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Compass F inan ce
Now that you’ve found your dream boat, you need
to insure it. Don’t simply go with the broker’s
recommendation; do your homework by contacting a
number of insurance agents.
TEXT BY BILL LINDSEY
There are many factors to take into account when choosing boat
insurance. This includes knowing if the company is financially solvent.
Insurance companies are prohibited from filing for bankruptcy under
the federal bankruptcy code; if they do go under, the government
usually steps in. This is the purpose of state-run insurance guaranty
associations. This, however, doesn’t assure you a complete bailout.
Most of the associations have “per claim” payment caps; you need to
know your policy’s limits. Go online to review the company’s Standard
& Poor’s or A.M. Best rating to assess the company’s financial security.
Choosing an agent is equally important. You want someone who
can help you determine the level of risk you can afford, based on
your assets. Look for someone who can easily explain the legal
aspects of the policy, such as deductibles, exclusions, limitations,
negative bounds, claim denials and more. Search for an agent with
significant experience in marine policies as opposed to one who
mostly covers cars and houses, and is less likely to devise a policy
that covers all contingencies. The agent plays a critical role in the
event you ever have to file a claim, so make sure yours will represent
your interests; do an online search to see how they are viewed by
their existing clients.
Several factors will determine the quote you receive, including prior
boat ownership, holding a USCG captain’s license and your credit
rating. Most insurance companies review credit/income ratios when
determining boat insurance rates. Canceling any cards you don’t use
may help lower the rate you pay. At a minimum, a good credit score
will provide access to a wider selection of insurance companies.
Next, start the process of securing insurance as soon as you
can. While some policies have been written in as little as one hour,
it’s best to plan on 48 hours to one week between submitting an
application and a policy being issued. If a survey is needed, the
timeframe can easily expand to 2 weeks or longer. Resist the urge
to fudge the facts; don’t make your boating history sound better
on the application than it is. If you file a claim and the insurance
company discovers any of the application info was fraudulent, they
may deny all coverage.
Once you have a policy, read all renewals thoroughly to make sure you
know if deductibles, coverages, and exclusions have changed.