Do you need boat insurance?

 Your home insurance policy covers your boat in some cases, but it doesn’t go far.  Homeowners policies typically cap boat coverage at $1,000 or 10% of your  home’s insured value. And liability coverage — which pays for damage  your boat does to others — typically isn’t included under home  insurance. So a home insurance policy might help you only if your boat  is small, slow and inexpensive. 


At a glance: Do I need boat insurance?


  • Yachts - YES
  • Large sailboats - YES
  • Jet boats - YES
  • Personal watercraft like WaveRunners - YES
  • Anything that runs faster than 25 mph - YES
  • Canoes - NO
  • Boats with small engines - NO
  • Any other small, slow, inexpensive boat - NO


What boat insurance will pay for


You can typically buy liability insurance — which pays for damage  your boat does to others — in amounts from $15,000 to $300,000,  according to the Insurance Information Institute. Here’s what else you  can expect from a policy:

    What boat insurance typically covers     

  • Damage or destruction from a collision, fire, lightning, theft and vandalism.
  • Damage to a boat and permanently attached equipment, such as anchors.
  • Bodily injury liability, which pays expenses when someone is injured on your boat.
  • Property damage liability, which pays for damage your boat causes to someone else’s property.
  • Guest passenger liability, which pays for legal expenses of someone driving your boat with permission.
  • Medical payments, which pay expenses for you and your passengers.

       What it doesn’t cover 

  • Normal wear and tear.
  • Defective machinery or machinery damage.
  • Damage from sharks and other creatures.
  • Damage from mold, insects and zebra mussels.

 Check, too, about additional coverage for trailers and accessories, for towing and for damage caused by an uninsured boater. 


You can buy two types of damage coverage for a boat:


  • Actual cash value. This pays the value of your boat  at the time of the damage. If your boat is destroyed, your insurance  company determines its market value.
  • Agreed amount value. If your boat is destroyed,  your insurer pays you an amount that you and the company agreed on  beforehand. If your boat can be repaired, your insurer replaces old  items for new ones without deducting for depreciation.


Miscellaneous  coverages


  • Mechanical breakdown coverage. Pays to repair or replace your outboard motor as long as it’s not due to wear and tear.
  • Salvage. If your boat becomes disabled and a basic  tow won’t help, you might need to call a salvage company to recover it.  Typically a salvage company will ask for a percentage of the boat’s  value as payment, which can be quite expensive. Not all insurance  companies offer this coverage.
  • Gadgets. Not all boat insurers cover expensive  accessories like fishing equipment or fancy coolers unless they’re  permanently attached to the boat. For example, Travelers offers personal  property coverage that pays you if they’re stolen or lost while out on  the water. Endorsements, which are additions to your policy, are  available if you want to increase the value of your personal property  limits.

Important things to know about boating and your policy


  • Navigational limits: If you own a yacht or a larger  boat, your policy will have limits outlining where you can navigate  your vessel. If you venture outside of the territory you agreed to in  the policy, your insurance may not cover you. Typically, the broader  your navigation area is, the higher your insurance costs will be.
  • Layup periods: Taking your boat out of the water is  typical during cold weather, and most insurance companies will give you  a credit because it’s not being used. But take the boat out for a spin  before the layup period ends and you won’t be covered by your insurance  policy.
  • Marine inspections: If your boat is an older model,  most insurance companies will want you to have it inspected by a marine  surveyor in order to assess the vessel’s condition and market value.  For safety’s sake, consider a marine survey even if it’s not required.
  • Underage operators: You might be tempted to let  your 12-year-old drive the boat every now and then. But if your child  doesn’t meet age and license requirements in your state, your boat  insurance policy might not cover you.  Age and license requirements for  operating personal watercraft vary from state to state. In Virginia and  Florida, for example, no one under 14 may operate a personal watercraft.  In Texas, children under 13 are barred from driving one unless a  licensed operator who’s at least 18 is on board. For requirements where  you live, check with the boating regulatory agency in your state.

Boat insurance costs and discounts


How much you’ll pay for boat insurance depends on the level of  insurance coverage you want, as well as the size, horsepower, type and  value of your boat.

You can choose your deductible, which is the amount deducted from  your insurance check if you make a claim. A typical policy has  deductibles of $250 for property damage, $500 for theft and $1,000 for  medical payments, according to the Insurance Information Institute.  Liability claims against you do not have a deductible.

Insurance companies offer a variety of ways to save money, including discounts for:

  • Having a diesel-powered boat.
  • Not having made a previous boat insurance claim.
  • Carrying other policies, such as car or homeowners, with the same insurer.
  • Taking safety courses.

Where to buy boat insurance

 Boat insurance is widely available thru most major automobile insurance companies.