Misconceptions About How We Price Your Boat Insurance Premium


As a recreational boat insurance company, we use many factors when determining premium costs. But sometimes, it can be confusing what these factors actually are.

Here’s a further look at boat insurance premiums and some common misconceptions boaters have about their premium calculations. 

What is an insurance premium?

First and foremost - what exactly does premium mean? An insurance premium is the amount of money an individual pays for an insurance policy.

» RELATED: Insurance Premiums and Deductibles - Explained

How do premiums work?

Insurance premiums are typically paid annually, with the option to enroll in automatic payments. This helps to avoid a lapse in coverage.

The actual dollar amount will vary based on the type of coverage obtained and any applicable risk factors specific to the individual boater.

What determines the premium amount?

Premium is largely based on the information provided in your application. Here are some of the key factors used when setting your boat insurance rate.

  • Age
  • Driving record
  • Claims history
  • Location
  • Experience
  • Type of watercraft
  • Type of coverage
  • Coverage limits
  • Amount of coverage
  • Seasonal usage
  • Storage method
  • And more...

» MORE: How to Save on Insurance Premiums

Misconceptions about how we price your premium

With multiple factors influencing rates, it is no surprise that many boaters aren’t entirely sure how their premium is determined.

Here are some common misconceptions:

Misconception #1: Credit History

Credit scores are known to be a popular measure of creditworthiness. They are frequently used as a valuable point of reference for getting a credit card, applying for a loan, renting an apartment, etc.  

Contrary to popular belief - this is not something SkiSafe considers or even looks at when calculating your annual premium. While different boat insurance companies will have their own formulas for determining rates, we do not believe your credit history should impact your insurance rate. 

Misconception #2: Vision History

Many boaters believe that a history of eyesight impairment can increase your premium. Rest assured - for those who need to wear glasses or contacts, you won’t be penalized with higher insurance rates because of it.

Misconception #3: Salary 

While some insurers will commonly ask about your employment, your income will not impact the premium. Your salary does not always provide the full picture and should not be used to determine financial standing or overall responsibility.

Boat Insurance Premiums FAQs

Does everyone have the same premium?

No. Your coverage and rate are specific to you. 

When we offer coverage, we consider all the perils and risks you may face. Based on that information, we assess the risk associated with that coverage to determine your rate. This process is referred to as underwriting.

Who gets a higher premium?

In the world of insurance - the more expensive something is, the more it will cost to insure. This means that larger, more valuable boats will generally have a higher premium than smaller, expensive ones. 

The insurer undertakes more risk with a higher value watercraft and higher policy limits. With a covered claim, for instance, higher valued watercraft will cost more to repair or replace. This is reflected in the annual premium costs.

What can lower the boat insurance premium?

Applying a discount to the policy can help to reduce costs without reducing coverage. Eligibility for these discounts will depend on things like your experience, location, driving record, and more.

How is SkiSafe different from other insurers? 

SkiSafe differs from other insurers in several ways. Our company exclusively services the boating community, which means our policies are more tailored and personalized to the individual boater.

In addition to flexible coverage options, personalized service, and competitive pricing, the SkiSafe underwriters are seasoned experts within the boating industry. Many are boat owners themselves. They will analyze and evaluate customer needs to ensure the right coverage is provided. There is no “one size fits all” mentality.

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