Peer-to-peer, apples-to-oranges Insurance offerings vary significantly from platform to platform, and in many cases, from boat to boat.
For example, Boatsetter provides the BoatUS Peer-to- Peer Boat Rental Policy and on-water assistance through TowBoatUS with every rental.
On the other hand, other companies, like GetMyBoat, require the boat owner to hold the appropriate insurance.
Click&Boat, a European P2P platform, requires boat owners to have their own insurance for boat rentals and offers optional assistance, repatriation, and cancellation insurance to renters.
To further complicate things, there are also important differences between P2P boating insurance and recreational boat owner's insurance. During the rental you could be subject to different insurance terms than what you may be used to. For instance, the geographical area you're permitted to boat in is likely to be different. Boat owners and renters should do their due diligence and understand their insurance coverage before renting P2P.
Questions A Boat Owner Should Ask
According to Boatsetter, in 2018 the average owner grossed $4,600 in rental income on the platform. It's one way to offset the costs of moorage and maintenance, though regional and demand differences make that figure vary widely.
If you're thinking about renting your boat out on a P2P rental platform, here are the insurance questions to ask:
Does my existing insurance cover rentals?
Almost all recreational boat insurance policies prohibit rentals, which leaves boat owners with two other options. The first is through a platform like Boatsetter that provides P2P insurance.
Many platforms, however, do not offer insurance or recommend insurance providers.
Essentially the only other option is to get a charter policy that allows for bare-boat charters. Otherwise you and your renter may not be covered at all. These types of policies are typically more expensive and harder to find.
How will my boat be valued in case of a total loss?
One of the marked differences between P2P policies and recreational policies is how the boat is valued in the case of a total loss (e.g., major fire, sinking).
The majority of folks have agreed value policies on their boats, but the P2P policy is an actual cash value policy. The difference is that an actual-cash-value policy accounts for depreciation.
Let's say the agreed value on a recreational policy is $30,000. That's what would be paid out if the boat is a total loss. If you have a total loss during a rental, which is covered by a P2P policy, the value will be based on actual cash value. If the market industry reference material (BUC or NADA) says that boat is worth $25,000, that's what would be paid out. So when your boat is used in a P2P program, the insured value may be less.
"With that said," Pellerin continued, "there are very few total-loss claims that we see come through the peer-to peer program. Most losses are things like striking submerged objects, striking the ground, hitting the dock, and dock rash scenarios."
How much liability insurance do I need?
The BoatUS Peer-to-Peer Boat Rental Policy provides up to $300,000 in liability coverage, which is comparable to most recreational policies. "With recreational policies, the majority of people carry a $300,000 limit," said Pellerin." However, depending on your risk tolerance, you may want to buy supplemental insurance.
Pellerin suggests that high-net-worth owners may want to ask how much liability coverage the P2P policy is providing and then check with their homeowners or umbrella insurance to see if there are any additional limits available.
Is my boat safe, and am I meeting regulatory requirements?
"It's the owner's responsibility to make sure that the boat is equipped with all legally required safety equipment, everything is operational, and the boat is seaworthy," said Pellerin. "They should be doing a quick safety check and walk through with the renter."
Ensure your boat has all the required safety equipment.
Request a trip plan.
Do a detailed walk through and test drive with renters.
Create your own "renter's manual" with safety and basic boat operation checklists, emergency contact information, and what to do in case of an accident.
Consider additional insurance that may increase your liability coverage on the water (e.g. umbrella and homeowners insurance).