With snow coverage in 49 of the 50 states this year, warm weather can't come fast enough for boat owners. But before it's the prime boating season, it's time for agents to start talking to customers and prospects about insurance. Are customers properly covered when it comes to boat insurance? Maybe a better question would be, do they know if they are properly covered?
Many boat owners don't have proper insurance coverage for their craft. Some aren't covered at all. It's not until they find out the hard way they weren't insured correctly: claim time. That's why it's so important for agents to inform their customers and make sure they help them get the right coverage.
A regular boat insurance check up is a good way to make sure customer's policies are up to date and that they have proper coverage. To help inform a customer about boat insurance and which coverages would be a good fit, it's a good idea to talk to customers about the following:
- A homeowners' policy versus a stand-alone boat policy
- Agreed value versus actual cash value
- What coverages mean at claim time
- The balance of cost and value in a policy.
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Many boat owners choose to add their boat insurance to their homeowner's policy to save some money up front. Some assume a smaller boat may be covered automatically on the homeowner's policy when, in fact, there are typically limitations on size, horsepower, and sometimes whether or not the boat is used strictly on the insured premises. The problem is if there is a claim, in many cases the insureds don't have the coverages they wish they would have received with a stand-alone policy. Come claim time, these are the differences that matter.
Some of the differences a stand-alone policy offers over most homeowners' policies include:
- Physical damage
- Increased limits of liability
- Medical payments
- Uninsured watercraft
- Total loss replacement option
- Personal property
- Towing and assistance
- Trailer coverage
- Pollution coverage.
Another important option to inform customers about is agreed value versus actual cash value. If a valuable boat is insured with an actual cash value policy, and after a few years the insured has a total loss, the payment will be the depreciated value of the boat. That value may or may not cover replacement of the vessel. With an agreed value policy, the only depreciation to consider is market value. If a total loss occurs, customers receive the agreed value stated on the policy–which can be the difference of replacing a boat or not after a total loss.
There's a lot to consider when it comes to boat coverage and it comes down to the balance of cost and value. Before customers make a purchase decision, it's important that they understand the types of coverages and policies out there, and what those coverages mean at claim time. This may be obvious knowledge to an insurance professional, but customers may not be as informed. Explaining coverages and options to customers is a great opportunity for agents to build a relationship with clients, express knowledge and trust, and help inform the insured. That's valuable information that customers just can't get by purchasing a marine policy online.
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