Lake season: a boat insurance checklist for Nevada and Utah

Lake season in Nevada and Utah follows the water temperature. Lake Mead, Lake Mohave and the Colorado River below Hoover Dam are busy from spring, and Lake Powell stretches the season into autumn. Farther north, Bear Lake, Jordanelle, Deer Creek, Utah Lake, Flaming Gorge and the Nevada shore of Lake Tahoe open later and close sooner. In each place the boat leaves storage, the trailer goes back on the highway and the policy that sat quietly all winter starts carrying real exposure again.

This checklist is for the week before the first launch. It covers what the season does to boats, what a boat policy responds to and what it leaves out, the work to do before, during and after a trip, and the decisions that matter most.

What the season does to boats

Desert reservoirs create hazards that a coastal boater would not expect. Water levels on Lake Mead and Lake Powell move a long way from year to year, which closes ramps, exposes reefs and leaves old channel markers in the wrong place. A grounding on a rock that was ten feet under water last season is a typical claim. Afternoon winds build quickly on open water, and summer storms can raise whitecaps on Lake Powell or Lake Mead in minutes.

The mountain lakes bring different problems: cold water that turns a capsized kayak or a fall from a wakeboard into a medical emergency, crowded no-wake zones, and summer holiday traffic at the ramps. Both states also run inspection and decontamination programmes for quagga mussels, and a boat that skips a required inspection can be held at the ramp, which is an access problem, not an insurance one, but a costly weekend either way.

Which policy responds, and which does not

A boat or personal watercraft policy is the main policy for nearly everything that happens on the water. The rest of the household's insurance plays a smaller part than people assume.

• Hull damage: collision with another boat, a grounding, a dock strike, fire, theft and storm damage are paid by the physical damage section of the boat policy, on an agreed value or actual cash value basis.
• Liability: injuries to other people and damage to their boats or docks are paid by the boat policy's liability section. A homeowners policy covers liability only for small, low-powered boats, and the thresholds vary by carrier and form.
• Your own passengers and family: medical payments coverage on the boat policy pays their medical bills regardless of fault, up to its limit.
• Uninsured boaters: uninsured boater coverage, where offered, pays when another boat without insurance injures someone on yours. Whether a private boat has to carry liability insurance is a state matter that depends on the kind of boat, and the Nevada Division of Insurance and the Utah Insurance Department can say which boats it applies to. Where it is not required, uninsured boats share the water with yours.
• Wreck removal and fuel spills: if a boat sinks, the owner may be ordered to remove it and clean up spilled fuel. Boat policies commonly include wreck removal and pollution liability, often with their own limits.
• The trailer and the tow vehicle: the auto policy covers liability while towing; damage to the trailer needs its own coverage, usually added to the boat policy.
• Wear and mechanical failure: an engine that fails from age, lack of maintenance or a missed winterisation is not covered, although some policies cover resulting damage or offer a mechanical breakdown option.

Before the first launch

Pull out the declarations page and check the following.

• The lay-up period. Some boat policies suspend or reduce coverage for months named on the policy when the boat is expected to be out of the water. If the season is starting early, make sure the policy knows.
• The navigation area. Policies name where the boat may be used; a trip from Lake Mead down the Colorado or into another state is usually fine, but check.
• The operators. Tell the carrier about new or young operators. Utah and Nevada each set their own boater education rules for certain operators, usually by age and type of craft, so check the state's boating rules before a young operator takes the helm.
• Towed riders. Confirm the policy covers people being towed on skis, wakeboards and tubes; some forms exclude them unless endorsed.
• Upgrades. New electronics, a wake tower, speakers or ballast systems added over the winter should be scheduled or reflected in an agreed value.
• The marina or storage contract. Slip and dry-storage agreements often require the owner to carry liability and sometimes to name the marina as an additional insured; read the contract before signing it.
• Safety gear and the boat itself. Life jackets, fire extinguishers, a working bilge pump and a sound hull are both legal requirements and the things an adjuster checks first.

During the trip: rentals, lending and houseboats

Lending a boat or a personal watercraft to a friend is an insurance decision. The owner's policy usually follows the boat when used with permission, so the owner's claim record and limits are on the line. Some policies restrict operators by age or experience, and a borrowed jet ski ridden by a teenager outside those restrictions can leave the owner without coverage.

Houseboat and boat rentals on Lake Powell and Lake Mead follow the rental company's contract, which normally makes the renter responsible for damage up to a deductible or a damage deposit, sometimes with an optional damage waiver. A personal boat policy may or may not extend to a rented boat, and a homeowners policy generally does not cover the liability of a large rented houseboat. Ask the carrier before the trip, not at the dock.

Suppose a family rents a houseboat, and a gust pushes it onto a submerged rock, tearing the hull for $30,000 of repairs. If the rental contract makes the renter liable for, for example, the first $5,000, and the family bought no waiver, that $5,000 is theirs unless a personal policy they carry extends to rented boats. If the houseboat also damages a neighbouring boat for $12,000, liability coverage becomes the question. These figures are hypothetical.

After a grounding, collision or injury

Priorities are the same on every lake.

• Account for everyone aboard and anyone in the water, and call for help on the radio or phone; rangers patrol the big reservoirs.
• Keep the boat from sinking or drifting further if it can be done safely; policies expect reasonable steps to prevent more damage.
• Photograph the damage, the location and the water conditions, and note GPS coordinates.
• Report accidents with injuries or significant damage to the state or federal agency responsible for that water; each has its own reporting rules and time limits.
• Exchange details with other boaters involved and collect witness contacts.
• Report the claim to the carrier promptly, and do not haul out for repairs without its agreement unless the boat is at risk.

The decisions that matter

Four choices decide how a bad day on the lake works out. Agreed value against actual cash value for the hull, which matters most on a boat that is several years old. A liability limit that fits a household with a home and savings, with the boat listed on any umbrella policy. Medical payments and uninsured boater coverage, both inexpensive relative to what they pay. And an explicit answer from the carrier on towed riders, rentals and lent watercraft.

Suppose a wakeboard boat worth $80,000 is insured at actual cash value and is sunk at the dock by a storm. If the carrier values it at $65,000 after depreciation, the owner absorbs $15,000 plus the deductible; an agreed value policy at $80,000 pays that amount less the deductible. These are hypothetical figures; the valuation basis is the line to read.

If the policy already answers all four questions well, keep it. If not, we compare boat, trailer and umbrella coverage across the carriers we represent in Nevada and Utah at no cost, and we tell you when no change is needed.