Boat Insurance: Everything You Need to Know


Boating and on-water recreation are popular summertime activities. If you own a boat or are considering buying one, you should also be thinking about boat insurance.

  •  Boat insurance isn’t typically required by states, but it is a good idea to protect your investment—and, many marinas require boat insurance if you are renting a slip or using a mooring.
  • Boat insurance typically includes accidental damage from collisions, liability for bodily injury or property damage, and events such as damage that happens when transporting your boat.

As the weather warms up, your thoughts may naturally turn to summer vacations and fun on the water. According to Statista Research, there were nearly 12 million registered vessels in the U.S. in 2020, with millions of American adults participating in recreational boating activities.

Whether you are out on the water, transporting your boat on a trailer, or storing it on dry land, it’s important to have insurance. Insurance protects you from financial losses associated with damage to your boat. Similarly, liability coverage is critical in the event that someone gets injured while on your boat.

Although most states don’t require boat insurance, it’s a good idea. Some marinas might even require you to have coverage if you are renting a slip or using a mooring. Of course, if you are financing your boat, your lender may require you to have insurance coverage.

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Who Needs Boat Insurance?

If you have a boat or other watercraft, you will likely need to get a specialized watercraft insurance policy to cover it. 

Standard homeowners insurance policies will only cover small boats, typically those that do not have a motor. Large sailboats are an exception; despite having no motor, you’ll still need boat insurance. Talk to your insurance agent if you have any questions about insuring your sailboat.

Canoes, kayaks, and small rowboats are frequently covered by a homeowners policy and will not need separate boat insurance. Check with your agent to see if there is a limit to the value covered. (Common limits are $1,000 to $2,000.) If you purchased a canoe for $4,000 and your homeowners insurance deductible were $500 with a policy limit of $1,000, and your canoe were stolen, you would need to cover a lot of the cost of replacement out-of-pocket.

Even if your boat is covered by your homeowners policy, make sure you understand the details. Some homeowners policies cover your boat or canoe only if it’s damaged at your home, rather than while it is on the water or in transport. As always, it is important to know the details of your homeowners insurance policy before you take your small craft out on the water.

If you are buying a motorboat, pontoon boat, or a yacht, purchasing boat insurance is essential because these boats are not going to be covered by your homeowners insurance. The value of your boat will be closely tied to the premium cost of your boat insurance, along with other factors such as where you live and your claims history.

As with automobiles, if you are financing your boat purchase, your lender will almost certainly require you to have insurance. Additionally, the bank will need to be listed on your policy as the current lien holder so that in the event of a loss, the bank’s interests will be covered in any payments.

What Does Boat Insurance Cover?

Remember: Boats are a type of vehicle. Your boat insurance will cover events that are similar to what your car insurance is designed for, including: 

  • accidental damage from collisions with other watercraft 
  • liability for bodily injury and property damage
  • events such as damage when loading your boat onto a trailer, a natural disaster, or a road accident

The amount covered by your insurance policy can vary based on your needs. Your agent can help you determine the right coverage amounts for you. 

Your boat insurance policy will typically include coverage for “guest passenger liability.” This provides you with legal protection in the event that someone else gets into an accident while driving the boat. 

Additionally, consider the amount of coverage you need for the items you leave on the boat. Basic items such as life jackets and clothes are considered part of the Personal Property Coverage which covers most contents of your boat. Some equipment -–such as a fish finder or radio— could potentially also need an additional rider. Check with your agent to make sure the limit on your policy is high enough to cover the value of these items. 

How Much Does Boat Insurance Cost?

There are many variables that go into determining your boat insurance premium. One of the biggest factors is cost: The more expensive your boat, the higher your insurance premium will be. However, other factors are important too, such as: 

  • the size of the boat
  • how many motors it has
  • how powerful the motors are
  • the make and model of your boat 
  • the age of the boat

Your boating history will be a factor, too. If you’ve spent many years safely piloting your boat, you could potentially pay a lower rate than someone who is new to owning a boat.

Where you live can also have a big impact on how much you pay for boat insurance. That’s because — just like driving cars long distances — the more time you spend on your boat, the higher your risk is for getting into an accident. People in northern states are likely going to pay less for boat insurance, for example, because the boating season is much shorter there. Boats that are primarily used in lakes will often cost less to insure because they are typically smaller than ones destined for use in ocean waters.

There are many variables that go into determining your boat insurance premium, so once you have your heart set on a particular make and model, talk to your insurance agent and start comparing quotes.

What Additional Riders Are Available for Boat Insurance?

Similar to car insurance, you can purchase additional coverage — called insurance riders — for your boat. Here are a few types of additional coverage you might want to consider.

On-Water Towing Assistance 

Think of this as a form of roadside assistance that operates whether you’re on the water or on land. If you run out of fuel on the water or need a tow back to the marina for some other reason, this addition to your boat policy will help get you off the water safely.

Carry-On and Personal Property Coverage 

This is additional coverage for personal property or expensive equipment you have with you on the boat. Some policies may require separate coverage for fishing equipment (including rods, nets, and tackle boxes).

Hurricane Haul-Out Coverage 

This rider is exactly what it sounds like: insurance that covers you when you need to have a boat hauled in the event of a hurricane or tropical storm. While some boat insurance policies include this coverage, not all do. It can be very expensive to pull your boat out of the water ahead of an approaching hurricane. This coverage is designed to alleviate some of the second-guessing about whether or not you should do so.

Boat Insurance Discounts

As with other property insurance types, bundling is your best bet for a discount if you are with a large insurer that offers a wide range of policies. You might also be able to get a discount if you complete a safe boating course.

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The Bottom Line

Having a boat is a dream for many, and it’s important to protect your investment. Getting the right coverage for your boat — based on how you plan to use it — is essential. 

With so many variables determining your premium, it can seem daunting to gather the information you need to make the right choice on your policy and additional riders. However, rest assured: Taking the time to get quotes will make getting on the water even better, because you’ll have peace of mind knowing that you’re protected.


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