How to protect your boat from damage, theft and anything else under the sun.
Your boat is supposed to be all about relaxation and tranquility. To keep it that way, it’s in your best interest to cover it against the worst. Boat insurance can protect your pride and joy with several options, from accidental damage to theft to natural disasters.
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How does boat insurance work?
Just like car insurance, boat insurance policies will only pay out if the person operating the vessel at the time of the accident is covered by that policy. But unlike car insurance, liability coverage isn’t a legal requirement in most places — though it’s included in almost all policies.
One of the most important things to consider is what you use the boat for. Fishing, racing, pleasure cruising and commuting all pose different risks, which will affect the price and conditions of your insurance policy. Some types of coverage can be extended to cover multiple uses, or can even cover possessions stored onboard.
What does boat insurance cover?
Boat insurance covers your watercraft in the event of damage, theft or any other unpredictable circumstance, depending on the insurer and level of coverage you choose.
- If you crash your boat into someone’s dock. It covers the costs to repair the dock and your boat, plus any injuries to people involved in the crash.
- If someone steals your boat. You may be able to get the full value back from your insurer.
- If someone vandalizes your boat. The right policy will cover it.
- If a flood damages your boat. A comprehensive policy will cover damage or loss from flood, fire, hail, weather and other natural events.
- If you’re towing your boat and damage it in a crash. Certain policies will cover your boat while you’re transporting it on the road. This includes damage incurred during an accident.
What additional coverage should I consider?
Including these add-ons to your policy might make a lot of sense, depending on your situation and how you use your boat:
- Contents. Covers all personal belongings on the boat. Can also cover tools like fishing equipment.
- Total loss replacement. Your insured boat can be replaced with a brand new one of similar quality.
- Emergency towing. Towing service or 24-hour assistance in case you need it.
- Racing for sailboats. Provides coverage for loss or damage while racing, particularly to sails, rigging and other vulnerable parts.
- Waterskiing. Provides liability coverage if waterskiing or using floatation devices.
- Environmental damage. Covers costs associated with environmental damage caused by oil or other waste leaks after an accident.
- Trailer. Covers your boat trailer from damage, theft, vandalism and more.
How to compare boat insurance
In order to find the best policy for your needs, ask yourself the following questions:
- Is my boat in insurable condition? Most policies will require that you have a “marine survey” done at your expense to show that the boat is seaworthy and in good working order.
- What value do I want insured? Choose from agreed value or market value. Agreed value lets you set the amount the boat is worth, which means you could pay more premiums in exchange for a higher insurance maximum and higher payout in the event of a total loss. With market value, also known as actual cash value, the value of your boat is calculated based on current value including depreciation, condition and damages.
- What parts of the boat do I want insured? Some policies allow you to choose which parts of the boat you want insured and for how much. For example, you may wish to reduce your premiums by insuring the hull but not the sail.
- How far can I take my boat from land? A common condition in most policies is a “geographical limit” of 200 nautical miles from the shore. You’re covered if you stay within that range, but not if you go beyond it.
- What are the maintenance requirements? Your policy will require that you keep your boat and moorings in good working order. Find out if your insurer has specific requirements. For example, some insurers will require you to have your moorings serviced every year.
- Will I be towing my boat? If your boat is damaged while being transported on a trailer, it’s usually not covered by boat insurance, so you’ll need to add trailer coverage to your car insurance. Boat insurance may still cover you for damage to others depending on how your policy is structured.
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Are there different types of policies for different types of boats?
Yes. There are several types of boats out there, and they all have different insurance options.
- Yachts. These high-value vessels typically have many luxuries on board. They’ll often require a customized boat insurance policy. It’s possible that some yachts are too expensive for normal insurers to cover.
- Powerboats. This is a broad category that includes various motorized boats like cruisers, runabouts and some smaller yachts. You can find plenty of insurance options for these.
- Sailboats. This also covers boats of many shapes, sizes and values. But one thing they have in common is the sail. Owners won’t have a hard time finding someone to insure their sailboat. In fact, this is the only type of boat that insurers will offer racing insurance for.
- Jetskis. Personal watercraft (PWC) includes jetskis, aqua bikes and other small motorized vessels. They tend to be purely recreational and are often owned alongside other boats. It can be cheaper to cover your PWC under the same policy as your main boat.
- Houseboats. These have unique insurance requirements and their value can vary widely, so you may need to find a dedicated marine insurance company to secure a policy shaped specifically to your needs.
- Small boats. Small vessels include dinghies, inflatables, canoes, kayaks, rowboats and small sailboats. Relatively fragile and unsuitable for use in bad weather, it’s not really worth insuring these by themselves. Like jetskis, it’s often cheaper to cover dinghies under the same policy as your main boat or with your home and property insurance.
How much does boat insurance cost?
The cost of boat insurance varies from person to person and boat to boat. The good news: it’s largely up to you how much you want to spend. When calculating your premiums, insurers will consider these factors.
- The type of boat you have
- What materials your boat is made out of
- Where you store/dock the boat
- Your boat’s hull length
- How much you want to insure the boat for
- Your boat’s maximum speed
- What coverage options you want to add
- Whether or not the boat is paid off
How do I get cheap boat insurance?
You don’t necessarily want the cheapest policy because you might end up with something that doesn’t protect you enough. But you can save money on boat insurance by demonstrating that you’re a safe and effective captain. Here are some tips:
- Have a storm plan. Insurance companies appreciate someone who knows in advance how they’d stay safe and minimize damage in a storm. Some companies will give discounts to boaters who follow storm plans, while others won’t let you sign up without one.
- Keep to calm waters. If you’re only going to be boating where the water is typically calm, ask your insurer if you can get a discount.
- Sail with the seasons. Some seasons bring harsher weather, so you can save on your premiums if you avoid boating during those times. Store your boat when you’re not using it and save even more with the lay-up option or temporary insurance, which lets you pay for insurance only during seasons when you’re using your boat.
- Keep a clean sailing record. You can save on your premiums by demonstrating to insurers that you’re a good captain, both on land and water.
- Set sail in fresh water. Saltwater comes with additional challenges and causes more wear and tear to your boat over time. An insurance policy for a boat that’s only used in fresh water should have lower premiums than an ocean vessel.
- Store your boat when you’re not using it. You can usually save on insurance if you store your boat at a marina as opposed to mooring it. Plus, you’ll have the added benefit of reducing wear and tear.
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What’s not included with boat insurance?
Your insurer may not pay out in all scenarios. For a clear idea of what will and won’t be covered by your boat insurance, contact an insurance company representative for more information.
- Your didn’t secure your boat. Most insurers require a minimum level of security. Boats on trailers are typically required to be stored in locked garages or secured with approved anti-theft devices. Simple padlocks and chains usually do not meet security standards.
- You were using the boat recklessly or for unapproved activities. You won’t be covered if you were breaking the law or using your boat in an unapproved ways the time of the accident. For example, you’ll be denied if you were racing it at the time and you don’t have the racing add-on.
- You sailed outside your geographical limits. Always know the geographic limits of your insurance policy. You risk having your claim denied if you go beyond this limit (unless a storm carried you out that far).
- You were towing your boat with your car. If you reverse into another car while towing your boat, your policy won’t cover damage to your boat unless clearly stated otherwise, although it may cover damage to the other person’s car. Because it was on the road at the time, this is a matter for car insurance.
- You didn’t maintain your boat well enough. If you haven’t maintained your boat properly, an insurer may try using this as a reason to not pay out.
- You used the boat when it was supposed to be stored. If you have lay-up coverage and you use the boat during a time when you’ve agreed to store it, you won’t be able to claim.
- Your boat was moored when it was not supposed to be. If your boat was registered as a trailer boat, but was moored at the time of the accident, the insurance company may refuse to pay out.
- You let someone else operate your boat. You’re only eligible to claim if the person operating the boat at the time of the accident is listed on the policy as an approved driver.
Pros and cons of boat insurance
Pros
- Useful for unexpected events or accidents.
- Covers you even if the other boat or its owner isn’t insured.
- Can provide coverage for total losses.
- You can decide the boat’s value.
- Protects against potentially devastating liability costs.
Cons
- Depending on the type of boat and its use, policies can be quite expensive.
- Each policy will have its own set of exclusions where costs cannot be claimed.
What should I watch out for?
Ensure the best policy fit by avoiding these potential pitfalls:
- Forgetting to install safety features. Not having alarm systems and safety gear could be used by the insurance company to reject your claim.
- Basing your policy purely on price. Choosing a basic policy may leave you underinsured and forced to pay excess charges in the event of a claim.
- Adding your boat to your home or car insurance. In most cases, it’s much better to get a standalone policy for your boat because it will be much more tailored to boating-specific needs.
Bottom line
Boat insurance is an effective way to protect your boat when it’s in use or when it’s being stored. Some home or car insurance providers will allow you to add your boat to your main policy, but you can probably get better coverage with a standalone boat insurance policy.
There are several providers out there with a selection of add-ons that can help you tailor your policy. Compare your insurance options to get the best coverage.
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