Boat Insurance: How Does It Work? What does it cover?

Boat season is coming (FINALLY!) and you must already have beer in the fridge looking forward to getting on the boat again, right? 

If you own a boat and have yet to think about insurance for it, this text is certainly for you! 

If you intend to buy a boat soon, this text is for you! 

And if you already have a boat insured but need to know if the Coverage is in line with your needs, this text is also for you!

Whether you’re looking for a new insurance policy or just looking to save money on a policy you already have, you can get a free quote now, or read on for all the details and get your quote knowing everything you want. 

What does Boat Insurance cover?

Like other vehicle insurance, boat coverage usually follows the same pattern. 

The most common are usually:

  • Property Damage Liability – covers the cost of damage to someone else’s property following an accident you caused. 
  • Collision Damage – is an optional coverage that pays the cost of repairing or replacing your own boat damaged in a collision. This Coverage usually requires payment of a deductible. 
  • Comprehensive Coverage – Covers events beyond your control, such as theft, vandalism, shipwreck, fire, high winds, hurricanes and other weather-related damage.
  • Body Injury Liability – pays for the costs associated with third party injuries if you are legally liable for an accident.
  • Hull Coverage – covers any physical damage that occurs to your boat and generally includes trailers, equipment, engines and accessories. This is where compensation is claimed for damage caused by fire and windstorm.
  • Fuel Spill Liability – a separate policy that covers fuel spill liability and provides Coverage for any related fines.
  • Full replacement cost – if you have both comprehensive and collision Coverage, you will be paid whatever is necessary to restore your vessel to pre-accident condition or better.

Other Coverages

So that your boat insurance meets every need you have, there is a wide range of Coverage to guarantee your safety and peace of mind when you are on the water. 

  • Wreckage removal – if your boat sinks, the costs of removing your boat from the water, if legally required, will be covered.
  • Water Sports – if someone is injured doing kneeboarding, wakeboarding, wakesurfing or similar activities this Coverage pays for medical expenses. Parasailing, kiteboarding, or other activities where someone is airborne will not be covered.
  • Fishing equipment or carry-on items – if your phone is dropped in water, or if you damage your fishing equipment, you can get the full replacement cost. This Coverage covers fishing gear and personal effects such as scuba gear, phones, or other items you carry on board that are lost or stolen.
  • Uninsured/underinsured boater – UB/UIB (uninsured/underinsured sailor) – if you understand the importance of having insurance, you will want to ensure that you are covered even if the person responsible for the accident is uninsured. This Coverage will pay for your injuries and damages up to the limits of your policy if such an accident happens.
  • Medical payments : this is for you to cover the costs of any medical expenses caused by an accident, or any injury that happens to you or a passenger on your boat. 

Which vessels are insured?

Boat insurance is designed to cover a variety of different vessels, they are: 

Speedboats and fishing boats

Boats built specifically for fishing, with features such as trolling motors, power poles, etc.

Pontoon Boats

Boats built on hollow metal cylinders for navigating lakes and rivers

motor boats 

The most popular boat type, used for fishing, cruising, water sports and more

Personal Watercraft (PWC) 

Includes Jet Skis, Sea-Doos, WaveRunners and similar craft designed for one to three people


Boats that use at least one sail for propulsion, although they may also have an engine


As wide as the range of insured vessels is, there are still some types of vessels that cannot be added to a policy:

  • Boats over 10 years old and worth more than $500,000 
  • Boats 11-20 years old and worth more than $250,000 
  • Boats over 20 years old and worth more than $60,000 
  • Boats used as primary residence (live on board) 
  • Houseboats that don’t have engines 
  • Homemade boats without a hull identification number 
  • Boats with more than two owners 
  • Boats with steel or wooden hulls 
  • All amphibious land boats, hovercraft or hydrofoil PWCs over $27,000 in value 
  • Boats that do not meet US Coast Guard published standards

Do I need Boat Insurance?

Other than auto insurance, only two states require some form of insurance coverage for boats. 

There are additional insurance requirements in some states for boaters who meet specific criteria, it is best to check what these requirements are with your state marine board or other local regulatory body.

However, even if the law does not oblige you to do so, there are other situations that require certain Coverage. For example, the bank that will finance the purchase of the boat, or that has the boat as collateral for a loan, will require a minimum insurance policy. 

Or even, the marina where your boat will be stored will require you to maintain up-to-date boat insurance to keep your boat on their premises.

Aside from any binding contracts or legislation, it is your peace and financial security that are at stake here. For a low price per month, you can have the Coverage you need and be able to sail without worrying about losing your boat in an accident or in a lawsuit suffered because of a slip on the deck. 

You already know this for sure, but boats are a big investment and can come at a significant cost in the event of an unexpected repair or accident. Get informed, know your options and find the perfect solution for your situation. 

Is boat insurance expensive? 

We know that you already understand the advantages of having insurance for your boat, you wouldn’t get here if you weren’t already convinced. However, the cost of things is often decisive. 

We also know that you fought hard to achieve this dream of having your own boat, and what we want most is to help you protect this precious asset, with the most convenient price and Coverage for you. 

So, here are some tips to save money when taking out your Boat Insurance: 

  • Buy only what you need : there are many insurance options on the market and many policies can have customized Coverage. Include only the Coverage you need and only pay for it. 
  • Agreed value vs. Cash value : In an agreed value policy, you are paid a pre-determined amount by the vessel in the event of a covered total loss. With the agreed value, you and the insurer agree on the value of the boat in advance. As the boat continues to age, potentially look into switching to a cash value option to save on premiums.
  • Take a Boater Safety Course : Almost all insurance companies offer a discount to boaters who have recently completed an approved boater safety course.
  • Buy safety equipment : Another thing that insurers value and can turn into an additional discount. 
  • Multiple policies (multi-policy) : if you already have your home, car or motorcycle insurance with the same insurance company, you can benefit. Insurers often charge lower amounts on additional policies. 
  • Multi-boat: discount for having more than one vessel in the same policy.
  • Original owner : if you are the first and only owner of your vessel, you have just found another discount!

What criteria are used to define the value of my insurance?

Many factors are used to define the cost of a policy and they vary from insurer to insurer. However, I have gathered some criteria that are often used:

  • Cruise area: where you board.
  • Boating Safety Education: If you have been formally trained or certified.
  • Good driving records: both boating and car driving.
  • Liability Limits: The higher the limit, the higher the cost.
  • Deductible: The higher the deductible, the lower the premium.
  • Offshore fishing trailer insurance requirements 

I want to get my insurance now what?

Calm! There’s still time for you to enter the Boat Season with active insurance! 

You can do a free simulation, even before buying your boat, to factor this cost into your purchase decision. 

If you already have your boat insured, come talk to us to review your Coverage and who knows how to save a little money for that repair you want to do or to buy that new accessory? 

Take out your insurance now and start the season in the peace you’ve dreamed of so much! 

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