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Personal Marine Insurance: 3 Considerations to Keep Your Clients Afloat

New to personal marine insurance? Here are three key considerations for agents when looking to write a personal marine insurance policy.
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personal marine insurance: 3 considerations to keep your clients afloat

As the summer months approach and more people are wetting their feet in recreational boating, it's imperative that boating clients have the coverage they need for a safe summer on the water.

Personal marine insurance is unique when compared to other lines of insurance coverage and both agents and clients need to be cognizant of its nuances to ensure their coverage does not leave them adrift if an accident were to occur.

“With the influx of people who are new to boating and don't know that much about insuring a boat, we've seen a similar trend of agents who are new at writing them," says Rick Stern, boat product manager, Progressive. “It's really important for agents to understand how to write a quality boat policy that meets their client's needs."

New to personal marine insurance? Here are three key considerations for agents when looking to write a personal marine insurance policy:

1) Valuation. Whether clients own a small boat or a yacht, every personal marine vehicle is unique and has unique risks that come along with it.

“Boat insurance is usually written on an agreed value basis. Therefore, agents should ask how much the customer paid for the boat," Bryant says. “Further, agents should follow up by asking what additional items they installed after purchase. Insurers want to know the total investment made by the insured."

For newer boats, determining the value may not be a problem, “but for clients who might be switching from one insurer to another, determining current market value can be more of a challenge," Stern says. “While the client's boat might have been worth $25,000 five years ago when the current policy was written, it's no longer worth the same today when they ask for a new policy from a different insurer. However, going online to sites like NADA and Boat Trader can help the client value their boat."

When dealing with older boats, “it is vital for agents to read the entire policy and review the policy warranties with the insured," Bryant says. “Insurers that specialize in difficult risks are able to do so by including provisions in contracts that require the insured to maintain their boat with a higher degree of care than what might be required for a brand-new vessel. These warranties void coverage if broken, so they must be reviewed in detail."

2) Individual attention. No two clients are the same, and agents should pay particular attention to each client's boat and its usage.

“Recreational boats are not like cars, where a VIN number can tell the insurance company the necessary information about the vehicle's features and price," says Matt Bryant, senior broker, marine, Burns & Wilcox. “Most boats are customized by the dealer or factory where customers can choose different motors, electronics packages and comfort accessories. Thus, two boats with the same make and model can be sold on the same day at vastly different prices."

Personal marine policies vary significantly and finding the policy that provides the coverage a client needs cannot be a one-size-fits-all scenario. While many boat owners may consider adding a small boat to their homeowners policy, advising on the pros and cons of this can ensure key coverage is not missed. 

Additionally, “agents should ask about all the ways the customer plans to use the boat so all scenarios can be considered," Bryant says. “If the customer plans to bring paying passengers aboard, coverage must be modified. If the boat will be used by the customer's business—aside from simple client entertainment—it must be discussed with underwriters and the policy must be endorsed appropriately."

“Boat insurance products are not like others, as there is a tremendous difference in policy forms," Bryant adds. “The industry does not rely on ISO policy language so each carrier's policy will be different. There is more than price involved, and agents should seek to select the right policy based on the customer's circumstances."

3) Technological advances. Consumer demand for new boats has skyrocketed over the past few years, particularly as newer technology is making boating more accessible for clients who are inexperienced boaters.  

“Agents need to make sure that the value of all that technology is included in the value of the new watercraft when the policy is written," Stern says. “The dealer purchase order should list the total value correctly, even if some of the tech was added on at the dealership."

Working “with companies that have in-house marine specialty experts and partnering with experts in the local market will help to ensure your customer will receive the right products and services to enjoy their boat and protect their investment," says John Beachley, national product line director, yacht at Intact Ocean Marine.

Being attentive and adapting policies to meet each client's needs is a life preserver.

Olivia Overman is IA content editor.