Common Boat Insurance Terms

Boat insurance terminology can be confusing to first-time insurance buyers. Many terms are specific to the marine insurance industry and may be ambiguous to new boat owners. We’ve put together this short glossary to help you better understand the process of obtaining the proper insurance for your vessel. We hope this information will help prospective customers better understand what to look for in a boat insurance policy.

It is important to clarify any terminology you do not fully understand with your Global Marine Insurance underwriter. This glossary is provided as helpful reference, but is not meant to be a fully comprehensive guide.

  • Agreed Value: With this policy type, your insurance carrier and you agree on the value of your hull and hardware when the policy begins. In the event of a total loss of the boat, this will be the amount that you receive from the policy. An agreed value policy differs from actual value, in which you would be compensated for the current market value of the boat in the event of a claim.
  • Blue water: Commonly referred to when determining the navigational territory of your vessel; refers to waters over five miles from land.
  • Brown water: Commonly referred to when determining the navigational territory of your vessel; refers to waters within five miles of the coast.
  • Date Restrictions: With some policies, your boat is only insured during specific dates of the year. This can potentially lower your insurance payments in months where you anticipate being unable to use your boat due to weather.
  • Emergency Services: This coverage includes the recovery of a sunken boat, towing on a body of water, or a trailer. Clarify what your emergency policy covers with your agent, as this varies from policy to policy.
  • Lay-Up Period: The time during which you will not be using your boat. If you have a policy that includes a lay-up period, be aware of the dates. Using your vessel during lay-up means that you will not be covered by your insurance.
  • Navigational Limits: Your policy may outline specific limits to where you can use your boat and be covered. It is important to only operate your vessel within these limits and clarify with your agent exactly where you are covered. Some policies may only cover you within a certain distance from land; others may not cover you if you’re boating outside your home state. Be sure to talk with your underwriter so you understand exactly where your vessel will be insured.
  • Operators: People who will be operating the boat – often used to determine premium payment rates.
  • Pollution Liability: If included in your policy, this coverage will help cover you in the event of a fuel or oil discharge into the water.
  • Towing Liability : It is necessary to include this overage in your policy if you anticipate towing or pulling anything behind your boat.

This is not a complete list of insurance terminology, but a helpful reference for some of the more common terms you’ll encounter while shopping for boat insurance. If you have any questions or concerns while obtaining your quote, please do not hesitate to ask your underwriter.

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