Boat Insurance
In North Carolina, summers involve outings to lakes, rivers and the ocean. From 1996 through 2000, there has been
an average of 194 boating accidents in North Carolina reported annually. Insurance can protect not only the
physical damage to your boat but also the liability created by at fault accidents while using your boat.
This guide is intended to be an aid in the understanding of your insurance policy, but it is not a substitute for your
policy contract. In all instances, your written policy contract language will prevail. It is to your benefit to always
read the initial issue and subsequent renewals of your policy.
Insurance Policies for Watercraft
These policies are commonly referred to as boatowners policies and yacht policies. Boatowners policies are
typically used to cover smaller watercraft (usually less than 26 feet), and yacht policies are generally provided to
cover larger, more expensive watercraft. The coverages usually provided by boatowners and yacht insurance
policies are physical damage, liability and medical payments. Uninsured boat and employers liability insurance
might be available as well.
These policies are not standardized like the automobile and homeowners insurance policies are in North Carolina.
Each policy can be different and it is advisable to read your policy carefully to make sure you are satisfied with your
coverages.
Physical Damage
Most physical damage coverages are based on the "Actual Cash Value" (ACV) of the boat and motor. An ACV
policy pays the boat's current replacement cost minus depreciation. An insurer may offer an "Agreed Value" policy
that pays for replacement or repair without depreciation based upon the agreed-to value of the boat. Physical
damage coverage typically allows for the repair or replacement of your boat if it is damaged or destroyed by fire,
theft, lightning, vandalism, collision or windstorm (including damage from hurricanes and tornadoes). Covered
items include the boat itself, inboard and outboard motors the boat's trailer, and may include some personal property
kept aboard the boat. However, your personal effects (items not used in the normal operation of your boat and not
permanently attached) are not covered. Some insurance companies offer separate coverage (requiring an additional
premium) for fishing equipment, cell phones and computers that you use aboard the boat.
Liability
Your liability coverage will pay for bodily injury and property damage for which any covered individual becomes
legally responsible. This coverage generally includes a provision to remove or destroy a wrecked or sunken vessel, if
required by law. The boatowners and yacht insurance policies may also contain a “life salvage” provision, which
will reimburse the costs incurred by others to save the lives of insureds involved in a boating accident.
Medical Payments
This coverage pays for reasonable and necessary medical and funeral expenses due to a boating accident. The
coverage is usually limited to $1,000 per person; however, the limit may be increased for an additional premium.
Coverage Available Under the Homeowners Policy
Your homeowners policy covers personal liability and medical payments involving the ownership, maintenance,
loading and unloading of a boat. This coverage, however, is limited to:
• boats with inboard or inboard-outdrive motors equal to or less than 50 horsepower not owned by an insured,
• boats with inboard or inboard-outdrive motors with more than 50 horsepower not owned by or rented to an insured,
• boats with outboard motors equal to or less than 25 total horsepower,
• boats with outboard motors with more than 25 total horsepower not owned by or rented to an insured,
• sailing vessels fewer than 26 feet, or
• sailing vessels of more than 26 feet not owned by or rented to an insured.
Motorcycle Insurance
North Carolina motor vehicle law requires all motorcycle and motor scooter operators to purchase liability insurance
for their vehicles. A valid insurance card must be kept with the motorcycle or scooter or carried by the operator at all times.
Be aware that insurance premiums can be costly and physical damage coverage may be difficult to obtain for a high
performance motorcycle or if you have a poor driving record. Check with an insurance agent for a premium quote
before buying a motorcycle or a motor scooter. You do not want to find out after purchasing your vehicle that you
cannot ride it because you cannot afford the insurance or it is not available.
Miscellaneous Type Vehicle Endorsement
In North Carolina, motorcycles along with golf carts, travel trailers and similar types of vehicles are covered by the
“Miscellaneous Type Vehicle Endorsement.” This endorsement, when attached to the Personal Automobile Policy,
will allow your vehicle to be considered a covered auto and extends insurance coverages to your motorcycle named
in the declarations.
Liability Coverage
Your liability coverage will pay for bodily injury and property damage for which any covered individual becomes
legally responsible. The Personal Automobile Policy will cover you or any family member while using your
covered vehicle and any person using your covered vehicle with permission. The policy will pay up to the limits listed in your policy.
Mandatory Limits
The insurance policy must include at least $30,000 per person/$60,000 per accident for bodily injury liability to pay
claims to those whom you cause death or injury. It must also include a minimum of $25,000 per occurrence property
damage liability, which pays for vehicles or property damage for which you become legally liable.
Medical Payments Coverage
This coverage pays for reasonable and necessary medical and funeral expenses due to an auto accident. Individuals
covered under this coverage include:
1. You or any family member while occupying any auto, or as a pedestrian when struck by a motor vehicle; or
2. Any other person while occupying your covered vehicle or any vehicle (private passenger auto or trailer) driven
by you or a family member.
The policy will pay up to the limits listed in your policy for each individual injured.
Collision/Other than Collision (Comprehensive)
Collision means physical damage to your covered vehicle caused by an impact with another vehicle or object. This
coverage pays the lesser of the cost of repair or actual cash value (replacement cost less depreciation) of your
vehicle.
Other than Collision coverage handles damages arising from falling objects, fire theft, hail, glass breakage, contact
with animals, etc. This coverage typically has a lower deductible (if any) than Collision coverage.
Uninsured/Underinsured Motorists (UM/UIM) Coverage
Uninsured Motorist (UM) Coverage will provide protection when an uninsured driver, who is at-fault, injures you
or another covered individual. It also provides property damage coverage.
Underinsured Motorists (UIM) Coverage will provide protection when an underinsured driver, who is at-fault,
causes injury to a covered individual. An underinsured driver is one whose limits of Liability are less than your
UIM limits and not enough to cover the losses of the people they injure in an at-fault accident.
UIM coverage does not provide protection against property damage. Collision coverage would pay for property.
The UIM coverage will pay a maximum of the difference between the other driver’s Liability limits and your UIM limits.
