Your Guide to Boat Insurance

What happens when your boat gets sick? You take it to the doc. And when you do, you’ll want to have the best boat insurance for your situation. Owning and operating a boat isn’t always smooth sailing, so we’ve put together this summary of what you’ll need to know before gathering boat insurance quotes. Our efforts to help you learn the ropes of boat insurance before you find yourself up the creek without a paddle is intentional, just like our bad boat puns 😉.

In this article we’ll cover:

Is Boat Insurance Required?

What do Arkansas, Hawaii, and Utah have in common? Surprisingly, they’re the only states that require a boat insurance policy. This doesn’t mean you can always get away policy-free in other states; there are circumstances where you’ll need a boat insurance policy anyway. For example, if you dock your boat at a marina, it’s common that the marina will require an insurance policy. This makes sense; your coverage protects their other customers as well. Or if you’ve financed your boat, you don’t technically own it, yet. Your finance company will require boat insurance in order to keep you out of financial trouble long enough to repay your loan.

Required or not, you should at least consider getting boat insurance. Even if you’re willing to gamble with the potential for theft or an accident, there are other risks including liability issues that could quickly spiral out of control and leave you somewhere between the devil and the deep blue sea. Okay, that’s the last pun.

What kind of Boat Insurance Policies are there?

Just as you wouldn’t expect to purchase the same insurance policy for a car, motorhome, or heavy-haul tractor-trailer, there are different boat insurance types for different types of watercraft. This makes sense because there are different levels of risk and exposure depending on the size, value, and use of anything that floats on the water.

It’s no surprise that a boat insurance policy for a smaller boat will differ from a yacht, which is generally defined as 27 feet or larger. These larger boats commonly travel longer distances and are exposed to harsher elements, and for longer periods of time. So, it stands to reason that these boats will need extra protection. There are also policies for boat rentals and boat clubs that cover a variety of drivers over time. And there are tailor-made policies for professionals such as pro anglers, fishing guides, and charter captains. In fact, if you own and operate a charter boat, you need to consider a commercial policy that fully protects your property, passengers, and crew.

What does Boat Insurance Cover?

Think car insurance, but for cars that float. Boat insurance covers you for different situations, so you purchase which situations you want coverage for.

Liability coverage gets you off the hook in the event your boat damages another boat or caused damage to someone else’s property. Coverage may even include damage caused by the wake produced by your boat. And the bigger your boat, the more likely that can happen.

Importantly, liability insurance covers you for costs associated with injuries to others incurred during an accident – both medical costs and legal costs should there be legal action as a result of the accident. Note that we said “injuries to others.”  You’ll need Medical Payments coverage for your own injuries, or injured passengers.

Property coverage will cover theft as well as damage from boating accidents. This coverage typically includes accidents on land or in the water. It may even cover you for a boat that goes under water, so you won’t go under water on your payments.

Most policies will include permanently attached equipment such as anchors, oars, and seat cushions. But remember, like car insurance, boat insurance coverage will exclude normal wear and tear, scratches and dents, design defects, and the like. And like other forms of insurance, you’ll be able to choose between cash value or replacement cost coverage in case your boat is stolen, or beyond repair.

Many boat drivers are focused on having fun rather than insurance or safety, so you’ll want to consider Uninsured Watercraft coverage as well. This will cover you in the event an uninsured boater hits your boat – whether the result is damage, medical bills, or both.

Lastly, there are miscellaneous coverage items. You may have heard the expression that a boat is a hole in the water that you throw your money into? Or there are those who will remind you that BOAT stands for Break Out Another Thousand. Either way, it’s likely that you’ve spent some good money on items that make boating possible, such as trailers, or more enjoyable, such as fishing gear. You’ll want to investigate coverage for these items.

Especially if you’re using your boat for fishing, you’ll want to cover your expensive fishing gear, depth finders, and radar equipment. In fact, additions that cover fishing equipment might even cover reimbursement fees for fishing tournaments. They think of everything, which means you’ll want to be thorough and thoughtful about your needs as well. This doesn’t mean you should fall hook, line and sinker for every policy option offered, but you’ll want to match your coverage needs to your boating lifestyle.

What Isn’t Covered by Boat Insurance?

Just about all boat insurance policies will exclude something. The most common examples include wear and tear from regular boat use. Just as you can’t make a claim on your old car for getting old, you can’t make a claim on a boat that’s sat for years and worn down. Remember, insurance covers accidents and the unexpected; not the slow decline of a product over time.

Likewise, a policy isn’t likely to cover damage that occurs over time from bugs, corrosion, or mold. Policies are also likely to exclude defects from the manufacturer, or design flaws. That’s between you and the manufacturer.

What does Boat Insurance Cost?

The cost of a boat insurance policy depends on many factors, just as the cost of a boat depends on many factors. But it’s possible to ballpark an answer by asking yourself a few questions. For example:

  • Where are you going to boat? A local freshwater lake versus the Atlantic Ocean, for example. For some insurance companies, whether you live in a state with coastlines makes a difference, as does the length of your boating season. A shorter season means you have less time to get into trouble.
  • What experience and training do you have? It makes a difference whether you’re a first-time owner or a long-time, certified boat owner. Safety training and other certifications present a logical way to reduce your cost of insurance.
  • What is your driving record? This includes your boating record, if you have one, as well as your regular driving record. Drivers who abuse the roads tend to behave the same way on the water.
  • How much liability coverage do you need? You’ll pay more for more coverage, naturally.
  • What kind of deductible are you looking for? Just as with health insurance, your premiums are driven by whether you’re covered for a low deductible or a high deductible such as what you’d find for a catastrophic plan.
  • What’s the value of your boat and equipment? Of course, it costs more to insure a yacht than it does a jet ski. Like cars, there are cheap boats and expensive boats, old boats and new boats, and even old boats considered classic that hold the same value as new boats. You’ll want a handle on value before you wade into the proverbial deep end of your insurance needs.

If you look online for the average cost for a boat insurance policy, you’ll see a range from $200 to $500 a year. That’s a reflection of the average boat size and situation across all insured boat owners. However, you’ll see that for more expensive watercraft, insurance can cost from 1% to 5% of the value of the boat. A policy for a yacht or sailboat worth half a million dollars, therefore, may cost between $5,000 and $25,000.

In order to consider options and compare costs, you should know that there are others out there in the same boat, so to speak. Companies such as Guided Solutions make a living helping boat owners review existing policies, identify options for better coverage and more. Let us help you to navigate your best course of action based on your unique circumstances. Request a free boat insurance quote and speak with a licensed agent today!


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