Boating insurance coverage is, for the most part, similar to most other insurance policies. However, there are some distinctions that are VERY different. Typically, there are four types of insurance for a boat:
- Hull – covers the body of the boat
- Cargo – covers what is in the boat other than people
- Freight – covers the profit from a cargo
- Protection and Indemnity (P&I) – covers everything else, including injuries to passengers and crew
Modern insurance actually started with marine insurance. Lloyd’s of London was one of the first institutions to create insurance for ships traveling the ever-expanding world. In fact, the first marine insurance law ever was the English Law of Marine Insurance in 1575. The US originally adopted its first marine insurance laws from England, but slowly changed and instituted new laws to suit its needs.
Today, marine insurance is has adapted to be very similar to automobile insurance. Like auto insurance, the policy is able to cover damage to property and bodily injury. Marine policies also offer UB/UIB options. UB/UIB stands for uninsured or underinsured boaters. These policies kick in when the “at fault” party, or person who caused the accident, does not have adequate insurance to cover your bodily injuries. I will discuss the necessity of having these policies in a little bit.
The main difference between marine and automobile insurance is what is called “limitation of liability.” This little wrinkle of marine insurance allows for the insurance company to limit its liability (or requirement to pay) to the value of the vessel. For example, if your 28-foot center console is t-boned by a Jet Ski, the insurance for the Jet Ski can be limited to the value of the Jet Ski. Now comes the really heinous part, that value is also limited to the value AFTER the collision. So if the Jet Ski is totaled, you are likely not going to be able to be reimbursed anything for your damages, both property and bodily injury. This is where UB/UIB insurance would kick in and why it is SO important to have this included in your policy. There are ways to fight a limitation of liability from happening, but it is an uphill battle.
The attorneys at LaBovick Law Group know the ins and outs of marine insurance. We have a team of maritime injury attorneys specifically dedicated to boating injuries. If you need a maritime lawyer or have been injured on the water, call today for a free case evaluation.