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Marine insurance for boats and yachts differs significantly from other forms, such as homeowners and auto insurance. Other forms are standardized within a given state; every marine boat/yacht policy can differ more substantially from others in important ways. Provided below is general information regarind marine insurance. Importantly, note that this webpage provides only general information; this information does not necessarily apply to any specific policy, insured, or insurer and may not be applicable or accurate in all situations; to ascertain actual coverages and terms for any given policy, insurer, insured, or quote, an insured or prospective insured must carefully read his or her own quote, policy, endorsements, and other supplementaty documentation and proactively discuss any questions or needs for changes with his or her agent or broker and/or insurance company.
Types of Hull Coverage (Hull Valuation Methods): Agreed Value, Replacement Cost, and ACV
Agreed-
Replacement-
Actual-
When a policy is referred to as ACV, Agreed Value, or Replacement Cost, the terms typically refer only to how the policy will cover the HULL in a TOTAL loss. Covered partial losses and/or coverd losses to certain items, such as outboard motors, certain other machinery, tops, canvases, and sails, are typically covered on an ACV basis on Agreed-
The term "liability coverage", as commonly used, can actually refer to more than one form of coverage, but in general, it pays for legal expenses to defend you from lawsuits arising from the operation of your vessel; it also pays for covered financial damages awarded by the courts to a plaintiff in such cases where a court holds you legally liable. In the case of P&I coverage, but not Watercraft Liability, it also pays for the expenses of wreck removal, oil spillage, and other things named within the P&I policy. There are some exclusions and important differences in the types of liability insurance, of which you should be aware. The exact coverage provided under any policy will be written within the policy jacket. Read carefully, as various coverage items are commonly provided within one section of a given insurance policy but excluded in another section of the same policy–or vice-
P&I Versus Watercraft Liability: Know the Significant Difference Between Them
Though the terms are often used loosely, interchangeably, and incorrectly-
Policies vary on this coverage, but typically and generally, Watercraft Liability is intended to cover sums, up to the stated limit, for which you the Named Insured is legally liability due to bodily injury and/or property damage to others, arising from the Named Insured's operation of the insured watercraft. It does NOT cover bodily injury to YOU, a family member, or an operator of your vessel. Some “watercraft-
Policies vary on this coverage, but typically and generally, P&I is intended to cover what Watercraft Liability covers PLUS the Named Insured's liability for his at-fault injuries to captain and crew (but only if Jones-
Many boat/yacht policies have a "collision clause" that limits the amount of insurance coverage provided for liability expenses occurring from collision with another vessel; this is often limited to the hull limit of the insured vessel but can sometimes match the P&I or Watercraft Liability limit or be increased for additional premium.
Uninsured Boater coverage is intended to cover injuries aboard your vessel arising from the actions of other boaters who have no applicable liability insurance.
Other Important Variables and Information
Be aware of how far offshore your policy covers you. Some policies are inland only. Inland rates are typically lower than coastal rates. Coastal policies generally allow use in saltwater while inland policies are typically limited to “inland lakes and rivers” and often limit navigation to freshwater. Some coastal policies limit navigation to 5, 10, 25, 50, 75, or 100 miles offshore. Most coastal-
"Inland navigation" normally refers to operation of a vessel inland of the freshwater demarcation line. However, on some policies, "Inland Navigation" can also refer to saltwater harbors, lakes, and rivers. The latter is the exception, not the rule.
"Coastal navigation" normally refers to operation of a vessel in saltwater within, along, and outside of the coastline. It normally includes offshore navigation, but be sure to check what your offshore mileage limits are and/or if there are any on your policy.
Be very careful here. Some companies provide marine insurance policies with NO COVERAGE for windstorms. This is often overlooked by customers: they do not even know that they don't have coverage for damage caused by the effects of wind or windstorms. Some agents do not actively discuss this with their clients. One popular misconception is the idea that a person's homeowner’s insurance will cover his boat for the windstorm as long as the boat is in his garage. That is false. Homeowner’s insurance is only intended to cover boats up to 14 feet in length, with up to a 25 HP motor, while in the garage, for up to $5,000. If you insure your $50,000 bay boat with an X-
Most policies exclude mechanical breakdown, but we place certain policies that include it. We are one of the few agencies who has a charter-
A named windstorm is any windstorm that has been given an official name by an official weather service; for example, such storms include, but are not limited to nor-
Some polices from certain carriers carry “named-
This is the same as the named-
The Jones Act is another name for the Merchant Marine Act of 1920, which regulates maritime commerce in U.S. Waters. The Jones Act grants rights to “seamen”–which can be any paid captain or crew member–to collect for injuries caused by the negligence of the captain, fellow crewmen, or the owner of the vessel. If you have anyone who might be considered a “seaman” under the Jones Act, such as (but not necessarily limited to) a paid captain or mate, you need Jones Act coverage. The U.S. Supreme Court has defined a “seaman” as being one who spends more than 30 percent of his time in service of a vessel on navigable waters, but the determination in any given case will be up to the courts. If you have anyone who might reasonably be construed by an attorney as an employee of you or the boat, you need to discuss Jones Act coverage with a knowledgeable marine insurance agent. We can discuss the details of this with you and provide necessary coverage.
Pleasure boat policies provide coverage for boats that are not involved in commercial activity or enterprise. We can place part-
Charter coverage is for boats that take passengers for hire, such as fishing boats, guides, dive boats, eco-
The term “captain’s coverage” can mean more than one thing because it’s used loosely. If you have a paid captain and/or crew, you have a liability exposure with regard to them in the event that they get hurt on your vessel, and we can typically place crew coverage for that exposure on most yacht policies. Separate policies are also available for captains who operate vessels that they do not own to cover certain liability exposures they incur, arising from their own conduct as a professional captain; we do not typically place this captain's coverage due to low demand, but we can provide contact information upon your request for a broker who offers such placement through a special program.
Most marine insurance policies include a marginal amount of coverage for towing, if any. Average limits are around $500 and sometimes $1,000. Some of our polices include $5,000 of towing coverage at no additional premium. Keep in mind that towing and salvage are not the same thing and that most marine insurance polices cover salvage, and those with real P&I cover wreck removal, also. Also, keep in mind that towing coverage on a marine policy only applies to being towed on the water, not the road.
Marine “salvage” is the act of rescuing a vessel from imminent peril or recovering it after abandonment or loss. Coverage for necessary salvage costs pertaining to the insured’s vessel as a result of a covered peril is provided on most marine insurance policies.
Most marine polices cover this risk because maritime law requires boaters to help each other on the water.
Many marine policies exclude activities like skiing from coverage, and in order to cover this activity, it must be added back to the policy with an endorsement or be otherwise stipulated as covered without being excluded. If you ever intend to pull skiers; make sure you have the proper coverage. Inform your CSR or agent about any skiing activity that you intend to do.
Parasailing is normally excluded from coverage; however, certain special-program brokers offer commercial policies to cover this activity for parasail operators. We are not currently placing cpoverage for parasailers or other "wet" watersports (this is not to be confused with fishing charters, sightseeing, eco tours, or dinner cruises; we commonly place charter-boat policies for those uses).
Whether pleasure or commercial, boat and yacht policies typically only cover liability for incidents directly involving the VESSEL. Incidents that occur on docks, beaches, or otherwise not onboard the vessel, are not covered, unless specified in the policy or endorsed. If you operate a business, there are many other liability exposures that remain UNCOVERED by a marine policy. We encourage you to explore the full range of your liability exposures and will be assist you. We can provide coverage for these additional commercial exposures by providing a Commercial General Liability policy.
Contrary to popular misconceptions, umbrella policies do not cover over everything. They often contain exclusions and/or require an underlying amount of liability insurance for any given exposure. A common exclusion is liability for watercraft. We can typically quote and place umbrella policies that provide an excess limit of liability coverage over your underlying marine policy. If you have an existing umbrella policy, speak to your agent to make sure it covers over watercraft and to determine the underlying limit. We will be happy to help.
Owners and operators of marinas, boat dealerships, repair facilities, boat clubs, and other organizations often operate clients’ boats in the course of business operations. Commercial General Liability policies do NOT cover this without marine P&I coverage added.
MOLL is intended to cover costs for damages that the Named Insured is obligated to pay due to its legal liability for losses to others' property in its care, custody, and control. This coverage is important for boat and yacht dealers, marinas, repair facilities, artisans, mechanics, and other operations that take care, custody, and/or control of others' property. We place MOLL coverage for many commercial customers.  
Mysterious disappearance, freezing, thawing, improper winterizing, racing, skiing (on certain policies), intentional acts causing loss, losses associated with boats under contracts not disclosed to the insurance company, and wear and tear are generally excluded.
Racing (racing requires a specific policy covering that type of use),
Leasing or contracting the boat without disclosure to the insurance company,
Illegal conduct,
Towing the vessel with a trailer or vehicle not rated for the effective weight of the vessel,
Misrepresentation of material information,
Failure to comply with safety standards of the boat manufacturer or law enforcement,
Failure to operate, moor, and maintain the boat in a reasonable and responsible manner.
Failure to uphold your responsibilities set forth in any given policy.
Admitting fault or otherwise undermining the defense case of your insurance company in a liability claim where you are the defendant.
Actual coverages, exclusions, endorsements, and definitions vary per policy. We can quote and place policies from/with dozens of companies, each of which have varying coerages and options. It would be virtually impossible to accurately describe all actual or specific policy provisions for all companies, policies, and customers. This web page is only a general guide on how various policy provisions and terminology are commonly applied in the marine-
Strickland Marine Insurance Agency, Inc. is not a law firm or an insurance company or carrier; the information on this web page is provided as general industry information for customer-
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Copyright Strickland Marine Insurance Agency, Inc., 2014
Strickland Marine Insurance
Agency, Inc.
125D Wappoo Creek Drive
Suite 3
Charleston, SC 29412
800.446.1862
843.795.1000
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125 D Wappoo Creek Drive, Charleston, SC 29412