Insurance Company

• Find a company that specializes in boat insurance. Consult A.M. Best for financial ratings on any insurance company you're considering, and look to your state insurance department for information about the company's complaint history (see Resources section).
  
  

Hull and Machinery Coverage

• An all-risk policy for the hull and machinery will protect against a wide range of loss causes, including fire, vandalism and damages incurred during towing. How the coverage pays will depend on whether you have an agreed-value or actual-value policy.
  
  

Agreed Value vs. Actual Value

• The difference between agreed value and actual value lies in what will be paid in case of loss. Agreed-value policies set an amount that will be paid in case of loss, typically the original cost of the craft. Actual-value policies pay the book value of the craft at the time of loss.
  You also should review the policy's salvage-coverage clause. Salvage coverage (the cost to rescue your boat from a treacherous situation at sea) should not reduce the amount payable for the boat or repairs.
  
  

Protection and Indemnity

• The personal liability section of your policy pays in the event that you are sued by someone for damages or injuries. It also will cover the legal costs of protecting you in court and any judgments against you up to the limits set in the policy.
  
  

Deductibles

• Unlike auto or homeowners policies, the deductible on boat insurance can be expressed as a percentage of the value of the craft, depending on the cost of the craft. Less expensive boats will have a set deductible, while pricier crafts will have a deductible based on value. As with other types of insurance, the higher you set the deductible, the lower the premium will be.
  
  

Ways to Control Costs

• To keep your insurance costs down, consider setting a higher deductible, take boating courses, keep the boat in good shape and install security or locating equipment.