Overlook This Insurance and Risk Financial Ruin

As summer approaches, it’s important to think about the potential risks associated with water sports and other recreational activities. While we previously discussed the importance of homeowners insurance, it’s also crucial to remember the value of watercraft insurance. Many people overlook this type of coverage, but it can be essential in protecting your finances in the event of an accident or damage to your boat.

Watercraft insurance serves two main purposes. Firstly, it can help cover the cost of repairs or replacement if your boat is damaged or stolen. Secondly, it can provide liability coverage if someone is injured while on your boat, or if you cause damage to someone else’s property while operating your boat. Even if your boat isn’t worth a lot of money, it’s still important to consider the risks associated with water sports and the potential for accidents.

This advice extends beyond watercraft, too. It’s important to consider insurance coverage for all “toys” such as four-wheelers, dirt bikes, dune buggies, and other ATVs. Tragic accidents can happen to anyone, and families can have devastating financial consequences without adequate insurance coverage. Judgments in lawsuits can often be in the hundreds of thousands, if not millions, of dollars.

Your best protection is to work with your homeowner’s insurance agent to determine the appropriate coverage for each item. Even if you only use these recreational vehicles briefly during the year, accidents can happen instantly, and it’s important to be prepared.

Additionally, it may be worth considering an umbrella liability insurance policy to provide additional coverage. This type of policy raises your underlying coverage by $1 million or more, and while it’s relatively inexpensive, it requires coordination with your underlying limits and deductible.

According to Kelly Byrne, V.P. of JH Berry Risk Services, it’s crucial to have the right insurance coverage for boats and personal watercraft, such as Jet Skis, Sea-Doos, and Wave Runners. However, getting a Personal Umbrella Liability Policy can be even more essential. This policy offers extra liability protection, with an annual cost as low as $150-200, and can be increased in increments of one million.

When evaluating your needs, here are some tasks to consider:

  • Create an inventory of all your “toys,” including seldom-used items.
  • Request your agent to provide liability insurance.
  • Assess the need for additional coverage as recommended.
  • Think about adding an Umbrella Liability Policy for added protection.

Don’t miss The Welch Group’s Money Tuesday segment every Tuesday morning on WBRC Fox 6 for valuable weekly insights.


professional photo of certified financial planner Stewart Welch wearing black suit and red tieStewart H. Welch, III, CFP®, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books, including 50 Rules of SuccessJ.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaireand 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. For more information, visit The Welch GroupConsult your financial advisor before acting on comments in this article.



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