What to Know About Boat Insurance

If you own a boat or are thinking about getting one, you likely associate it with fun-filled days on the water in the company of family and friends. But your boat is also an investment and a liability. You need to protect it — and yourself — from damage, theft and accidents. That’s where boat insurance comes in.

Boat insurance, often referred to as a marine insurance policy, provides peace of mind, knowing you’re covered should the unfortunate or unforeseen occur. Let’s take a closer look at boat insurance, and whether you need to speak to your insurance agent about coverage.

What Is Boat Insurance?

Boat insurance is an insurance policy that covers property damage or liability expenses related to your motorized watercraft. It’s usually distinct from a homeowner’s insurance policy, even if the boat sits on a trailer in your side yard.

Depending on the level of coverage you choose, a boat insurance policy serves two main purposes. It pays for loss or damage to the boat, and for damages or injuries to others related to boat usage.

Do You Need Boat Insurance?

If you have any kind of motorized watercraft, whether it’s a small fishing boat or an expensive ocean-going vessel, you almost certainly need boat insurance.

Wallace & Turner Insurance Producer Ben Galbreath says “if it has a motor, you need to consider at least liability coverage. The larger the motor, the more risk you will take on legally … If you are financing a new boat, your lender will require that it be insured.”

Galbreath also notes that if the boat is stored in a marina or other privately owned location, the owners will almost certainly require the boat be insured.

These requirements are in place to cover damages to your boat, but the other important reason is liability. If someone is injured near your boat, a marine insurance policy covers some or all expenses that could otherwise be devastating for the boat owner.

“Carrying boat or yacht insurance is a smart decision that can help protect your financial well-being,” says Todd Shasha, managing director of personal insurance product management for The Travelers Indemnity Company.

Galbreath adds that while non-motorized boats such as canoes and kayaks usually don’t require an insurance policy, they should at least be added to an existing homeowner’s policy. That’s especially true if you keep the boat at a cabin or holiday home. “If you are loaning out the canoe or kayak to someone,” he says, “you’ll need liability coverage, at a minimum.”

How Does Boat Insurance Protect You?

Shasha explains that boat insurance coverage depends on your state, your insurance company and the coverage options you choose. Standard options typically include:

• Physical damage. This includes damage caused by collisions with another boat or a submerged object.
• Liability. If you cause an accident with your boat or someone is injured while aboard, the bodily injury or damage to the property of others is covered.
• Personal property. If the boat sinks, your items, such as phones, cameras and fishing gear may be covered.
• Towing and assistance. Per Shasha, this includes “reimbursement for emergency transportation of your boat to the closest repair facility when it’s inoperable, gas delivery (but not the cost of the gas) and roadside assistance reimbursement.”
• Theft. Most boat insurance policies cover theft of the boat itself, but might not cover theft of items onboard.

Two areas that may or may not be covered, but are definitely worth asking about:

• Uninsured boater. “If you get hit by another boater that doesn’t have enough insurance or any insurance,” says Galbreath, “uninsured boater coverage will kick in to pay for damage or injuries.” Shasha adds, “If you cause an accident, or get into one, with an uninsured operator, you may be held responsible to cover related expenses, such as repairs, property damage, medical bills, lost wages, legal fees and more.”
• Hurricane coverage. If you live in the eastern/southeastern U.S. or anywhere with the possibility of hurricanes, ask if your boat is covered for storm-related loss or damage.

Types of Boat Insurance

Damage reimbursement and liability are two sides of the same coin with boat insurance. Galbreath says liability requirements depend on state laws, as well as lender requirements if you have a mortgage or loan on the boat.

“Another variable for coverage,” he says, “is if the boat will be out on a private lake, on a state lake or reservoir, a river or tributary, or on open water or the ocean.” The greater the risks of adverse weather, theft or unfortunate encounters with other boaters, the more detailed the policy will be.

Average Cost Ranges of Boat Insurance

Galbreath says boat insurance premiums range from low to costly, and some small motorboats may be endorsed (added) onto an existing homeowner’s policy for little extra cost. However, he says there are limits in the policy for the boat’s length, motor horsepower and maximum speed.

“You should consider separate coverage if you have a large, fast boat,” he says. “And the faster and larger you go, the higher the cost.”

So depending on the size, speed and location of your boat, your policy may cost as little as $100 a year up into the thousands. Most rough estimates we found were less than $1,000 per year.

When you meet with an insurance agent to discuss what level of boat insurance coverage you need, Shasha says to be sure you discuss the following factors, all of which influence the cost of your policy:

• Your level of boating education;
• The boat’s safety and security features;
• If the boat is a hybrid or electric;
• If you’re insuring more than one boat with the same company;
• If you have another policy, such as auto or homeowner’s, with the insurer.

“Working with an insurance representative to create a marine insurance policy that fits your individual needs and budget can help protect you, your loved ones, and your assets in the event there is a boating accident,” Shasha says.