Most homeowners’ insurance policies provide limited coverage for boats.  If you boat is less than 75 horse power or less than 26 feet for sail boats, your homeowners policy will provide liability coverage.  Also most homeowners’ policies will provide $1,000 to $2,000 of coverage for your boat for only certain types of claims, such as, catching on fire, windstorm, hail, explosion, vandalism, theft, just to name a few. 

Your best bet is to get a separate boat insurance policy.  This will provide you much better coverage than your homeowners’ policy.  A boat policy will provide you with the appropriate liability, hull and motor coverage and you will be able to insure the boat for its full value.

You have to be careful when shopping for boat insurance because the policies can vary greatly.  You may think you are getting a great deal but the coverage could be drastically different from another policy.  The big coverage to watch out for is how the insurance company is going to settle your claim if you have a total loss, are they going to pay the agreed value of the boat or only the actual cash value. 

Agreed value means that if you purchase your boat for $20,000 and you and the insurance company agree to insure it for that amount, then, if you have a total loss five years down the road, the insurance company will pay up to $20,000 to replace your boat with a similar boat.

Actual cash value means that if you purchase your boat for $20,000 and you have a total loss five years down the road, the insurance company is going to apply depreciation to your boat.  You may find yourself in a situation where you may only receive $12-$15,000 to replace your boat.  That might mean that you would have to down grade to a smaller less powerful boat, unless you wanted to pay the additional $5-$8,000 out of your own pocket to replace your damaged boat with a similar one. 

The agreed value policy will cost you a more up front, but could potential save you thousands of dollars in the long run.

Some people don’t realize that their homeowners’ insurance limits the amount of coverage that they have for certain items like money, trailers, boats, etc.  When you look at the face of you policy you can see the total amount of coverage that you have for your personal belongings, but what you don’t see are these other restrictions that are buried in the actual policy. 

Most homeowners’ policies provide the following coverage amounts:

• $200 for money
• $1,500 for boats
• $1,500 for other trailers
• $1,500 for theft of jewelry
• $2,500 for theft of firearms

One of the Companies that I represent, Erie Insurance provides the following coverage amounts after endorsement:

• $750 for money
• $2,500 for boats
• $2,500 for other trailers
• $5,000 for theft, misplacing or losing of jewelry (Ultracover Policy only)
• $5,000 for theft, misplacing or losing of guns (Ultracover Policy only)

You can see that the underlying limits of coverage vary significantly.  Be sure to ask your current homeowners insurance company what types of coverage restrictions that they have in their policy.  You may find yourself under insured in some areas.

The above list is just an example of some of the limitations of coverage in the homeowners policy, there are more.  The ones above I just thought would be the most common that would pertain to most people.