Three Ways to Reduce Insurance Costs

If you think about it, the number one reason we buy insurance is to save money. It makes far more sense to pay a small monthly or annual premium and be protected against what could amount to huge expenses should something ever go wrong. The trick is to balance having enough coverage to protect your interests, while still keeping your premiums as low as possible.

Happily, it is possible to reduce your insurance costs while maintaining strong coverage. Here are three easy ways to keep more money in your wallet.

1. Take a Safe Boating Course

Just as you can reduce the cost of your automotive insurance by taking driving lessons, you can save money on your boat insurance by completing an approved safe boating course.

Many insurers offer significant discounts to boaters who have successfully completed operator competency training from recognized providers like the Power and Sail Squadrons or the Coast Guard Auxiliary. These comprehensive courses will make you a safer and more confident boater, and ultimately reduce your chances of having an accident that could result in a claim. And although the course itself costs a few bucks, it’s only a one-time expense. You’ll enjoy the insurance savings year after year.

2. Take a Higher Deductible

Another way to reduce your insurance cost is to speak with your broker about increasing your deductible.

Most marine policies have a relatively low deductible, which is the amount of money that you will have to pay out of pocket before an insurer will cover any expenses. If you agree to a higher deductible amount, you reduce the insurance company’s obligation and that, in turn, can lower your premiums.

Opting for a higher deductible is another way to lower your insurance premiums. By negating the risk of smaller claims, insurers may be willing to offer a corresponding discount.

For example, if you raise your deductible from $1,000 to $2,000, your insurance company knows there is now zero chance of you filing a claim for damages under that amount. Your premium can be reduced because you’re no longer using the coverage that used to exist down to the $1,000 level.

Talk with your broker to determine what amount of deductible makes the most sense for you and your boat.

3. Insist On All-Risk, Replacement Cost Coverage

There are many different types of boat insurance coverage. When you buy insurance, always insist on all-risk replacement cost coverage. While the premium will cost a few dollars more, this level of protection will save you thousands if and when you ever file a claim.

As its name suggests, all-risk coverage protects your boat against everything. You’ll never face the nasty surprise that comes with finding out your policy didn’t actually cover lightning strikes, for example, leaving you on the hook for a huge repair bill.

Because replacement cost policies don’t consider depreciation, you won’t face the significant extra costs that often result when repairs need to be made to older boats or engines. For example, if you destroy your four-year-old engine and need to replace it with a new one, most policies will only cover the value of a four-year-old motor. If the new engine costs more (and it always does), you have to pay the difference out of pocket. That doesn’t happen with replacement cost coverage – it replaces one engine with the other regardless of the difference in value. So even though it costs a little bit more, all-risk replacement cost insurance can save you a fortune.