Liability Limits - Whats what?

One of the two major reasons why I decided to start this blog is to have a platform to deliver educational information surrounding powerboat insurance. My hope is through my short posts you gain further insight into how to adequately protect yourself from an insurance standpoint as you shop and procure an insurance policy for your boat. I hope you find my short posts beneficial.

Obviously, the other reason I am here is to earn your business. I am a firm believer that business doesn't just come to you, as a professional you need to earn it.

Through various forums and social media platforms, I have discovered that there is a lot of misconception out there surrounding insurance policies, what they entail, and what they cover. While I can not speak to your policy specifically, I can give you a general understanding of what each policy coverage means.

Bodily Injury and Property Damage Liability (BI/PD) covers your legal liability for an accident that involves injury to another person or damage to someone's property, up to the limit of liability you select. Tip: TAKE THE HIGHEST POSSIBLE AMOUNT AVAILABLE (even if you have your asset titled in an LLC).

Example: You are at fault for an accident that injured another boater and damaged another boat. The other boater's total medical bills were $5,000 and the damage to the other boat was $8,000. Your BI/PD limits are 15/30/10, so all injuries and damages would be covered because they fall within the BI/PD limits you selected. Injuries to the other person were less than $15,000, and the amount for all injuries was less than $30,000. The other boat's damage also was below the $10,000 Property Damage Liability limit. The limits used in this example are grossly low and for demo purposes only. It is recommended to carry NO LESS than $300,000 Combined Single Limit on your boat policy.

Medical Payments (MedPay) coverage pays the cost of necessary medical care you receive as a result of a boating accident and can be used regardless of who is at fault. Covered people include the named policyholder and anyone in the boat at the time of the accident. "MedPay" also will pay for injuries caused while water skiing or tubing (unless your policy has a watersports exclusion - double check).

Example: You sustain $1,000 in injuries from a fall off your boat when you turned too quickly. You do not have any health insurance, which means you can use your MedPay coverage, up to the $1,000 limit you selected, for your injuries. Same would apply to your passengers.

Fuel Spill Liability coverage is included with Bodily Injury/Property Damage Liability (BI/PD) coverage. Fuel Spill Liability covers unintentional oil or fuel spills resulting in bodily injury or property damage for which you are legally responsible because of an accident arising out of the ownership, maintenance or use of your insured boat. It is suggested that you cover your state's legal statutory limit for this line item.

Uninsured/Underinsured Boater Bodily Injury Liability coverage pays for medical treatment, wage loss and other damages you would have received from the other person's insurance company, had they been insured. Damages are covered up to the limit of coverage you select.

Example: A boater who has no insurance bumps your boat when he is preparing to dock, which causes you to fall out of your boat and break your ankle on the planks. Your medical bills total $5,000 because of the injury. Your Uninsured Boater limits are $20,000/$40,000, which means your injuries fall within your Uninsured Boater limits and will be covered.

The above are the main components of the liability side of boat insurance coverages. There are further sublimits and/or endorsements and exclusions a carrier could add to alter a primary policy form but the above are the nuts and bolts to help you gain a better understanding.

Be safe out there!