The options available for boat owners in terms of insurance may cover a wide range of possible problems that can arise while on the water. Unlike car insurance, boat insurance works with other forms of insurance to cover boats in part as a vehicle and as a piece of property. As a result, certain basic property and homeowner coverage policies may extend protection to watercraft in the event of catastrophic damages.
The interaction between boat and homeowner insurance may make watercraft insurance a necessity if a boat owner uses a large or particularly expensive vehicle. Under many homeowner insurance policies, additional property coverage, which may include boats as a piece of property more so than a vehicle, may only extend to a certain limit, meaning that a person may easily work through their coverage limits with minor damages to large boats.
Coverage may be provided under some specific watercraft policies to taxi damaged boats or tow boats on trailers to repair shops. This may cover boats that malfunction or are significantly damaged while still on the water, which requires a water taxi and appropriate land services, and may additionally help those pulled onto a trailer. There are additional options provided by some insurers in case a boat loses its fuel tank into the body of water, and even wreckage removal in catastrophic situations.
Replacing a totaled boat is a major concern for those who own a large watercraft. As these vehicles are expensive to purchase and may lose their value as quickly as a car, replacement values provided by homeowner's insurance may significantly lessen the overall value of the boat. By providing value protection under certain circumstances, some insurers allow for equal trade-in for similar models if a boat is wrecked.