It is getting warmer and summer is just around the corner. For thousands of Michigan residents it is time to hitch up the boat and head up north. But before you hit the water, make sure to take a look at your boat insurance. Find out what you should know before a boating accident happens this summer.
Michigan law requires all motorized boats and watercraft (including Sea Doos and jet skis) to be registered, but not insured. That means a lot of boaters will likely skip the added annual expense of comprehensive boaters' insurance. The exception may be when the owner is still paying off a purchasing loan. Many banks or lenders will require boaters to carry insurance on the vessel until it is paid off. That way, if the vessel crashes before it is paid off, the bank still gets its money.
Boat insurance may not be mandatory, but it is still a good idea. Depending on the language of your policy, it can pay for injuries caused by a boat crash, cover costly repairs, and even replace the vessel if it is stolen. But not all boat insurance is the same. Look out for these limits on your coverage.
Michigan boat insurance doesn't act like no-fault auto insurance. If you are injured in a boating accident, the insurance company is only required to pay up to a specific benefit cap. You choose the cap when you choose your policy. How much insurance you need will depend on the value of the vessel, the number of people it can hold, and how much you can afford to pay out of pocket in case of a crash. Take a close look at your finances, and your savings, before choosing a low boat insurance benefit cap.
Boat insurance also usually comes with deductibles -- amounts you pay first, before the insurance kicks in. This is similar to the collision coverage on your car or your health insurance. If your boat suffers minor damage, reporting it may cause your insurance premiums to go up, even though the insurance company never pays a dime for the repairs. However, failing to report an accident can sometimes be considered fraud and void your policy. Read the cancellation language in your policy carefully before deciding whether to skip filing a claim.
A high deductible can also put you at risk after a serious boating accident. If you are unable to work because of a boating injury, it could be hard to come up with the $5,000 to $10,000 deductible out of your savings. Be sure to account for a loss of income before opting for a low premium that comes with a high deductible.
Many boat insurance companies offer policies with "disappearing deductibles". This policy language says you will pay less out of pocket the longer you go without making a claim. However, interruptions to your policy coverage (including lapses during the off-season) can reset the clock and cost you more when an accident occurs. While there are other good reasons to continue insuring your boat in the winter, a disappearing deductible can sweeten the deal, even when your boat is sitting in dry dock.
There are lots of reasons to maintain voluntary boat insurance. Even the most skilled sailor can't account for every storm or another drunken boater. Before you take your boat out this season, take the time to double check your boat insurance policy. Make sure it's a risk you can afford.
At Sachs Waldman, we have extensive experience helping boating accident victims recover boat insurance benefits from insurance providers. We can help you understand your policy, and get compensated after a boat crash. Contact our Detroit personal injury law office at 1-800-638-6722.