Alabama Boat Insurance

But, there are a few things you should know about protecting your vessel before you start cruising to have complete peace of mind. No matter how responsible of a boater you are, you can’t control everything on the water. From the elements to the actions of others, damage and danger are never too far away.

That’s why boat insurance is an always-wise and often affordable decision. Let’s break down everything you need to know about boat insurance s in Alabama, including potential costs, when it’s required, and what factors insurers consider before covering you.

If you understand how your vessel is protected, you can better understand the risks that can affect your policy. Although it may vary a bit by company, boat insurance in Alabama can generally be divided into two categories: liability protection and physical damage protection. Both together can be considered comprehensive boat insurance. 

For boaters, liability insurance covers damages you may cause in accidents. If you collide with someone, your boat liability policy can cover the medical expenses (if you injure someone) and property damage you’re at fault for.

Many liability policies also include coverage for fuel spills. If your boat discharges oil or fuel after an accident, the damage it causes may be covered by your insurer. Wreckage removal may also be included in your policy, which allows your insurer to help cover the costs of raising or removing your wreckage after an accident. Check the specifics of your plan for when these coverages may come into play.

You can usually purchase liability limits in increments of hundreds of thousands of dollars with many insurers capping out at $1 million in coverage. But, you may be able to get more depending on your carrier, or you may need a sort of umbrella policy.

Liability insurance can be useful in many scenarios, and it can be purchased on its own without comprehensive coverage. But, know that without a comprehensive boat insurance policy, you’ll be left to pay for any damages your boat sustains on your own. Liability insurance only covers the damages you cause to others.

Comprehensive insurance covers the value of your vessel at all times. If your boat sustains damage in or out of the water, your insurer can cover the cost of repairs. Typically covered damage includes that from fire, lightning, sinking, and vandalism. Comprehensive boat insurance also covers theft if your boat gets stolen entirely.

Damage from severe weather, like hurricanes, tornadoes, and hail, is usually covered, too, but with some further stipulations. You may also have different deductibles depending on the kind of damage you sustain. For instance, your wind damage deductible may be different from your collision deductible in your policy.

The prime boating in Alabama comes with some drawbacks. The severe weather risks in the state can affect your insurance policy. Alabama has an unfortunate susceptibility to hurricanes, tornadoes, and hail. Even though many comprehensive boat policies cover damage from severe weather, you’ll need to double-check with your provider to be sure of the circumstances when you’re covered.

For instance, your insurer may want you to take certain precautions before a known hurricane hits, like hauling your boat and storing it. If you fail to do some basic action to prevent your boat from experiencing some damage, your insurer may not cover the damage. Also, your insurer may not want you to take your boat into Florida or parts of the Caribbean during hurricane season.

Your insurance company understands that there’s little you can do if your boat is stored properly and a tornado decimates the marina, so you shouldn’t have an issue being covered from tornado damage as long as you have wind protection in your policy. 

Hail coverage may be a bit trickier.  If you suspect that a hail storm damaged your boat, you should check immediately. If minor dents or cracks go unnoticed, they could lead to bigger issues down the road that your carrier may not want to cover. They could contend that if you had taken action immediately, the damage wouldn’t have been as costly which could affect the amount they’re willing to reimburse you.

In addition to weather concerns, some policies have general navigational limits outside of which you won’t receive coverage. While you should always be covered for inland boating in the many lakes and rivers around Alabama, your policy may not cover you if you travel a long distance offshore. Common navigational limits are 75 miles or 125 miles. Some territories, such as Mexico, may be excluded from policies altogether, too.

Vacation homes are relatively common in Alabama, which means absentee ownership may also be a factor in your boat insurance. Some companies may not want you to leave your boat unattended for months at a time if you travel out of state since there’s no one to prevent thefts or mitigate damage. They may raise your rates if you plan on this.

The state of Alabama has no law requiring personal boat insurance, but you still may need it at times to satisfy certain lender or marina requirements. Some marinas or boatyards in the state may require you to have a liability insurance policy on your boat before you can store it at their place.

Also, lenders typically require you to have a comprehensive boat insurance policy on your vessel if you’ve financed it so your lender can recoup their investment in your boat from your insurance company if it suffers damage.

Alabama doesn’t mandate any vessel owners or operators to have boat insurance. Instead, there are many rules and regulations you need to follow for boat registration and boater safety. Satisfying these requirements may go hand in hand with insurance at times, though, making a boat insurance policy a logical and wise choice.

For example, nearly all motorized vessels need to be registered with the state in Alabama. One of the reasons you’re required to register your boat is so authorities can use your hull identification number and information to try to track down your boat. If your boat doesn’t get recovered, a comprehensive boat insurance policy would reimburse you for your boat’s value.

Also, boaters in Alabama may need to take certain safety courses before operating a vessel. Many insurers offer discounted premiums to policyholders who have taken safety courses.

There are also some boat accident requirements in Alabama. If you’re operating a boat that is involved in a collision on the water, a report must be filed for any accident involving any of the following:

If you’ve caused an accident resulting in one or more of these consequences, a boat liability policy could help cover your expenses. And, comprehensive boat insurance would cover damages to your boat whether you’re at fault or not.

Rates vary greatly based on many factors, but you can expect to pay at least around $200 a month for boat insurance in Alabama. The larger and more expensive your vessel is, the more you’ll pay generally. Premium factors include your boat’s age, make, and size, as well as your method of storage, types of policies and coverages you want, and much more.

Here’s a breakdown of a few important factors that influence the cost of boat insurance in Alabama:

Vessel age and size: Generally, the bigger your boat, the more expensive it is to replace. Thus, the more you’ll pay for comprehensive coverage. Also, vintage or unique older boats could be more expensive to cover than a similar-sized modern equivalent because the older boat could have rare, valuable parts not easy to replicate in repairs.

Method of storage: The way you store your boat can affect your premiums. Storing your boat inside, like in a locked garage, can reduce the chances of weather damage and theft. This is good for the insurance company, and many carriers will reward you with lower rates for doing so.

ACV vs Agreed Value: One of the most direct factors that can influence your Alabama boat insurance premium is the way you cover your boat in your policy. Boat insurance plans are usually written with either agreed-value coverage or actual cash value coverage. 

Agreed-value coverage protects your boat at a value you and your provider agree on when you get your policy. This is typically the fair market value of your boat at the time of binding. Your boat is then covered for this amount for the life of the policy.

Actual cash value coverage factors in depreciation. Your boat’s value will decrease with time, which means you’ll get smaller payouts the older your vessel is. Actual cash value coverage provides less reimbursement, but it’s usually the more affordable option.

Optional Coverages and Add-ons: Depending on your carrier, you can add some protections to your policy that may increase your premium. Some insurers offer coverages like emergency towing, mechanical breakdown coverage, fishing equipment coverage, and uninsured boater coverage.