Boat insurance can give you peace of mind while you’re out on the water. Boat insurance helps cover damage to your boat and can protect you financially if an injury arises from a covered loss, so you can sit back, relax, and enjoy the water with less worry. In this article, we’ll go over the basics of boat insurance: what does boat insurance cover, what does it not cover, do you need boat insurance, and the factors contributing to the cost of boat insurance.  

What can boat insurance cover?

The two main components of boat insurance are property coverage and liability, but it can also include medical payments, uninsured coverage, and optional add-on coverages.

Boat liability coverage

Liability coverage helps cover costs if you are found responsible for personal injuries or property damages to another party. Boat liability can cover incidents that occur while you are driving your boat; for example, if you were to collide with another boat and cause damage to it and/or cause injury to its passengers. Liability coverage helps cover the costs associated with those damages or injuries as well as legal fees if you are sued over an accident. Learn more about liability insurance here

Many docks and marinas may require you to carry a certain amount of liability coverage in their contracts. Liability is often a high financial burden, sometimes costing hundreds of thousands of dollars in the case of severe damage or injury, so having boat liability coverage can be important to protecting your assets.

Boat physical damage coverage

Physical damage coverage helps cover the cost of damages to your own boat in the case of collision with another boat or submerged object. You should consider a policy that has coverage for damage occurring from a covered loss both in the water as well as on land (like in storage). Some companies may even offer coverage while the boat is in transit. Check with your insurance provider to see that you have the coverage to suit your needs.

Your reimbursement for damages after meeting your deductible will be calculated using actual cash value or replacement cost value, depending on the terms of your policy. In the case of a total loss, a policy with actual cash value would reimburse you for the value of your boat as determined at the time of the loss, up to the limits of your policy. This will also take into account the depreciation. Replacement cost value typically reimburses you based on the current market value up to the limits of your policy. Replacement cost value plans generally have higher premiums but compensate you for a higher value.

Read: Do you have enough boat insurance?

Medical payments coverage

Most boat insurance policies include medical payments coverage, which helps cover the medical bills for you and your passengers if you are injured in a boating accident. This is not liability insurance; it only covers your own party’s medical bills, not a third party’s injuries or damages.

Uninsured Boater coverage

If someone else runs into your boat and is at fault, they are responsible for the costs associated with injuries sustained by you and your passengers. Their liability policy will help if they have boat insurance. But what if they don’t have insurance? Even if you take them to court, getting compensated can take a long time – if they ever pay at all. That’s where uninsured coverage steps in. If an uninsured boater causes injury to you or your passengers your uninsured coverage can help cover costs related to your injuries.  

Boat add-on coverage

If there’s any additional coverage you’re looking for, check with your insurance advisor before you make your purchase to see what optional boat endorsements are available to you for an additional cost.  For example, depending on your situation you might be looking for personal property coverage, which may protect certain belongings on the boat such as life vests and fishing gear.

Check out more optional boat insurance add-ons to consider this summer

What does boat insurance not cover?

Boat insurance does not usually cover regular wear and tear, heat damage, corrosion, overuse, mold damage, damage from aquatic life, or manufacturer defects or faults. It also will not cover any acts committed intentionally, like purposeful damages to your boat or someone else’s boat. Check out these 8 common boat insurance exclusions for more info.

Do I need boat insurance?

Only three states require boat insurance: Arkansas, Utah, and Hawaii[1]. You may also be required to carry boat insurance if you have a loan out on your boat or dock or store it at a marina that requires boat insurance.

Still, even if it’s not legally required you should still consider boat insurance. Boating accidents can be a significant financial burden, particularly if you are found liable for injuries or property damages to another party. If you don’t have boat insurance, you would be entirely responsible for paying all damages out of pocket. This can rack up thousands of dollars in damages and sometimes up to hundreds of thousands, especially if liability for personal injury is involved.

Does my homeowners’ policy cover my boat?

Some homeowners’ insurance policies can cover small watercrafts, like canoes or sun sailboats. However, even if your home insurance covers these boats, the coverage is likely capped at a small amount (often no more than 10% of the home’s insured value) and it does not include liability coverage (unless you have an endorsement or applicable umbrella policy). Larger and faster boats, like yachts, speedboats, and sailboats, typically need a separate boat insurance policy.

Own a home near where you boat? Check out this guide to homeowners’ insurance in coastal areas.

Is boat insurance expensive?

The cost of insurance is dependent on several key factors:

  • State: states with longer boating seasons or more coastlines tend to cost more (i.e. boat insurance is more expensive in Florida than Montana typically)
  • Type of boat: inboard, outboard, cruiser, fishing boat, performance, utility boat, etc. can all vary in price
  • Actual cash value versus replacement cost: how much you would get compensated in the case of a total loss (usually, actual cash value has lower premiums but lower payouts, while replacement cost has higher premiums but a higher payout)
  • Age of boat: older boats tend to come with more risk, so they are typically more expensive to insure
  • Speed/horsepower/engine type: faster boats can be riskier and thus may have higher premiums
  • Length/size: larger boats generally cost more to replace and repair, so insurance premiums can be higher
  • Condition: boats in poor or unkempt condition can be riskier, so insurance can be higher
  • Usage: how often it is used, where it is used, and how it is used, are factors impacting premium costs
  • Location of operation and anchorage: oceans, lakes, bays, rivers, etc. all come with their own risks and challenges, factoring into premiums
  • Boat owner experience and past claims: more experienced boat owners with a solid boat ownership history will generally have lower premiums than new or inexperienced boaters
  • Deductible: lower deductibles equal a higher premium, but with a lower deductible, you will be responsible for less out of pocket expense in the event of covered loss.

Can I lower my boat insurance costs?

There are a few ways you may be eligible for a discount or credit on your boat insurance. Some examples include:

  • Having a clean driving and boating record
  • Having Coast Guard-approved fire extinguishers and other safety features on board
  • Completing boating and water safety courses
  • Bundling your boat coverage with your home and auto insurance
  • Reading this article about the 12 Ways to Save On Boat Insurance

The easiest and most effective way to get a great deal on your boat insurance while still ensuring you are getting the coverage you need is to chat with an InsuraMatch advisor. InsuraMatch advisors are consultants focused on finding you the boat insurance to meet your needs. Get a quote online right now or call (844) 232-2700 to speak with a licensed insurance advisor.