Recently retired insurance agent here. It amazes me how many people focus on the cost of their insurance and ignore the coverages. Start with your household’s net worth. This is what you can lose if you’re sued and you lose. Round up to the next million dollars and that is what your Personal Liability Umbrella Policy (PLUP) should be for.
Example: you have $1 million equity in your home(s), $1.5 million in retirement savings, other investments worth $1 million, you should have a $4 million PLUP.
In order to have the PLUP, most insurance companies will then require certain liability limits on your other policies. For example, auto policies might be 250/500/100 and boat insurance at $1 million.
Find a company with outstanding claims service, then find a good agent that represents them. If you go with an independent agent, don’t change companies every couple of years to get a slightly better rate. The better companies reward long-term loyalty with discounts, lowered deductibles or other perks.
I represented State Farm and I happen to think they are the best. My wife and I are staying with them as we know their claims service is outstanding. There are other good companies, of course, and there are lots of lousy companies as well.
Finally, remember that liability coverage has nothing to do with the value of your boat. It covers how much damage the boat can do. A crappy, beat-up $5,000 boat can catch fire at a dock and destroy several million-dollar boats. That’s why many marinas require a minimum of $1 million in liability coverage…
