Let’s Talk About Boat Insurance

If you own a boat you want to ensure your boat is fully protected.

A homeowners insurance policy may only provide limited coverage. Additionally, if you file a claim for your boat, it may affect your homeowners insurance premium. Purchasing a separate boat insurance policy can lessen the risk to your homeowners policy.

Boat Insurance Policies

A separate boat insurance policy will provide tailored protection for your boat. These policies are typically obtained to cover smaller watercraft (26 feet long or less), and yacht policies are provided to cover larger, more expensive watercrafts. There are two basic parts of a boat insurance policy:

  • Physical damage protection – covers accidental loss or damage to the boat hull, motor(s), and any other equipment used to operate the boat.
  • Liability (Property and reimbursement) coverage – covers legal obligations to third parties such as bodily injury, death, and damage to someone else’s property.

Types of Physical Damage Coverage

In the event of a loss to your boat, the amount of money you receive from the insurance company may depend on the type of policy you buy and the age and condition of the boat.

Depreciation is the decrease in value of an object over time due to wear and tear, and some types of insurance policies factor this into your settlement. The types of loss/settlement options include:

  • Agreed Value Policy – this type of policy covers the boat based on its value when the policy is written. This policy tends to be more costly, but depreciation is not included in the settlement of the claim. This is the recommended type of physical coverage.
  • Actual Cash Value Policy – this type of policy is less costly but takes depreciation into account in the event of a claim.
  • Replacement Cost Policy – provides coverage to return your boat to its pre-accident condition or better.

In addition to ensuring physical damage and liability protection for your boat, check with your Aitken & Ormond agent to see what optional coverages are offered by insurance companies.

Boating in Michigan

We live in a state where boats cannot be used year-round. It is important to understand any storage requirements on your policy. You may be required to store it inside, and freezing, ice damage, and damage caused by certain vermin may not be covered.

There may also be navigation limits on where you are allowed to take your boat. If you plan to use your boat other than on the Great Lakes, read your policy and consult with your agent to ensure your policy will cover it.

Be Prepared in Case of a Claim

When you start a new policy on your boat, it is important to take pictures to document the condition of your boat. You may also want to consider having a survey, so you have a written report of the boat’s condition. This may help prevent issues in the event a claim is filed for physical damage.

Contact your Aitken & Ormond Insurance Agent to find the right policy so you can relax and enjoy Michigan’s beautiful lakes this boating season.


The above description provides a brief overview of the terms and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverages. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.

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Are you ready to save time, aggravation, and money? The team at Aitken Ormond Insurance is here and ready to make the process as painless as possible. We look forward to meeting you!

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