Stay Financially Afloat with
The Best Boat Insurance
TLTR: This article explores the different types of boat insurance, how much boat insurance costs, whether you need it, and the factors that affect premium rates.
Cruising on a canal or lake or the open sea on a boat can be a great recreational activity, but it can also come with risks. According to the American Boating Association (ABA), in 2019 there were 4,168 accidents that involved 613 fatalities, 2,559 injuries, and approximately $55 million worth of property damage that directly stemmed from recreational boating.
So, if you want to stay afloat both literally and financially, protecting yourself and your boat with the right boat insurance is an absolute must.
In this blog
What Is Boat Insurance?
A boat insurance policy can financially protect your boat (or watercraft) against liability and damage if it gets into an accident. This means that the policy covers you and your boat if it injures someone or damages someone else’s property. It also helps pay for a replacement if your boat is stolen.
What are the Types of Boat Insurance?
When you purchase boat insurance, you’re able to pick between two policy options:
Actual cash value coverage costs less upfront but will take depreciation into consideration when paying for any repairs that your boat needs. In other words, it will only pay the actual cash/market value of the boat at the time it experiences a loss.
For example, let’s say you purchase a boat at $30,000, and, after two years, it is estimated to have depreciated to $18,000. If the boat gets into an accident and the repair value amounts to $25,000, you’ll only receive $18,000 since it’s the boat’s current market value.
Agreed amount coverage will help pay for repairs by taking into account the valuation of your boat that you and your carrier decided on when the policy was originally written. While it can cost more upfront, depreciation and changes in market value will not factor in.
If the boat that you purchased for $30,000 gets into an accident and the insurance company had agreed on a coverage amount of $20,000, under this coverage, you will receive the entire $20,000.
So, before you make a purchase decision, it’s best to study the market trends on watercraft. For instance, if the market value of boats is decreasing, it would be in your best interest to purchase an agreed amount of coverage.
Do I Need Boat Rental Insurance?
You don’t need to get boat insurance to operate a rental boat. However, you will have to sign a rental contract that states what damages you might be responsible for paying.
In most cases, rental companies are only responsible for the structural damage to the boats and injuries you or your passenger sustains and don’t cover mechanical issues.
Some boat rental companies offer specialized coverage that lasts only till the rental period.
Some banks also provide rental coverage through their credit cards. So, see if you can use your credit card to pay for the rental and make use of the service.
What Does Boat Insurance Cover?
The type of boat or watercraft you have determines what your boat insurance covers. Standard boat insurance typically covers:
Damage to the vessel’s hull, equipment, engine, sails, and furnishings
If your boat gets into an accident that causes damage to its hull, sails, internal equipment, and permanent furnishing, your boat insurance will cover its repairs and replacement.
If you’re found to have caused an accident that damaged someone else’s property, liability coverage will help pay for your expenses up to the policy amount.
It also helps to make sure that your policy includes coverage for salvage and removal of wreckage.
Fuel spillage liability
Your watercraft can discharge fuel or oil for several reasons. Accidents, fire, collision with an object including another boat, and sinking can all lead to fuel leakage.
Fuel spillage liability covers you from claims for cleanup or third-party damage.
A good policy can provide coverage up to the maximum amount that a boater can be held liable for under federal law. According to the Oil Pollution Act Liability Limits 2019, the maximum amount is currently set at a hefty $939,800.
If you or your passenger sustain injuries from a boating accident, medical payments can help cover expenses like hospital bills, medication expenses, or X-Ray charges.
Uninsured boater/watercraft coverage
Suppose an uninsured boater collides with your watercraft and injures you and your passenger and damages your boat. In that case, the uninsured watercraft coverage will help pay for any related expenses up to the policy limit.
Apart from the standard coverage, the needs of boat owners can vary. So, it might be a good idea to talk with your insurance agent about additional coverage for the following:
- On-water towing assistance
- Guest passenger liability
- Boat trailers
- Fishing equipment coverage
- Watercraft accessories like radio communication equipment, radar gear, and geo-location instruments
- Ice and freezing damage coverage
- Special equipment like fishing gear and towing coverage
Will my Homeowners Insurance Cover my Boat?
While you can cover your boat with your homeowners insurance or renters insurance, you’ll find certain limitations regarding the size and value of your boat. So, in most cases, the policy won’t cover boats with values exceeding $1,000 or $2,000.
Your homeowners insurance can cover certain smaller non-motorized watercraft like canoes, paddle boats, small sailboats, and kayaks with horsepower less than 25 – 100 mph, but won’t be enough to cover larger and more powerful motorized watercraft like yachts and jet skis.
Your homeowners policy will also only cover your boat if it’s damaged while it’s within your property. Furthermore, liability coverage isn’t included in the standard policy and needs to be added as an endorsement.
If you’re looking to insure larger boats and watercraft, you’ll require a separate boat insurance policy.
Most homeowners insurance also limits coverage if you use your boat in inland waterways, lakes, and rivers. So, it might not cover boats that are used on coastlines or along the beach.
Consult with your insurance agent to understand your policy’s range and limitations.
How Much Does Boat Insurance Cost?
You’ll typically need to pay anywhere from $300 to $500 per year in insurance premiums. However, in some cases, boat insurance costs can reach upwards of $1,000.
The rates for boat insurance can vary due to many different factors, such as:
Boat insurance will be cheaper if you’re in a state that doesn’t have a coastline. As coastal states see a larger number of expensive boats used in the ocean for various purposes, there are more accidents and mishaps.
The Great Lakes states such as Wisconsin, Michigan, and Indiana typically tend to fall under the low-cost category.
Length of the boating season
The length of the boating season also has a big impact on the boat insurance cost of your premiums. Many of the northern states offer lower insurance costs compared to states where boating is a year-round activity.
The type, model, and age of the vessel you want to insure
Different boats have different sizes and horsepower, and these factors affect the rate of premium. For example, a boat used for fishing, a luxury yacht, and a speedboat owner should all expect different rates.
Like auto insurance, owners of older boats can expect to pay less than owners of newer boats.
Your insurance company will take your age and experience into consideration while determining your premium. Insurance providers generally charge higher rates to boaters who have inadequate experience. Teen drivers are also considered to be more likely to be reckless and are charged more.
Besides the age and experience level, the owner’s car driving record, credit score, and history of prior claims can also influence the rates of their premium.
People who have proper experience with operating watercraft, an excellent motorist driving record, and a clean history of claims are highly favored by insurance providers.
The higher you set your liability coverage amount, the higher your rate of premium will be.
How you’re using or plan on using the boat
Boats are used for a variety of reasons. Recreational activities, low-key fishing, high-speed racing, parasailing activities, etc., can all provide distinct pleasure to individual boat owners. So, owners who engage in frequent and high-risk activities will have to pay more in premiums.
How you store your boat
How and where you store your boat also impacts the rate of premium. Insurance companies will analyze the location and the security measures you’ve implemented while storing your boat. You can expect to pay lower rates if you’ve taken the necessary storage safety measures.
Some of the states with the lowest annual boat insurance cost average ($250) are:
Some of the states with the lowest annual boat insurance cost average ($250) are:
Do I Need Boat Insurance?
Most states don’t require you to purchase boat insurance. However, most marinas require you to have some form of insurance if you want to use a mooring or a slip. Furthermore, your bank will require insurance if you’re financing the purchase of a boat.
What are the best boat insurance Providers?
According to the Balance, the eight best boat insurance providers of 2021 are:
- Best For Professional Fishermen: Markel
- For Affordability: Allstate
- Best For Safe Boat Drivers: Progressive
- For Additional Coverage Options: Foremost
- For Policy Bundling: Nationwide
- Best For Individualized Customer Service: United Marine Underwriters
- For Emergency Services Coverage: State Farm
- For Additional Benefits: BoatUS
Where Can I Get Boat Insurance?
Finding boat insurance isn’t hard. But finding the right boat insurance that meets both your needs and budget can be a bit tricky. The easiest way to find a suitable policy is by acquiring boat insurance quotes from at least four to five boat insurance providers and then comparing them.
You can compare boat insurance yourself by using our insurance directory.
Make sure that you’re comparing the same policies. Look into what aspects are included and what is excluded. Once you’ve factored in all the details, pick the one you think covers all your immediate needs.
Another option you can choose is to consult with an insurance agent who specializes in boat insurance or a boat insurance broker. As professionals, they can assess your situation and help you find cheap boat insurance rates. They can also save you a lot of time and effort.
Find an agent to help you out with finding the right boat insurance today!
Did you find this blog helpful? Let us know in the comment section below.