Top Boat Insurance Coverage: What You Need to Know 
Although not a legal requirement in every state, obtaining top boat insurance coverage is strongly advised for all boat and personal watercraft owners. Boat insurance covers watercraft up to 26 feet. Vessels longer than that are considered yachts and require yacht insurance. Smaller boats may be covered by home insurance.
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Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
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UPDATED: Nov 27, 2023
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If you have a boat of any kind, it pays to learn about boat insurance. Also known as watercraft insurance, boat insurance will protect you, your boat, and others in the case of a loss. While not mandatory in all states, it is highly recommended for all boat and personal watercraft owners.
To be eligible for boat insurance, the watercraft must be 26 feet or less in length. If it is longer, it is considered a yacht and will need yacht insurance. However, if you have a very small power boat with a motor that performs at less than 25 miles per hour horsepower, it can be covered under your homeowners insurance policy.
Small sailboats and canoes are also covered under it. However, the coverage is typically capped at $1,000 or 10% of your home’s value. This amount is meant to cover the boat, trailer, and motor. This does not provide sufficient coverage for most watercraft.
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Types of Boat Insurance Available
Boat insurance is very similar to car insurance. Many of the same options and choices you have for your auto insurance policy will be presented to you for your boat insurance. The most important of these is liability coverage. Depending on the state you operate your boat in, a boat insurance policy may or may not be mandatory.
The level of liability coverage offered for boat insurance can begin as low as $10,000/$20,000/$10,000. This refers to $10,000 coverage for bodily injury per person; $20,000 bodily injury coverage in total per accident; and $10,000 property damage liability coverage. These amounts are ridiculously low. Recommended amounts start at $100,000/$300,000/$100,000. You can also get higher limits if you prefer. Liability coverage is extremely important to carry, because if another person is injured or killed due to an at-fault accident with your boat, or another’s personal property acquires physical damage, you can suffer huge financial losses if you do not have the proper boat insurance coverage.
Collision and comprehensive coverage are usually treated as optional coverage, but they will protect the investment in your boat. They will cover the cost to repair or replace your boat, motor, trailer and any equipment that is permanently attached to your boat in case of loss. Collision coverage is in case your boat collides with another boat or other property and you are at fault. Comprehensive coverage is for other types of loss, such as storm damage, theft, fire or vandalism. Claims of these type are subject to a deductible that you choose when you take out your boat policy.
The amount that you can receive from a collision or comprehensive claim is based on the type of policy you choose. An actual cash value policy is based on the replacement cost of your boat minus any depreciation up to the date of loss. Claims are paid out for this amount minus the deductible. Agreed amount value is the other type of policy that does not factor in depreciation. Premiums are set based on an amount agreed to by the insurer and the insured, as to how much the boat is worth.
Variables that Affect the Price of Boat Insurance
Boat insurance varies in price not only from company to company, but also from insured to insured. As with other types of insurance, the premium you pay depends on the rate set by the insurer. The rate is determined by underwriters who look at a variety of factors to determine exactly how much risk they are assuming by offering you boat insurance.
The type of boat itself is one of the major variables considered by an insurer when setting rates. The insurer will need to know the length of the boat, the horsepower of the motor and the year, make and model of both boat and motor.
Where you use your boat is also a factor in the cost of boat insurance. Even if you live in one state, but your boat is moored in another, you will need to take out insurance in the state where you will use it. The type of claims typical for that state will be factored in to the price. If you live in the Midwest, but your boat is used in Florida, the risk of hurricanes likely for Florida must be considered. The type of body of water you plan to use your boat in will also impact the price. Rates are different for lakes, rivers or the ocean.
Information about the boat owner will also make a difference in your boat insurance premium. You will need to give information about your driving record. If it is less than perfect, expect to pay more for boat insurance. Your claims history will also impact the rate. If you have made multiple claims in recent years on any type of insurance, your rate will be higher. Your credit history will also count. If you have a poor credit history, you will be deemed higher risk and charged accordingly, as research has shown that those with poor credit scores are more likely to make insurance claims.
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Getting Discounts on Boat Insurance
There are many ways to save money on boat insurance. When you are shopping around for insurance, be sure to ask providers if you have all the discounts that you are possibly eligible for. You may be told about little known discounts that can save you greatly. One of the most common discounts is the multi-line discount. This is given to clients who have more than one type of insurance with the same company. Therefore if you are in the market for boat insurance, start by getting a quote from companies you already deal with.
Many states offer safe boating education courses. These are similar to driver safety courses and are sometimes necessary in order to get a first boat license or to get your boat license back following an accident or other infraction. Even for the experienced boater, taking these types of courses will often earn you a reduction in premium.
Safety equipment like ship-to-shore radios and fire extinguishers approved by the Coast Guard are recommended equipment that will earn you a discount on your boat insurance. If your boat runs on diesel it may also provide you a discount on your coverage, as such boats pose less of an explosion hazard than boats that run on gasoline.
The way you pay your boat insurance will often also impact the total amount you have to pay out. Many insurers will offer a boat insurance discount as much as 5% if you pay the premium in total up front. If you can afford to do so, it is a good way to save on your boat insurance costs.
Things to Consider When Buying Boat Insurance
When you are looking to buy boat insurance, it is important to consider the different aspects of the policy. While you will certainly compare quotes according to price, you should also do your homework on a company before taking out a policy with them.
The economic stability of the insurance company is a very important piece of information to have. You want the insurer to still be around and be liquid enough to pay claims if you have occasion to make one. You can find out such information by getting the insurer’s rating from one of the independent insurance ratings companies, like A.M. Best, Moody’s or Standard & Poor’s.
It is also important to look at the customer service record of any insurer you are planning to deal with. Typically by contacting your state’s department of insurance you can find out the incidences of complaints against an insurer. Many states will detail the subject of the complaint and the resolution, if any. By doing an online search you can also find out how an insurer fares in terms of its reputation for customer service.
Get Free Boat Insurance Quotes Online
When you are ready to purchase boat insurance, you can start by getting a variety of quotes from top boat insurers serving your area quickly and easily with our boat insurance online quote tool. Your options will be presented in an easy to compare format to facilitate the decision-making process. Get started comparing free boat insurance quotes now!