Consequential Damage
This part of your boat insurance can be vital.
Hurricanes head the list of total claims payouts over the five-year period.
But hurricane activity varies greatly from year to year, and in 2009 and 2010, hurricanes didn't make it into the Top 10 at all. Take hurricanes out, and sinking tops the list. Keeping the water out is a constant battle. Half of all sinkings that occur at the dock happen when some small part below the waterline gives up the fight. The most common culprits include stuffing boxes, outdrive bellows, hoses or hose clamps, and sea strainers. But those parts most often fail due to what insurers call "wear, tear, and corrosion," meaning that the part succumbed to general aging and deterioration.
Most insurers exclude losses from "wear, tear, and corrosion," so they won't pay for the failed stuffing box. But what about your boat that's now sitting on the bottom? Some policies won't cover that, either, because they exclude any "consequential" damage that results from wear, tear, and corrosion. Others will cover the resulting damage as long as it falls into very specific categories, most often fire or sinking.
The most generous policies would cover your boat that just sank, plus the other losses likely to result from a failed part: fire, explosion, collision, dismasting, and grounding/stranding.