10 Key Things You Need to Know about Powerboat Insurance

April 9, 2019

Americans love boating. In 2018, more than 280,000 new powerboats were sold in the U.S. However, what many people don’t like is the tedious process of buying powerboat insurance.

If you’re like most people, you were excited about choosing the size of your boat, the bottom paint color, and even other intricate nautical details of the vessel. However, you’re not as enthusiastic about getting insurance.

Getting coverage for your boat is the only way to secure your investment from marine risks. Therefore, before you set sail, here are 10 things you need to know about powerboat insurance.

1. Most Homeowners’ Insurance Policies Don’t Cover Boats

There’s a chance that your boat isn’t covered by your homeowners’ insurance policy. Even your flood insurance policy won’t cover damage to your boat after floods.

Thus, you should check your policy to determine whether or not your boat is covered. Most homeowners policies that cover powerboats have limitations. For example, they may not provide liability coverage.

Consider getting a separate, comprehensive policy for your powerboat. This will cover damages to the boat while in storage or the waters.

2. There Are Two Types of Powerboat Insurance

You have two options of powerboat insurance to choose from: agreed value and actual cash value. They are mostly the same. The difference lies in how depreciation is determined.

In the agreed value policy, the boat is covered based on its value when the insurance policy was written. The insurer doesn’t consider depreciation when handling a total or partial loss claim. Therefore, you will be compensated for the full value of the powerboat.

Actual cash value factors depreciation. Thus, in a total or partial loss claim, you’ll be compensated an amount that’s less the depreciation of the powerboat.

Actual cash value is the cheaper policy. However, the payout during a claim is less than what you get with an agreed value policy.

3. Boat Insurance Covers Numerous Disasters

You may be wondering whether or not buying powerboat insurance is worth it. The answer is yes.

The policy covers a wide range of disasters, such as fire, sinking, collision, capsizing, theft, and storms. Any risk that causes damage to your boat is insured.

Therefore, boat insurance can secure your investment and save you from incurring losses after property damage.

4. Insurance Covers Everything on Your Boat

Boating accidents are common in the U.S. There were 4,291 boating accidents in 2017 alone. To protect you from losses and lawsuits, insurance companies cover everything and everyone on your boat.

Your policy covers any property damage, including that of third parties. It also protects you from third-party lawsuits.

If someone gets injured while on your boat, your policy will cover their medical expenses and any personal injury damages resulting from the accident.

5. You Can Purchase Additional Insurance

Most plans cover the basic things we mentioned earlier. However, you can purchase additional coverage to further secure your investment.

Consider adding the following forms of coverage to your boat insurance policy:

  • Specialized coverage for expensive items like navigation equipment
  • Consequential damage for wear and tear losses
  • Towing cover
  • Ice and freezing coverage

Getting additional coverage can save you from paying out of pocket for expenses and losses that are not covered by your insurer.

6. You’re Not Covered Everywhere

Getting powerboat insurance in Tampa Bay doesn’t mean that it works everywhere. Well, it will be valid in the U.S, but not in Mexico or the Bahamas.

Before using your boat in waters outside the state or country, talk to your insurer about the extent of coverage you have. If you’re not covered, you can purchase a cruising extension cover. This protects you while using the boat outside the country.

7. Maintenance and Leaks May Not Be Covered

Most insurance companies don’t include essential maintenance and leak repairs in their policy. Any repairs necessary to keep the boat in excellent condition are solely your responsibility.

Beware that you’ll need some cash for basic maintenance. Consider getting professional boat maintenance services regularly. They will prevent costly uninsured repairs and save your money.

8. Premiums Depend on Individual Factors

When buying auto insurance, your insurer uses individual factors to determine the premiums you’ll pay. This is the case with boat insurance as well.

Factors like your credit rating, driving and boating experience, age, and claim history will be used to determine the cost of insurance. If you’re considered a high-risk client, you’ll pay higher rates.

Before buying powerboat insurance, work on your credit rating. You can pay off some short-term debts to improve the score and increase the chances of getting lower premiums.

9. You Can Lower the Cost of Insurance

Your insurance policy doesn’t have to be expensive. You can lower the cost and pay less in premiums every year. Below are some proven techniques:

  • Increase your deductible
  • Buy from your auto and homeowners’ insurance provider and get a discount for bundling your policies
  • Complete a state-approved boating safety program
  • Add safety equipment such as monitoring devices and fire extinguishers to your boat

If there’s anything you can do to lower your risk of making a claim, do it. It will play to your advantage when it comes to calculating premiums.

10. You Can Pause Your Policy in Winter

Boating is only practical during the summer and other warmer months of the year. The boat will be tucked away in your garage or a storage facility for the rest of the time.

During fall and winter, the risk of boating accidents or damage is negligible as the boats are usually in storage. Thus, you can reduce insurance costs by pausing your policy.

Talk to your insurer and find out whether this is possible. However, you cannot use your boat during the pause period. If you do, you’ll be on your own, and the policy won’t cover any property damage or liability claims.

Get Insurance for Your Powerboat Today

Buying powerboat insurance is one of the least favorite things to do for most people. However, the cover will protect your property and pay for damages incurred when there is an accident.

Contact us today for a free powerboat insurance quote!


**This blog provides a brief overview of the terms and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverage. These definitions do not alter or modify the terms of any insurance contract.