Canceling Your Boat or Motorcycle Insurance for the Winter Is Never a Good Idea

If you’re looking to save money on your boat or motorcycle insurance in New Jersey, one thing you don’t want to do is cancel coverage over the winter. You need the protections it affords year-round. Whatever small savings you might realize are far outweighed by the potential costs in your ability to get insurance, in the higher amount of premiums you’re likely to be charged, and of course in the amount of personal assets, current and future, that you stand to lose.

Risks Are Year-Round

“People sometimes forget or overlook the risks associated with a motorcycle or boat even when you’re not operating it,” said Harold Soden Jr., an Insurance and Risk Management Advisor with the Oliver L. E. Soden Agency in Jamesburg, an independent insurance agency. “Theft, vandalism, fire, or flooding can happen at any time of year. Without comprehensive insurance coverage, the expense of repairing or replacing your damaged or lost vehicle is entirely on you.”

Canceling Coverage May Not Be Your Choice

If you’re financing your boat or bike, off-season cancellation may not even be an option. “Lenders typically require a certain level of coverage throughout the year to protect their investment until the loan is paid off,” said Soden. If you store your boat at a marina, you might also be required to have certain coverages. Most contracts for boat storage contain provisions aimed at shifting the marina’s risk and limiting their liability.

Other Sources of Insurance Coverage Limited or Unlikely

It is unlikely that your homeowners policy will be of much help in repairing or replacing damage to or loss of a motorcycle or boat stored on your property. Before making any decisions involving changes in your boat or bike insurance coverage, consult with your independent insurance agent so you are clear about what risks are covered in your homeowners policy. “Homeowners policies protect structures and contents, but specifically exclude coverage for certain recreational vehicles — including motorcycles and many boats,” Soden said.

Fees and Penalties

Some insurers charge fees or penalties for dropping insurance “midterm” (before the full coverage period expires). Talk with your agent to learn if your policy will accrue midterm coverage penalties and weigh that against your perceived savings prior to making any decisions.

Your Insurance Record and Risk Rating

Lapses in insurance coverage — any period when you don’t have motorcycle or boat insurance — can make it harder to get the coverage you need going forward. Insurers look at many things when deciding whether to insure you and how much to charge in premiums. Consistency of coverage is one of those factors. It is also possible that the coverage lapse can inflate your premium.

Motorcycle and boat insurers don’t take too kindly to cyclical policy cancellations and renewals. The practice of continually dropping your coverage in the off-season may result in your insurance company dropping your policy.

Alternatives to Boat and Motorcycle Insurance Cancellation

Although it’s recommended to keep your boat or bike insurance for the winter, it might make sense for you to drop some parts of your coverage or raise deductibles to save money during periods of infrequent use.

Your insurer may offer a "lay-up" policy in which coverage for damages sustained while operating your vehicle, like liability and collision, is temporarily suspended. Under a lay-up policy, you maintain comprehensive coverage for non-use-related damages such as theft or fire.

One caveat that Soden offers bikers when discussing this option is, ”If there’s an early spring thaw and extended stretch of days that are perfect for riding, you won’t be able to take advantage of the weather.” Riders for whom this may be a concern should know that some motorcycle coverages include a “sunny day clause” that allow the insured one day of liability coverage during the lay-up period.

Also keep in mind that your insurer won’t necessarily remind you that it’s time to switch back to full coverage, and there may be a waiting period for full coverage to be reinstated once you do request it.

Consult Your Agent

Whenever you’re looking for ways to save on boat or motorcycle insurance, start by consulting with your independent insurance agent, Soden advised.

Independent insurance agents, like Soden, work with multiple insurers (12 boat/bike and 45 overall for his agency) which gives them insight into variations in rate-setting criteria and helps simplify the insurance shopping process — e.g., applicants need to fill out only one form. His agency also works with clients to determine their needs and liability exposure (earnings and assets they need to protect) to craft a policy that adequately addresses their individual needs.