Even with the Hull Coverage endorsement (an optional add-on coverage to a homeowners policy offered by some companies such as Travelers) boat owners can only receive up to $7,500 for covered losses (in most states). Plus, the policy settles on an actual cash value basis only. Often this is just not enough to repair your boat. If you have made the investment to own and operate a boat, you may need the full range of protection offered by boat insurance.

What types of boats qualify?
Most boat insurance programs are designed to cover boats from 16' to 25' 11" in overall length. Boats eligible for this insurance must be valued at $3,000 or higher and include outboard powered boats, inboard powered boats, sailboats (with or without power) and outdrive powered boats. Non-powered boats (such as canoes, rowboats, and pedal boats) are also eligible but only for inland water use.

If the size of your vessel is 26 feet or greater, it's generally considered a yacht, and therefore qualifies for yacht coverage.

Physical Damage coverage
This important coverage pays to repair your boat if it's accidentally damaged or destroyed by a covered peril (such as fire, theft, windstorm, lightning or vandalism). Physical Damage coverage is very broad, with a few exclusions such as wear and tear, dishonest, illegal, intentional or fraudulent acts.

When you purchase boat insurance, one of your primary objectives is to protect your investment. Boat insurance can provide coverage for your:

• boat (including machinery)
• outboard motors
• auxiliary equipment
• dinghy (if under 16 feet and under 25 h.p.)
• boat trailer
• personal property kept aboard your boat.

What's more, you're usually covered for 12 months navigation anywhere within the 48 contiguous United States and Canada. You're also covered while your boat is in transit over land anywhere within the 48 contiguous United States and Canada.

Agreed Value (used for a Total Loss)
Boats under 15 years old are typically insured on an agreed value basis. This means the company will pay you the full amount for which your boat is insured in the event of a total loss. The agreed value is the amount that is shown on the policy and there is no deduction for depreciation.

Like cars, a boat's market value decreases over time. For this reason, the most you are allowed to insure your boat for is its fair market value. In most cases, insurance companies re-evaluate the market value of the boat every three years. Therefore, the agreed value listed on your policy will more closely reflect the current market value of your boat as it ages.

New for Old (used for a partial loss)
In the event of a partial loss, where there is less serious damage, property claims are handled in the following way: damaged property is repaired or replaced with no deduction for depreciation. In other words, "new" equipment replaces "old" damaged goods. Your policy should tell you how your insurer will settle claims for repairs or payment.

Actual cash value (used for boats over 15 years old)
Actual cash value means you will be paid the market value cost of your boat minus depreciation. Once your boat is over 15 years old, most boat policies revert to settling losses on an actual cash value basis. Also, some policies only offer actual cash value for certain damaged property such as sails, protective covers, batteries, outboard motors, lower drive units or outdrives, dinghies and trailers (regardless of the age of the boat).

What's not covered

• Non-conventional watercraft like: hydrocycles, jet skis, kit boats, ski boats, etc.
• High-performance boats with advertised or design speed in excess of 50 MPH.
• Auxiliary equipment such as:
• Outboard motors NOT listed in your policy
• Moorings, cradles, boat lifts or similar equipment
• Fishing tackle and scuba gear (however, most policies do offer protection for this equipment as a low-cost, optional coverage)
• Personal effects. This includes items not intended for the normal operation of your boat, such as portable TVs, cellular or portable phones, stereos, radios and cameras. For example, tools stored and used only in your boat may qualify as covered auxiliary equipment, whereas the same tools left in your car are considered to be personal effect

Deductibles
A deductible is the amount of risk that you are willing to assume in case of a loss. The higher your deductible, the lower your insurance premium. Boat deductibles are usually determined as a percentage of your coverage and can range from 1% to 10%, depending on the type and speed of the boat. For example, if your deductible is 1% of $20,000 of coverage, you would pay the first $200 of the loss. When selecting the deductible on your policy, consider how much financial loss you are willing to assume. Also consider how much premium you could save by choosing a higher deductible amount. A lower deductible of $100 may be available for special equipment such as boat trailers, personal effects and dinghies.

Boat Liability
This important coverage protects you if you are legally responsible for damages to property or injury to someone other than yourself or a family member. Boat liability coverage protects you in the event you are sued as a result of hitting another boat, or if someone is hurt onboard your vessel because of your negligence. This coverage is usually offered in increments of $100,000 up to $1 million.

Additional coverages
The following additional coverages may be offered as part of your basic boat policy:

• Uninsured Boat Coverage: pays for injuries caused by an accident that you are entitled to recover from the owner or operator of an uninsured boat. This also applies in situations involving an unidentified "hit-and-run" boat.
• Medical Payments: covers reasonable medical, ambulance and hospital costs should someone be injured while in or upon boarding or leaving your boat.
• Commercial Towing and Assistance: You are reimbursed for the reasonable costs incurred when you break down at sea and need a commercial tow to port.
• Agreed Value on Outdrives (lower limits): provides replacement of lower drive units (without deduction for depreciation) if damaged or destroyed by a covered peril.

Optional, low-cost coverages
The following separate coverages can complete your protection:

• Optional Fishing Equipment: fishing tackle and equipment are not covered in the basic boat policy. You may want to specifically cover this property if you have some expensive rods, reels or tackle.
• Increase the limits offered for personal property, uninsured boater coverage and commercial towing.

Inspection surveys
Inspection surveys are strongly encouraged to prevent injuries and maintain the safest of boating conditions. This is especially important for older boats powered by gasoline because gas vapors can be extremely dangerous. As boats get old, fuel lines or connections can wear out causing gas vapors to escape and settle at the bottom of contained areas. Any spark can set off an explosion.

• Consider installing a vapor detector in your engine compartment...these low-cost devices can warn you of gasoline vapors in the engine compartment.
• Inspect your boat on a regular basis, especially your electrical and fuel systems, and your safety equipment (such as fire extinguishers and personal flotation devices).

Premium Discounts
Some companies demonstrate their commitment to safe boating by offering a premium discount for policies where all the operators have successfully completed a Power Squadron or Coast Guard Auxiliary basic or advanced seamanship course. Copies of certificates are required. Newer boats also benefit from lower premium rates.

 There's nothing quite like the thrill of sailing. But, it takes hard work, planning and a devotion to detail to stay on the right course. That's why you pay attention to storm warnings, read the currents, and most of all, carry yacht insurance.

The following pointers will help you navigate through the details of yacht insurance:

What qualifies as a yacht?
If your vessel is over 26 feet, it's considered a yacht for insurance purposes. Most cruisers, sailboats and sportfishing vessels fall under this heading. If your vessel is under 26 feet, it probably qualifies for Boat Insurance.

There are two major coverages that yacht insurance policies (like the Travelers Commodore Yacht program) provide: hull coverage protection for your property and Protection & Indemnity liability protection.

Hull coverage
This important coverage pays to repair your yacht if it's accidentally damaged or destroyed by a covered peril (such as fire, theft, windstorm, lightning or vandalism). Hull coverage is very broad, with a few exclusions such as wear and tear, dishonest, illegal, intentional or fraudulent acts.

Your policy should include coverage for machinery, outboard motors, spars and sails, equipment, apparel and furniture. Equipment generally includes both permanently attached items (such as ship to shore radios, Loran systems and similar electronic and navigational gear) as well as auxiliary equipment such as deck chairs, binoculars, lifejackets and similar items normally used to operate or maintain your yacht. Your dinghy and trailer can also be covered (to do so, this equipment must be scheduled -- or listed -- on your policy). However, many companies automatically cover dinghies that are under 16 feet and 25 h.p.

Agreed Value
Yachts are typically insured on an agreed value basis. This means the company will pay you the full amount for which your yacht is insured in the event of a total loss. The agreed value is the amount that is stated on the policy.

Like cars, a yacht's market value decreases over time. For this reason, the most you are allowed to insure your yacht for is its fair market value. In most cases, companies re-evaluate the market value of insured yachts every three years. Therefore, the agreed value listed on your policy will more closely reflect the current market value of your yacht as it ages.

Deductibles
A deductible is the amount of risk that you are willing to assume in case of a loss. The higher your deductible, the lower your insurance premium. Deductibles are usually determined as a percentage of your hull coverage and can range from 1% to 10%. For example, if your deductible is 1% of $100,000 of coverage, you would pay the first $1,000 of the loss. When selecting the deductible on your policy, consider how much financial loss you are willing to assume. Also consider how much premium you could save by choosing a higher deductible amount.

Protection and Indemnity (P&I)
This primary coverage is similar to the liability protection you receive as part of your homeowners coverage. P&I protects you if you are legally responsible for damages to property or injury to someone other than yourself or a family member. P&I can protect you in the event you are sued as a result of hitting another yacht or other sea-faring vessel, or if someone is hurt onboard your vessel because of your negligence. This coverage is written only in conjunction with hull coverage and is not subject to a deductible. It's usually offered in increments of $100,000 up to $1 million or more.

Jones Act coverage
If you employ a captain or crew member, make sure your P&I includes Jones Act coverage. This is a maritime form of worker's compensation coverage which will protect you if one of your employed crew members is injured on your yacht.

Additional coverages
The following additional coverages are offered as part of your basic yacht policy:

• Uninsured Boat Coverage: pays for injuries caused by an accident that you are entitled to recover from the owner or operator of an uninsured boat. This also applies in situations involving an unidentified "hit-and-run" boat.
• Medical Payments: covers up to $1,000 for reasonable medical, ambulance and hospital costs should someone be injured while in or upon boarding or leaving your yacht.
• Commercial Towing and Assistance: You are reimbursed for the reasonable costs incurred when you break down at sea and need a commercial tow to port.

Optional, low-cost coverages
The following separate coverages can complete your protection:

• Hurricane Protection endorsement: shares the costs you incur (up to $500 per occurrence and $1,000 per policy term) if you:
  
  • haul your yacht out of the water because the National Weather Service has issued a hurricane watch or warning for your moorage location. (The resulting costs to relaunch your vessel once the watch or warning has ended are also included.)
  • hire a qualified, professional captain to navigate your yacht to safe harbor as a result of a hurricane watch or warning.
    
• Optional Fishing Equipment: Since most companies do not include fishing tackle as auxiliary equipment, you may want to specifically cover this property if you have some expensive rods, reels or tackle.
• Increase the limits offered for personal property, uninsured boater coverage and commercial towing.

Warranties or limits
Some restrictions may apply to your policy. Here are some examples:

• Pleasure Use Warranty: Most yacht policies require that your yacht be used for pleasure and recreational boating activities only. Coverage for any business use, such as chartering, must be added to your policy (specifying bareboat or captained charter operation) and usually involves an additional cost. Using a yacht to entertain business clients is generally considered to be "pleasure use," provided no money changes hands.
• Navigational Warranty: Most policies restrict the operation of your vessel to defined navigational territories or specific geographic areas. Some examples: New England waters, Great Lakes, inland lakes and rivers, or the Atlantic or Pacific coastwise waters.
• Lay-up Warranty: Some policies are written with a lay-up period in areas where the boating season is limited. For a lower premium, yachts must be "laid up and out of commission" for specific dates on land or in the water, in accordance with the customs of local boat yards. Lay-up means a yacht cannot be used for any boating activities during this period. This warranty makes great sense in Northern climates where boating is hazardous during the winter months. You "winterize" between December 1 and April 1 (time that you wouldn't be sailing anyway!). This way, you don't have to pay for coverage you don't need. A lay-up warranty does not prohibit having work done provided the vessel remains in its lay-up location.
• Seaworthiness Warranty: Most yacht policies provide an all-risk type of coverage, intended to cover loss or damage resulting from an accidental or fortuitous situation, excluding any loss for wear and tear or gradual deterioration. This type of warranty states that the yacht must be maintained in a safe and seaworthy condition in order for insurance to be offered.

Marine Surveys
Prudent yacht owners should periodically have their crafts surveyed by a qualified marine surveyor. Although there are some costs involved, these inspections go a long way toward protecting your investment (resulting in potential long-term savings), as well as ensuring the safety and well-being of those aboard and around your yacht.

Surveys can identify conditions or potential problems which, if not corrected, could spell disaster. Surveyors also occasionally find damage you were not aware of, and which may be covered by your insurance policy!

Most insurance companies require that a marine inspection survey be conducted on yachts every five years.