It’s every boater’s nightmare – an unexpected storm puts you and your crew in an emergency situation, requiring rescue by the Coast Guard as the boat is blown up onto the rocks.

Depending on your insurance situation, that may not be the end of your nightmare, but only the beginning. Of all the costs a boater might face, expenses for salvaging a boat or recovering a wreck can easily top them all. Worse still, these fees may not be covered by your insurance policy.

Contrary to popular belief, when your boat goes down or is wrecked on a shoal, you can’t just call the insurance company and walk away. You still own the boat, which is now a hazard to navigation and a potential environmental issue. The responsibility of removing it and cleaning up the mess is yours and yours alone.

No Problem! I’m Covered For Emergency Tows!

While many boat policies will include coverage for emergency towing, not all include provision for salvage. Towing and salvage are completely different things in the eyes of an insurance company. They’re also different things to the Coast Guard, and under the terms of maritime law.

Sunken Boat

Proper insurance can cover you against the cost of environmental pollution resulting from an incident with your boat. While it may not cost too much to raise a boat that sunk at the dock, the cost of cleaning up spilled fuel could be substantial.

Towing coverage is intended to cover the cost of a tow back into the marina should your vessel experience engine trouble at sea. Salvage, on the other hand, generally refers to recovering a vessel that has run hard aground. Check your policy or call your broker to determine your level of coverage.

Good News! They Saved The Boat!

It starts off well – the salvage company got the boat off the rocks, and apart from a few scratches there’s no real damage at all. Good news, right?

Perhaps. But since there was no real damage to the boat, the insurance company could decide that you’ve suffered no real loss, and refuse to pay for anything. Unless you have a policy that specifically covers it, that would leave you on the hook for the salvage bill, which could come out to thousands of dollars.

Ensuring that your policy specifically provides coverage for salvage can save you from this messy situation, by providing a clear basis for a claim.

Bad News! The Boat’s A Write-Off!

It starts off badly – the salvage company couldn’t get the boat off the rocks in one piece because it was so badly damaged in the storm. It’s a complete write-off.

While your boat insurance will cover replacing the boat, you could still be on the hook for the cost of clearing away the old wreck, along with the cost of cleaning up any fuel spills or other environmental damage. That’s a bill that could easily run into the tens of thousands of dollars.

Insurance coverage for salvage usually (but doesn’t always) include provisions for this worst-case scenario. It’s a good idea to speak to your broken and confirm that your policy does include a provision for not only salvage costs, but also wreck removal and environmental mitigation. This usually falls under protection and indemnity coverage.

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