Editor's note: This information first appearedon iii.org and is adapted and reprinted here withtheir permission.

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Boating is one of summer's most popular activities. Whether it'swater sking, sailing, fishing or just cruising on the reservoir,thousands of Americans spend countless hours enjoying the boatinglifestyle. Unfortunately, there are thousands of recreationalboating accidents each year. Make sure your clients have adequateboat insurance coverage and understand basic safety guidelines forthe care and protection of the crew, guests, and thevessel.

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[Related: When it comes to boating cover, know theropes]

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Small boats

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Most companies provide limited coverage for property damage forsmall boats such as canoes and small sail boats or small powerboats with less than 25 mile per hour horse power under ahomeowners or renters insurance policy. Coverage is usually about$1,000 or 10% of the home's insured value and generally includesthe boat, motor and trailer combined. Liability coverage istypically not included—but it can be added as an endorsement to ahomeowners policy. Check with your insurance representative to findout if your boat is covered and what the limits are.

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Separate boat policy needed for large, fastboats

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Larger and faster boats such as yachts, and personal watercraftsuch as jet skis and wave runners require a separate boat insurancepolicy. The size, type and value of the craft and the water inwhich you use it factor into how much you will pay for insurancecoverage.

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For physical loss or damage, coverage includes the hull,machinery, fittings, furnishings and permanently attached equipmentas part of either an actual cash value policy or on an agreedamount value basis. These policies also provide broader liabilityprotection than a homeowners policy. But there are distinctdifferences between the two types of policies.

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Actual Cash Value policies pay forreplacement costs less depreciation at the time of the loss. In theevent of a total loss, used boat pricing guides and other resourcesare used to determine the vessel's approximate market value.Partial losses are settled by taking the total cost of the repairless a percentage for depreciation.

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Agreed Amount Value basis policies meanthat you and your insurer have agreed on the value of your vesseland in the event of a total loss you will be paid that amount.Agreed Amount Value policies also replace old items for new in theevent of a partial loss, without any deduction fordepreciation.

Physical damage exclusions might include normal wear and tear,damage from insects, mold, animals (such as sharks), zebra mussels,defective machinery or machinery damage.

Boat insurance also covers:

• Bodily injury—for injuries caused to anotherperson
• Property damage—for damage caused to someone else'sproperty
• Guest passenger liability—for any legal expensesincurred by someone using the boat with the owner's permission
• Medical payments—for injuries to the boat owner andother passengers
• Theft

Most companies offer liability limits that start at $15,000 andcan be increased to $300,000. Typical policies include deductiblesof $250 for property damage, $500 for theft and $1000 for medicalpayments. Higher limits may be available. Additional coverage canbe purchased for trailers and other accessories. Boat owners mayalso consider purchasing an umbrella liability policy which willprovide additional protection for their boat, home and car.

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Special equipment, towing coverage

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

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Boat owners should also inquire about discounts for thefollowing:

• Diesel powered craft, which are less hazardous than gasolinepowered boats as they are less likely to explode
• Coast Guard approved fire extinguishers
• Ship-to-shore radios
• Two years of claims-free experience
• Multi-policies with the same insurer, such as a car, home orumbrella policy
• Safety education courses, such as those offered bythe Coast GuardAuxiliary, U.S. Power Squadrons, orthe American RedCross.

For information on boating safety, visit DiscoverBoating's Safe Boating Tips.

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[Related: 5 tips to prevent boating claims]