Question: Hawaii’s no-fault insurance law requires every motor vehicle operated in a public area to carry insurance. Is the same true for boats?

Answer: Yes and no. Hawaii’s no-fault insurance law does not require every vessel to carry insurance. Boats kept on a trailer at a private residence are not required to be insured, although it is recommended to protect the vessel owner’s financial interests. If the vessel is moored or berthed in a state-managed harbor or offshore mooring, the state requires liability insurance on the vessel. Many private marinas also require boaters to have liability insurance.

Q: Are there any recent changes in state insurance requirements that boaters should be aware of?

A: Effective Jan. 1, 2014, the state Department of Land and Natural Resources, Division of Boating and Ocean Recreation will require a minimum liability limit of $500,000 to renew all permits for vessels in DOBOR marinas or anchorages. The state DOBOR also needs to be included as an additional insured on the policy.

Q: Do the types of recommended coverage vary on the size of the boat?

A: There are two main insurance coverages for vessels: hull and liability. Hull coverage covers damages to the boat. Liability covers property damage and bodily injury to others. Other available coverages vary by how the vessel is used rather than the size of the boat. Coverage for a boat used for private pleasure would differ from a boat used in commercial operations.

Q: What is typically covered under a boat insurance policy?

A: A recreational boat insurance policy typically covers hull and equipment, liability, medical payments, personal effects, pollution, uninsured and underinsured boaters insurance and towing. Typically, a recreational policy excludes coverage for any activities that generate an income (for example, selling catch, carrying passengers for a fee). A commercial policy would be tailored to include coverage for various commercial activities.

Q: What isn’t covered?

A: Generally the policies exclude wear and tear, grounded deterioration, weathering, bubbling, blistering, osmosis, deterioration of fiberglass or plywood, corrosion, rot, mold, rusting and a few others. Liability also has numerous exclusions. Common exclusions are liability between or among family members, loss of life, bodily injury or property damage sustained while a person is being towed from the covered boat in or on a device designed for flight, such a parasailing or kite skiing. Each policy differs and policyholders should refer to their own policy and read it thoroughly.

Q: Is boating experience factored into the premium?

A: Yes, experience is a key factor in acceptance of the person applying for coverage and the premium. Our companies usually like to see three or more years of experience in the same or similar type and size of boat. Some companies give discounts for taking boating courses or having a captain’s license.

Q: How much should I insure my boat for?

A: Insure the boat for its market value or the purchase price. We usually refer to a marine survey to determine the current market value. Older boats and yachts may require a condition and valuation marine survey (similar to a home appraisal). This is performed by a qualified marine surveyor that is recognized and approved by the insurance company. The survey report describes the boat in detail and establishes the condition, market value and replacement cost of the boat. Recommendations are provided if deficiencies are found. This report helps the insurance underwriters consider and rate the risk. The survey can be done while the boat is in or out of the water, depending on the age and construction on the boat.

Q: What information do you need to get a quote?

A: Generally you’ll need to provide the vessel owner’s contact information and boating experience. You will also need to provide details of the vessel such as year built, manufacturer, model, type of construction and engine horsepower. We have an application that we send to new clients, and depending on the age of the boat, we may ask for a marine survey.

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“Akamai Money” seeks out local experts to answer questions about business in Hawaii. If you have an issue you would like us to tackle, please email it to business@staradvertiser.com and put “Akamai Money” in the subject line.