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It is a reasonable question; “What does this boat insurance policy cover?” I always remind everyone that no two boat insurance policies are the same but this is a basic overview on how physical damage (comprehensive or collision) is covered by a boat insurance policy.

Boat insurance policies are normally written using an “all risk” policy form. Do not think “all risk” means everything is covered. “All Risk” means that all damage to the boat is covered unless specifically excluded. So, when you have an “all risk” policy you need to review the policy exclusions to see what is covered. Think of the oddest situation you have experienced as a boat owner. With an “all risk” policy, if it is not specifically excluded, then it is covered.

What is excluded?

All boat insurance policies have exclusions. The excluded items vary from company to company but generally include loss caused by wear and tear, gradual deterioration, weathering, insects, mold, animals and marine life. Some companies include coverage for damage caused by zebra mussels; others do not. Additional excluded items may include marring, scratching or denting, osmosis or blistering, manufacturer’s defects or defect in designs, and corrosion.

Most policies also exclude items having a latent defect that causes damage to your insured property; however, resulting damage may be covered. Some boat insurance policies have machinery damage exclusions and others do not.

Consequential Loss

It is important to remember that most boat insurance policies read, “Loss resulting directly or indirectly from…” So if a boat sinks resulting from wear and tear then the entire sinking is excluded unless the policy includes Consequential Loss Coverage. Click here to read about consequential Loss.

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