water Provision
An important provision in an insurance policy covering a boat is what is called “blue water.” This is defined as the general parameters in which the boat is expected to travel on the water. As a result, a consumer typically must provide an insurance carrier with a general idea of where and how a boat will be used when seeking coverage. If a boat is located outside the “blue water” defined parameters at the time of an incident, an insurance company theoretically can deny a claim for damages or injuries. (Some policies reference “blue water” in plainer language: “navigational limits.”)
Lay-Up Period Provision
Because many boat owners do not use their crafts the entire year around, a lay-up period many times is included within a policy of insurance for a boat. An insured is not charged for coverage during the lay-up period and, as a result, there is not actual insurance coverage over this designated time period. A person must take care not to use a boat during a lay-up period. If an accident or loss of some sort occurs, there will be no compensation available pursuant to the terms and conditions of the insurance policy itself.
Most insurance policies covering boats include a specific listing of who is permitted to operate the craft. If someone else operates the boat that is not included on the policy list, there will be no coverage in the event of an accident, incident or loss.