Insurance can be very confusing for those of us who are not in
the insurance business.
Often, our insurance agents start babbling about liability,
comprehensive coverage, third party liability, and more - and we
feel like they are speaking a language we have never heard
before. Well - in a sense they are.
Again, it is very confusing to those who are not in the
insurance business. Unfortunately, if you are to get the
coverage that you need, at a price you can afford, you must
start learning some of the terminology.
For instance, many people do not understand what the difference
between third party liability insurance and full coverage
insurance is. Third party liability coverage and full coverage
insurance are much the same, but in other ways they are uniquely
different. Before you determine which one you need, it is
important to understand exactly what each type of coverage is.
Third Party Liability Coverage is essentially coverage that
protects you in the event of an accident that is your fault.
It generally covers other people and their property that is
damaged in a covered accident. It does not cover you, your
passengers, your boat, your motor, or your trailer. Furthermore,
third party liability coverage only goes into effect if your
boat is in an accident that occurred when the boat was being
used in a private capacity, as opposed to a commercial capacity.
Third party liability coverage is required by most states, and
each state will have its own requirements as to the minimum
liability coverage amounts that you have.
This type of insurance is generally required whether your boat
is financed or not. Third party liability insurance coverage is
often simply referred to as liability insurance, or in the case
of boats, watercraft liability insurance. Talk to your agent to
find out how much coverage is required in your state.
Full coverage insurance, on the other hand, will cover you, your
boat, your motor, your trailer, and your passengers.
It is often referred to as comprehensive insurance, and it is
available in different coverage amounts, with different options
that are available for the policy. This type of insurance will
be required by most lenders who finance boats, and most lenders
will have their own requirements as to which optional insurance
is purchased.
Essentially, what it comes down to is that third party liability
insurance coverage protects other people and their property in
the event of an accident that is your fault, while full coverage
insurance protects you and your property - in the same way that
the third party insurance protects others.
In fact, full coverage insurance will cover you whether the
accident was your fault, someone else's fault, or even no-fault.
In most cases, it is in your best interest to have both third
party liability insurance coverage - which is required - as well
as full coverage insurance - which may be required if you have
financed your boat.
Again, even if the boat has not been financed, you should
strongly consider purchasing a full coverage or comprehensive
policy. Many people even continue to carry the full coverage
policy long after the boat has been paid off.
Boat repairs are expensive, and anything can happen.
Most full coverage policies will cover you in the event of
mechanical failure, theft, and vandalism, as well as losses
caused by storms, fires, explosions, sinking, and much more.
Talk with your insurance agent to find out about the different
options available for full coverage policies, and make sure that
you get the coverage that you need!
CopyRight Ian D. Major 2005.
About the author:
Ian D. Major makes it easy to understand Boat Insurance,
quickly and easily. Learn all you need to know by visiting:
http://www.the-boat-insurance-directory.com
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