How Does Boat Insurance Work?

When you buy boat insurance, you must decide on the amount of coverage you need for your boat, the deductible (maximum out of pocket expense per claim) and the types of coverage you need. In the event that you have an accident, experience a theft, or have another loss that is covered under your policy, you can file a claim and receive a payment covering the loss.

As an example, if you were in an accident with another boat that caused serious damage to your vessel, one of the following things would most likely occur, depending upon the insurance coverage you and the other boater own and the laws in your state:

• If you were at fault, your watercraft insurance policy would cover the damage up to the limits of the policy.
• If the other boater was at fault, his coverage would pay for your damages, up to the limits of his policy.
• If the other boater was at fault, but did not have boat insurance, or did not have enough to cover your expenses, uninsured/underinsured boaters coverage could cover the damages (if you have that coverage in place).

How Much Does Boat Insurance Cost?

The cost of watercraft insurance varies depending on:

• The state you live in.
• The type, size, and age of the boat you wish to insure.
• The size of motor and how it is powered.
• Whether you are using it on inland waters or the open seas.
• Whether you have selected additional coverage options.

How Much Boat Insurance Do I Need?

The amount of boat insurance you need depends on a number of factors, including the boat’s value, motor size, age, and how you use it. For example, if you have a brand new high performance speed boat, you will need more coverage for bodily injury and property damage liability than if you buy a pleasure cruiser.

Insurance professionals recommend buying at least $1,000,000 in liability insurance, and even more if you have a fast, powerful boat that is both riskier and can cause more damage. For uninsured/underinsured motorists coverage, a typical minimum is $15,000. However, the amount you purchase should reflect the potential injuries and damages you may need to cover if you or one of your passengers is seriously hurt, or your vessel is damaged.

Your other coverage amounts, including collision coverage and comprehensive coverage, should be based specifically on the value of your boat.

Does Boat Insurance Cover Passengers?

Boat insurance covers boat passengers as well as the owner in an accident. Passengers on the boat are covered under the liability portion of the boater’s policy. However, depending on the policy, this may or may not extend to water skiers you are pulling behind the boat. Be sure to work with a knowledgeable professional who can help evaluate your needs and risks.

Does Boat Insurance Cover Theft?

Comprehensive boat insurance covers the theft of the boat itself. Personal possessions carried on the boat may or may not be covered, depending on the policy. Therefore, you should carefully review the comprehensive coverage of your policy to determine exactly what is and is not covered. If you plan to carry expensive fishing equipment or other items of value, you can purchase one or more additional “rider,” or policy endorsement, to cover those assets.

Does Boat Insurance Cover Hurricanes?

Depending on the insurance company and structure of your policy, boat insurance may or may not cover hurricane damage. If tropical storms, hurricanes, tornadoes or windstorms are a concern where you live or travel with your boat, ask your agent about storm damage coverage for your watercraft.

Does Boat Insurance Cover Me if I Hit a Rock?

If you have comprehensive insurance or property damage coverage built into your policy, your boat insurance will cover collision with rocks, logs, and other marine obstacles.