Do I Need Boat Insurance?
If you’re thinking of buying a new boat and you want to get a full assessment of your costs, it’s natural to ask, “do I need boat insurance?” The answer is actually, it depends.
If you live in one of the few states that require it, then the answer is a big and absolute yes. Furthermore, if you’re financing your boat or docking in a marina, it’s also a yes. But if you don’t live in one of the 2 states that require boat insurance, not financing it, and won’t be docking in the marina, it’s still a good idea to buy boat insurance.
When is boat insurance a requirement?
Only in Arkansas and Utah is boat insurance required by law or regulation, so you don’t technically need boat insurance if you are strictly a pleasure user in all other states. However, most lienholders will require you to carry physical damage coverage when you finance your boat purchase. Additionally, if you don’t have space at the house or a private dock, you may need to dock your boat in the marina or harbor. Both will require you to show proof of liability coverage, which comes standard on boat policies.
What is boat insurance?
Generally speaking, boat insurance helps protect you financially from injuries or property damage you may cause while boating. If you buy certain coverages, it can also help you cover loss or damage to your boat, personal watercraft, or trailer. Similar to your auto insurance, you can buy additional or optional coverages to help give you more protection when on the water.
How does it work?
If you’re familiar with how your car insurance works, then you’ll understand boat insurance. Essentially, if you damage your boat or cause injuries or damages to someone else, you file a claim with your insurance company asking them to pay for it. If the claim is covered, the company will pay for the losses or injuries up to your coverage limits and subject to any deductibles.
PRO TIP:
It’s a myth that your home insurance provides adequate insurance when you’re boating. Sure, your homeowner’s policy may provide protection for smaller boats, but it’s typically for when it’s on your property. Homeowners’ insurance typically doesn’t provide the type of protection you require when on the water. Nor will it offer any of the optional benefits boat policies do for the unique risks of boat ownership.
What are the boat insurance coverages?
Also like your car insurance, boat insurance is not intended to cover general maintenance or wear and tear. However, it can help protect your boat from the financial costs of physical damage, as well as those if you cause damage to others. These are the most common coverages available on a boat insurance policy:
- Liability: This coverage pays for any damages or injuries you cause to others while boating. The maximum coverage is the limit of liability on your policy declarations.
- Comprehensive insurance: When you buy comprehensive, it can help pay for damage to your boat due to events out of your control. These events typically are caused by weather, theft, or fire.
- Collision insurance: Collision coverage helps pay for damage to your boat if you collide with an object or another boat or watercraft. The coverage pays regardless of fault. This coverage will also pay when your boat capsizes.
- Uninsured/Underinsured motorist: If you are injured or your boat is hit by a boater with little or no insurance, this coverage helps pay.
- Medical payments: Regardless of fault, this coverage helps pay for your passenger’s medical bills if there is a covered accident. In some states, it works in conjunction with medical insurance, and in others, it is secondary to medical insurance.
What are the optional or extra coverages?
When you buy boat insurance you will have several optional coverages to select from. Below are just a few commonly offered by insurance carriers, but there are many others (options will vary by company):
- Total loss replacement: Your insurer will reimburse you or replace your boat at the original amount you bought it for — regardless of what it’s worth now.
- Trailer trip interruption: Covers expenses for food, lodging, and transportation if your trailer or tow vehicle breaks down more than 100 miles from home.
- Replacement for personal items: Typically covers the cost to replace fishing equipment or any other personal property lost or stolen from your boat.
Learn more about boat insurance coverage.
PRO TIP:
For those times when your boat has become disabled on the water, an on-water assistance package is helpful. In fact, our partner Progressive offers their Sign & Glide® On-Water Towing, which helps pay for on-water towing, jump starts, soft un-groundings, and fuel delivery if your boat is disabled. Other carriers offer similar coverage. If your carrier doesn’t offer this, you should look into membership with a private on-water assistance program.
Will I need insurance for my trailer?
Typically, the liability coverage for your trailer is handled by the car insurance of the vehicle towing the boat. However, your car insurance will not cover damage to the trailer. With most insurance companies, damage to your trailer is covered when you add the trailer to your boat policy. This allows you to move your boat in and out of the water with confidence. If the boat trailer is damaged while on your home’s property, in some cases your homeowner’s insurance may cover the repairs. However, you typically carry higher deductibles on a home insurance policy, so boat policy coverage is still optimal.
Insuring your boat while in storage
Many will store their boats during the off-season and may question the value of keeping their boat insurance during storage. Even in storage, it’s a good idea to keep your boat insurance. If you require comprehensive coverage, it’s even more important. When in storage, comprehensive coverage continues to cover you for theft, fire, hail damage, and other perils and hazards. As a convenience, when you keep your boat insurance year-round, you won’t have to worry about reactivating, or buying a new policy when you’re ready to get back on the water. If you prefer, some carriers will allow you to simply drop some coverages. Therefore, may be able to adjust certain coverages while you’re not using your boat, and then add them back when boating season returns.
How is boat insurance priced?
While pricing can be different from one company to the next, many of those differences are marginal. For most insurance companies, the price you pay is more determined by your risk and the amount of insurance you purchase. If you only want a liability policy and are a low-risk boater, it will be a lower premium. Alternatively, the same person buying more coverage and having little experience will pay a higher premium. Nonetheless, there are some things you can do the help control how much boat insurance costs:
Your claims history: When you don’t have a history of claims, you’re considered a lower risk. This will include both auto and boating claims with most insurance companies.
Year, make, and model of boat: Your boat is much like your car or motorcycle in this regard. The type of boat and its year, make, and model will have an impact on the premium. This makes sense, newer boats generally cost more to replace, and high-performance boats are riskier. Whether you have an inboard or outboard motor might also influence your rate.
How much boating experience you have: Experienced boaters are less likely to have an accident. So, the longer you can be on the water developing critical experience helps. In fact, if you complete a watercraft safety course it may help bring down your boat policy premium.
The bottom line
If you own a boat, you should have the right insurance. If you’re not sure, simply contact an insurance agent at ask them to help evaluate your options. If you want our help, call us at (877) 334-7646 or request a quote online.
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