Top boating dangers? Fraud and theft

One of the most important decisions is choosing "agreed value" or "cash value." If your boat is destroyed and you have an agreed-value policy, the insurance company will pay you that amount. However, if you have cash value, the insurance company will pay the boat's current estimated value, so the amount of money you're entitled to will decrease as the boat depreciates. An agreed-value policy costs more, but the extra money is worth it, should you want to replace your boat.

Similar in many ways to auto insurance, boat policies usually include:

• Medical payments coverage if you or a passenger is injured.

• Liability protection if you're at fault and injure yourself or someone else in a boating accident, or if you accidentally collide with someone else's boat.

• Physical damage or loss, regardless of who is at fault, in such instances as a collision with another boat or object, a damaging storm or a theft. This type of protection might also cover you for emergency repair services, towing, and damage to boating equipment, radios or sports equipment. Other physical-damage provisions can cover damage while your boat is on the road, stored or parked in your yard.

To protect yourself if you're in an accident caused by someone who does not have boat insurance, you can also purchase uninsured-boater coverage, which will pick up whatever that person's insurance coverage would have paid for. Fuel-spill liability coverage will pay costs associated with fuel spills that unintentionally lead to bodily injury or property damage.

As with other types of insurance, boat insurance makes use of deductibles. The higher the deductible you take, the lower your insurance premium will be. Typical boat-policy deductibles, according to the Insurance Information Institute, are $250 for property damage, $500 for theft and $1,000 for medical payments. Discounts often are available for taking a boat-safety course, upgrading safety items on board or insuring a new boat.

Keeping it safe

Once it's insured, safeguard your boat by following these theft-prevention tips:

• Be careful where you store the boat. "Check out the storage place, talk to the other owners that are there and look at the facilities compared to other facilities in the area," says Glass. Your best bet is a locked garage, secured boat storage yard or a well-lighted, fenced area. Most stolen boats are on trailers and are swiped from driveways, streets and motel parking lots.

• Use a trailer-hitch lock if your boat is stored on a trailer.

• Chain and lock outboard motors to the boat.

• Disable the ignition system with a kill switch or by removing the plug wires or distributor cap on an inboard.

• Use a specially designed boat alarm system.

• Lock it up and remove the keys when not in use.

Video: Test your insurance knowledge

Other things you can do to protect your boat: Secure it with a locked, steel cable, and always lock its cabins, doors and windows when you're not using it. Also, get an alarm system and use it when you're not on board. And when you know you're not going to use the boat for a long period of time, you can also shut off fuel lines or remove the battery to deter thieves.

A boat can provide hours of pleasure and can be one of the most enjoyable investments you can make. By taking a few precautions, you can enjoy that investment with as little long-term impact on your wallet as possible.

This article was reported by Tamara E. Holmes for Bankrate.com.

Updated Sept. 23, 2009

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