A boat can be a great investment. Not only could you sell it in the future if you choose to, but a boat can also be used as a way to relax and spend time with family and friends, improving your overall quality of life. Of course, theft, accidents, and even weather disasters can affect your boat, causing enormous financial and emotional distress.

While not required by most states, boat insurance is something to consider. Even though it may be an added expense you did not plan for, insuring your boat will be a worthwhile investment. This guide will provide you with a few factors to consider when choosing the right policy to insure your boat with.

Rates

Again, if you have recently bought a boat, you may want to spend your money on excursions and fuel so you can enjoy your new toy. However, you should remember the added cost of boat insurance is an investment you should make. Thankfully, there are many options to consider, all with different rates, so your boat will have some coverage even without spending a fortune.

There are many factors that will affect your insurance premiums. For example, the age and value of your boat play a big part in determining your insurance rates. A newer, more expensive boat will cost more to insure since the insurance company will need to pay out more to replace or repair a boat if stolen, destroyed, or damaged.

Other factors that influence the insurance rates include its location and how the boat is used. If stored at your home, it will cost less to insure compared to storing the boat at a dock, especially if it docked near the ocean.

If you live on the boat, the cost will be higher to insure because the insurance company will not only need to insure your boat, but also all of your personal belongings inside it.

The way your boat is used will also affect premium rates. The insurance company will want to know if the boat is used for commercial purposes (fishing, for example) or recreational purposes (fishing for fun, water sports, etc.) Speed boats will be more expensive to insure since accidents are more common because of the ability to drive faster, compared to pontoon boats, which are slower and used more for relaxing.

Finally, the overall coverage you choose will affect the insurance rates. The more coverage you want and need, the higher your insurance premiums will be.

Types

Most people are surprised to learn how many different types of insurance policies specifically designed for boats are available. Knowing the differences will help you determine which one is right for you, your boat, and your finances.

Hull insurance is a popular choice because it covers not only repairs to your boat but also repairs if your boat damages another boat or another person's property. If your boat has been deemed a total and complete loss, the insurance company will pay out the total value of your boat.

If you believe you may need liability coverage for incidental damage caused by fuel spills, towing, or medical expenses, consider purchasing a third-party liability insurance policy. If your boat is docked at a marina, you may be required to have this type of insurance in addition to basic insurance on your boat. If you have a larger boat, you may need to add special yacht insurance coverage, as well.

It is also important to note that if you are using your boat for commercial purposes, such as fishing or touring, additional coverage will be required to protect your boat, business loss, and passengers.

From a basic policy to a more involved policy that covers each and every aspect of owning and operating a boat, insurance is essential. Contact a company like Veronica's Auto Insurance for more information.