The agency sells many policies in October and November, boat show season on the East Coast, and at other times of the year when boat sales are high, said Hostetter. April and May periods, since spring is when boat season starts in much of the U.S., he said.

Prospects who know the basic construction specifications of their boats can obtain free quotes on the agency's Web site, jackmartin.com. On the site's “Get a Quote” page, the visitors must provide the manufacturer, model, engine make and horsepower of their vessels along with information such as where they will be navigating, if and when the boat will be laid up in the winter and so forth, said Hostetter. He emphasized that these particulars vary widely. “A sailboat we insure might have a 35 horsepower engine, while a power vessel could easily have 700 horsepower or much more,” he said. A watercraft's fuel is another important underwriting factor, he said. “Gasoline is more volatile than diesel, so diesel-powered vessels usually pay somewhat lower premiums than gas-fueled ones.”

His agency also needs to know a vessel's purchase price, how long the customer has owned the boat, and details about any claims. A first-time boat owner usually starts by buying a comparatively small boat, maybe 23-feet long or so, that he or she will keep an average of four years, then progress to a slightly larger boat, and so on. While it is difficult to generalize, a typical yacht submission might be something on the order of 35 feet in length and valued around $200,000, he said.

Depending on the carrier and the age of the boat, submitting detailed information about the boat's condition is often necessary, he said. To obtain it, the client may need to engage the services of a marine surveyor. “We advise the client to select a marine surveyor who has expertise with the type of vessel to be insured, since surveyors often specialize,” he said. A marine surveyor assesses a vessel much as a home inspector would examine a house. “Just as a home inspector might appraise a house's foundation for cracks or its plumbing for leaks,” said Hostetter, “so a marine surveyor will check the boat's hull for structural problems and its electrical systems for malfunctions.” While a burst pipe in a home can be a nuisance, a ruptured fuel line on a boat could lead to disaster. To keep insureds safe, most carriers require a marine survey when a boat is 10 years old and another every five years after the initial one, he said.

Besides looking at the essential machinery, the surveyor will appraise the condition of the boat's auxiliary equipment, which can be extensive. A boat's amenities, Hostetter said, are bound only by its owner's imagination and credit limit. “Many vessels come equipped with depth finders, ship-to-shore radios and the like. It's not uncommon for boaters to add radar, GPS units, chart plotters and expensive home entertainment equipment,” he said.

Even the most expensive and best equipped top-of-line vessel, however, can be a liability in the hands of an inexperienced or careless boater, said Hostetter. Consequently, boat insurers want to know how much boating experience owners have and their past claim experience. “Our clients generally have many years of boating experience,” he said. “Some have even taken Coast Guard or Power Squad-ron boat operation courses, which will lower their boat insurance premiums.”

Where a vessel is docked and operated also affects the premium. Although the type of facility at which the boat is kept–in an open-air marina or in an enclosed metal shed, for example–usually doesn't have a large effect on an insured's premiums, the geographic location of the facility does, said Hostetter. “Due to the recent rash of hurricanes in the South, many carriers have raised premiums on boat insurance and added larger windstorm deductibles on policies in the Southeast and Gulf Coast,” he said. Despite the increase, many of Hostetter's clients still prefer to moor their boats in, and cruise through. Southern waters. “We address these customers' special insurance needs during the submission interview,” he said.

Hostetter said a customer he recently spoke with–not a very experienced boater–was going to use his boat in North Carolina, although he bought it in Florida. The two talked about the necessity of having a captain bring the vessel north. The captain would have to stay aboard the boat until the insurer was satisfied that the boat's owner was knowledgeable enough to safely operate the vessel, he said. Hostetter also explained to the customer that there were potential liabilities he could have by virtue of having that captain aboard, which could be covered by endorsement.

Most of the agency's insurers limit their coverage to a navigational area defined in the policy, said Hostetter. “Ninety percent of our clients use their vessels for inland and/or coastal cruising. Most choose protection and indemnity (P&I) limits of $300,000 or $500,000, he said, which includes pollution cleanup coverage as well.

For the few clients who have needs beyond the basic coverage, the agency accommodates them through endorsements. “If a client wants to take his vessel to Newport, R.I., from the Chesapeake Bay for a boat show, within a few days of notification we can generally write an endorsement to cover the trip,” Hostetter said. If the same client wanted to sail his boat to, and vacation in, Bermuda, however, the endorsement would be more difficult to acquire, but not impossible.

Even with endorsements, however, a boat insurance policy may not cover all the liabilities an insured faces, said Hostettter. “The typical yacht policy, after all, is not a maintenance policy. It has exclusions for wear and tear, gradual deterioration and lack of due diligence in the maintenance of the vessel,” he said. Certain types of hull damage, in particular, may be excluded. This may pose a problem when blisters, a common complication in older boats, occur, said Hostetter. “The hull of a boat may blister for a variety of reasons that have little to do with the maintenance of the boat. Blisters often are not a serious structural problem, but they can be expensive to repair. Insurance companies won't pay for blister repair because they are generally not a result of a sudden and accidental event; they form over a number of years, he said.

While many of Jack Martin & Associates' customers call their carriers directly to report claims, the agency also accepts claims. Boaters use their vessels mainly on the weekends, however, when the agency is closed, Hostetter noted. Consequently, the agency gives insureds toll-free numbers to report claims to their carriers outside of office hours.

A lifetime at sea taught Hostetter that at times boating is a diversion, but it is always a responsibility. Proper boat insurance not only compensates owners for loss, he said, but it also saves lives by ensuring that boat owners undergo the training and perform the boat maintenance necessary to navigate safely. Hostetter said that he will sail the Chesapeake Bay this spring with confidence, knowing that his customers, some of whom may be on the waters with him, share the same conscientious approach to boating that he does.

Damon Hostetter is a yacht specialist at Jack Martin & Associates, in Annapolis, Md. After graduating from the U.S. Naval Academy, Hostetter served two tours of duty in Vietnam as a gunnery officer, operations officer and navigator. Hostetter began his insurance career in 1993 with Zurich Insurance Co. and joined Jack Martin & Associates in 2003.