What Does Boat Insurance Cover? How to Determine the Right Coverage

January 11, 2024

what does boat insurance cover

If you love the water, owning your own boat can be so fun and rewarding. You can spend time on the water with friends and family, enjoy water sports and fishing, and so much more.

Although owning a boat has some definite perks, there are some real risks involved. That’s why boat insurance is so important for any boat owner.

The types of boat insurance available vary widely, and you may wonder what does boat insurance cover. We have the answers.

Here’s a guide on the boat insurance basics you should know.

What Is Boat Insurance?

Boat insurance covers you in the event your boat becomes damaged or involved in an accident. Some boat insurance policies include bodily injury coverage and property damage liability insurance, which helps pay for any injuries or damages your boat causes.

Most watercraft with motors, such as fishing boats, paddle boats, pontoon boats, leisure craft, and yachts, are covered by boat insurance. Typically, this type of insurance doesn’t cover kayaks, canoes, or personal watercraft like jet skis.

Some small watercraft may be covered under your homeowner’s policy. You may be able to add an endorsement or purchase separate coverage for small watercraft.

Many boat owners don’t realize that neither their home nor auto insurance covers their boat. This leaves them under-protected and underinsured.

Without boat insurance, you could be left footing the bill when the unexpected happens.

What Does Boat Insurance Cover?

What your boat insurance covers varies depending on the type of boat you’re insuring. The types of coverage you choose also factor into what your insurance will cover.

Like car insurance, your boat insurance policy may include various types of insurance for well-rounded protection.

Some types of boat insurance include:

Collision Damage

Collision damage typically includes boat repair or replacement. It may not include wreckage cleanup unless you opted for additional coverage.

Bodily Injury Liability

This type of insurance covers any injuries you may have caused using your boat. It covers medical costs, lost wages, legal expenses, and pain and suffering.

Property Damage Liability

A boating accident can cause damage to another boat or someone’s property or structure. Property damage liability covers these types of damages.

Comprehensive Coverage

Comprehensive insurance coverage protects your vessel against events out of your control. It covers damages if your boat is stolen, vandalized, or damaged in an event other than a collision.

Additional Coverage Options

Additional coverage is available for medical bills, oil spills, fishing equipment, roadside assistance, and personal property. This is in addition to coverage for uninsured or underinsured boaters.

Most standard boat insurance policies cover the following:

  • Accidental collision or impact to your boat’s hull, equipment, sails, motor, or furnishings
  • Damage or loss due to theft, vandalism, lightning, or wind
  • Damage caused by your boat to another boat or property
  • Bodily injury or death of someone caused by your boat
  • The injured party’s medical bills, pain and suffering, and legal expenses

Boat Insurance Basics

Boat insurance coverage varies widely. There are a number of factors that determine what a policy will and will not cover.

Some factors include:

  • The type of boat
  • The age of the boat
  • Boat usage
  • Where you will operate it

There is basic insurance coverage available and there are potential discounts available for safe boaters.

Physical Damage

This coverage protects your boat against loss and damage from common risks, including fire, storms, sinking, theft, and collision. The property covered typically includes the hull along with boat components, such as motors, anchors, fuel tanks, batteries, and onboard safety equipment.

When choosing boat insurance, consider whether the policy covers a boat’s replacement cost or the cash value (ACV). A replacement cost policy reimburses you for the cost of repairing a boat back to its original condition or replacing it with the same or similar model.

An ACV-based policy reimburses you for the repair or replacement of the boat at the time of its loss. Some policies include an agreed value loss settlement for total losses. This allows you to receive the full coverage limits if your boat ends up being a total loss.

Liability Coverage

Liability coverage is a must if your boat causes an injury to someone or causes damage to other boats, structures, or docks. Damage can be due to your boat coming into direct contact with another vessel or being in a situation that causes damage.

Boat liability insurance protects you from various covered claims and lawsuits, including the payment of legal fees and settlements. Consider the coverage you need and the potential risks you could incur when you’re weighing your options for boat insurance.

Boat Insurance Add-Ons

Are you looking for better or broader protection for your boat? Additional insurance can help you protect your investment and extend your coverage.

This can protect you against more potential issues or events. Some protections you may want to consider as an add-on include:

  • New boat replacement
  • Fuel spill liability
  • Uninsured or underinsured boater
  • Medical payments for yourself or passengers
  • Wreck removal and salvage
  • Boat trailers
  • Guest passenger liability
  • Boat accessories like radar
  • Mechanical breakdown
  • Special equipment like fishing gear
  • On-water towing
  • Ice and freeze coverage
  • Hurricane haul-out provisions

Loss or theft of your personal property may not be covered unless it’s stated in your policy. Before purchasing extra coverage, check whether or not your homeowner’s policy covers these items.

What Is Not Covered by Boat Insurance?

You may wonder what boat insurance doesn’t cover. You want to be familiar with your policy, so there are no surprises when you need it most.

Although boat insurance is intended to protect you and your boat, it won’t cover everything. It’s important to understand the exclusions, so you can work to prevent these issues from occurring.

Some common boat insurance exclusions include:

  • Bugs
  • Mold
  • Land and sea creatures like sharks or waterfowl
  • Negligence
  • Normal wear and tear
  • Rust and corrosion
  • Machinery damage
  • Manufacturer defects, including the boat’s design
  • Overuse
  • Machinery damage

Although most boat insurance policies don’t cover normal wear and tear, you can add consequential damages to your insurance policy. This add-on covers some losses that occur due to wear and tear to your vessel.

If you have plans to venture into foreign waters in your boat, such as the Bahamas or Mexico, be sure to inform your insurance company. Most insurers will only cover your boat in U.S. territorial waters. They may require a trip endorsement to provide coverage for boating in international waters.

Do You Need Boat Insurance?

Boat owners often ask whether buying boat insurance is required. The answer is no. In most states, boat insurance isn’t a requirement, but that doesn’t mean you shouldn’t buy it.

A few states require liability coverage for a boat with a 50 or higher horsepower engine. Some marinas require boat liability coverage for parking privileges.

If you finance your boat with a bank or another lender, they typically require more extensive insurance coverage to offset the financial risks. Even if you’re not required to purchase boat insurance, it’s a worthwhile investment.

It only takes one small mistake or incident to escalate into a costly problem for you. Protect yourself and your boat with the appropriate boat insurance coverage for your needs.

How Does Boat Insurance Work?

Boat insurance is designed to compensate you for the costs of covered damage or incidents, according to your policy’s deductible and policy limits. When you purchase boat insurance, you choose the coverage you need along with the deductible.

Typically, the higher the deductible, the lower the monthly insurance payments. If you’re involved in a boat accident, become a victim of theft, or experience a loss that’s covered by your policy, you can file a claim to cover your losses. The amount of money you receive depends on your boat insurance policy and limits.

The policy limit is the most the insurance company will pay for a claim. Policies can vary greatly and have different limits. This dictates the amount you can receive for each type of claim you could file.

For example, you may have liability coverage with a limit of $70,000 per claim or boat trailer coverage of $6,000. You may have comprehensive insurance coverage with a limit on the boat’s replacement price, which is the actual cost of replacement.

How Does Boat Insurance Work When You Have an Accident?

If you have an accident with another boat that damages your vessel, the next steps depend on your insurance coverage, the other’s boaters coverage, and your state laws. Here are some possibilities:

  • If you’re at fault, your collision insurance covers the damage up to the policy’s limits
  • If the other boater is at fault, their liability coverage pays up to the policy’s limits
  • If the other boater is at fault but doesn’t have insurance, your uninsured/underinsured coverage pays

Hopefully, you won’t ever need to file a boat insurance claim. If you do, be sure to follow a few basic steps to prevent your claim from being denied.

  1. Inform your insurance company immediately after a boat accident
  2. Take all possible precautions to protect your boat from further damage
  3. Wait before you begin permanent repairs
  4. Do not dispose of any damaged parts before the insurance inspection
  5. Be sure to comply with all requirements set by your insurance provider

How Much Does Boat Insurance Cost?

Boat insurance prices vary. Generally, the costs range from around $200 to $500 per year. The costs of insurance for older boats vary significantly.

The price of boat insurance depends on a few different factors, including:

  • The coverage, limits, and deductibles
  • The age, size, and type of boat you insure
  • The state where you live
  • The motor size and power
  • Whether you plan to use your boat on the open seas or inland waters
  • Your lender’s requirements
  • The marina’s requirements

Insurers may offer boat insurance discounts that can reduce costs in certain situations. You may qualify for a lay-up discount if you don’t plan to use your boat year-round or plan to use it in freshwater rather than salt water.

There may be discounts available for taking a boating safety course or for having a clean boating record. If you have safety equipment like Coast Guard-approved fire extinguishers or shore-to-shore radios, you could be eligible for a discount.

Insurance companies vary in the types of discounts they offer. Compare quotes and options before making a decision about the right boat insurance for your needs.

How Much Insurance Do I Need?

Boat insurance needs vary and depend on a number of factors. These include:

  • The boat’s value
  • The age of your boat
  • The motor size
  • How you plan to use your boat
  • Your risk tolerance

If you’re buying a new high-performance speed boat, you will need more collision and liability coverage than someone buying an older pleasure boat. Insurance experts recommend buying at least one million dollars in liability insurance.

If you buy an expensive, riskier vessel that could cause more damage than other types of vessels, you need more insurance coverage. A typical minimum for uninsured/underinsured coverage is $10,000.

The amount you purchase must reflect the potential damages you would have to cover if you, another passenger, or your boat is harmed. Other coverage amounts, including comprehensive and collision coverage, should be based on the dollar value of your boat.

Protecting your boat involves more than routine repairs and maintenance. Your boat is a major investment, and boat insurance helps you protect your financial interests.

Unfortunately, boating accidents are common. It’s better to be prepared and have the coverage you need before getting out on the open water.

Get the Right Boat Insurance for Your Needs

Having a boat is great fun and a wonderful activity to share with your family and friends. Boat ownership is also a big responsibility that carries its fair share of risks.

That’s why it’s so important to know what does boat insurance cover and have the right coverage for your vessel. At HH Insurance, our goal is to provide amazing customer service while meeting your insurance needs.

Our insurance experts work with exclusive insurance markets to provide the best coverage at the lowest possible rates.

Contact HH Insurance today to see how we can assist you.




**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.