Hurricane Insurance Coverage for Your Boat – What You Need to Know

Atlantic hurricane season runs from June 1 to November 30 each year. If you keep your boat in an area impacted by hurricanes and other major storms, it’s important to make sure the vessel’s marine insurance policy provides sufficient coverage for any potential damage – and that you’re aware of any windstorm-related deductibles, restrictions, and requirements it may contain.

Marine insurance policies on boats located in hurricane zones typically include specific windstorm-related sections, and these tend to vary from insurer to insurer. Here is a list of important items to double-check in your policy or ask your insurance provider.

Where’s the boat?

Some boat owners in hurricane zones lower the cost of their boat’s insurance policy by agreeing in the contract to move the vessel out of state or beyond a particular geographical limit (like Georgia’s northern border) during hurricane season. If that’s the case, the owner must comply with this provision before June 1 and be ready to show proof the boat is out of state if the insurer should request it. (They do check.)

What’s the plan?

Many boat insurance policies require a detailed hurricane plan be in place for the vessel in the event a named or major storm is forecast for the area. The plan should include where the boat will be berthed or stored and how it will be secured. Owners may be required to provide written proof of their marina’s windstorm procedures or produce a hurricane haul-out contract in advance. It’s important to note that in the past, snowbird owners who lived in a different state from the one where their boat was stored during hurricane season could designate a local person to be responsible for ensuring their hurricane plan was carried out. Today, few insurance providers allow that practice.

What’s covered?

Most boat insurance policies include comprehensive (hull) and engine coverage in the event of physical damage to the vessel, but it’s important to check the special windstorm provisions section to determine whether damage caused by wind gusts, storm surge, flying debris, dock collapse, collision with unmoored vessels, and other hurricane-related incidents is covered. In addition, the policy may or may not provide the following:

• • Haul-out and re-launch reimbursement
  • Trailer coverage (often covered by a separate policy)
  • Towing and assistance
  • Salvage and wreck removal.

What’s in a name?

Marine insurance policies for boats in hurricane zones typically include separate “named storms” deductibles that are often much higher than the standard deductibles for non-windstorm-related incidents. Names storms are any tropical or subtropical cyclone that receive an official name designation (like “Katrina”) from the National Hurricane Center. Instead of a flat deductible fee, named storm deductibles usually are calculated as a percentage of the vessel’s insured value, such as 2%, 5% or even 10%. For a million-dollar yacht, that means an owner with a 10% hurricane deductible must pay $100,000 before receiving any reimbursement for storm damage.

Where’s the proof?

When a named storm is forecast, an owner’s hurricane-preparations should include removing any loose valuables from the boat and photographing any fixed assets that remain, such as electronics. Save all receipts proving that insurance requirements like moving or securing the boat, haul-out or storage were complied with in a timely fashion, and photograph or videotape the process. As the saying goes, a photo may be worth a thousand words – or thousands of dollars.

The most important thing to remember about boat insurance is that it’s there to help the owner repair or replace the boat in the event it is damaged or destroyed by a hurricane. Riding out the storm on board to try to save the vessel is never worth anyone’s life.