Boats are the highlight of summer! they are flashy, funny. . . and very expensive to repair or replace. That’s why it’s better to pay for boat insurance than expect to get by with zero accidents.
Boat insurance protects you financially if your boat is involved in an accident where property is damaged or someone is injured. On average, boat insurance costs $200 to $500 a year, or about 1 to 5% of your boat’s value if you have a large, powerful, or expensive boat.
Let’s talk about what affects the average cost of boat insurance, what it covers and where to get it.
Do I really need boat insurance?
That depends on your ship. A standard homeowners insurance policy will generally cover small, inexpensive boats such as:
- jon boats
- vessels with low horsepower engines (generally less than 25 horsepower or top speeds less than 25 mph)
- boat rental: Since your boat is your business, you may also need commercial insurance.
- fishing boats: including bass boats, fancy offshore rigs, and everything in between
- floating homes: Just like insuring a regular home, you should also insure your home on the water.
- Jet skis: Jet skis are great fun, but also risky, hence the insurance.
- pontoons: pontoons are where the party is! so make sure your ship and passengers are protected.
- sailboats: activities such as long distance trips, races or historical re-enactments require special coverage. think of sailboats as the classic cars of the sea.
- Speedboats: Speedboats have a higher risk of accidents, making insurance a must.
- yachts: Luxury boats need insurance because they are more valuable and travel farther than most other boats.
- take boating safety classes
- use a diesel engine
- carries ship-to-shore radios, coast guard-approved fire extinguishers, and other safety equipment
- bundle your boat, home and auto insurance
- pay your insurance yearly
- choose a high deductible
- do not file a claim for at least two years
- collision with other ships, docks, submerged objects or floating debris
- damage from wind, hail, lightning or other weather conditions
- theft or vandalism
You can also add a liability clause to your homeowners insurance to cover property damage or injury if you are in an accident with another boater.
But homeowners policies won’t cover large, powerful boats. You will need boat insurance to:
All of these boats need insurance, even if it’s not required by state law. why? Because if you don’t have insurance, a boating accident can ruin your future, in more ways than one.
Boating accidents caused $55 million in property damage in 2019, and that’s not counting medical bills and lost wages for the 2,559 people who were injured. to make matters worse, 613 people died in boating accidents that year.1
If you cause such damage, injury or (heaven forbid) death, you will be liable. That’s why boat insurance is so important: it protects you financially after an accident, so you can focus on more important things.
how much does boat insurance cost?
The average cost of boat insurance is $200-$500 a year, although for a really big or expensive boat (like a yacht or sailboat), insurance can cost around 1-5% of the value of the boat. For example, you might pay around $2,500 a year to insure a $100,000 yacht.
But just like other insurance rates vary, boat insurance costs change based on you and your boat.
what factors affect boat insurance costs?
Many of the factors that affect auto insurance rates also affect boats, but there are some unique things to consider for boats as well.
type of ship
The more valuable a boat is, the more expensive it is to insure. For example, yacht insurance almost always costs more than pontoon insurance because yachts are more expensive.
high horsepower boats are riskier, so insurance companies look at the type of motor (inboard or outboard, amount of horsepower, etc.). slow and steady usually wins the race for low insurance rates!
To be considered in good condition, your boat must meet US requirements. uu. coast guard safety standards from the time it was built. otherwise, you’ll pay higher premiums due to your boat’s outdated safety features.
The age of your boat is important, as is yours.
Older boats are often cheaper to insure, especially if they’ve only had one owner. You’ll probably also get better rates if you’re between the ages of 25 and 60, because that’s when insurers think you’re most responsible.
fishing and floating are less risky than towing water skis or wakeboards. if you use your boat for “risky” activities, your insurance company will charge you higher premiums to compensate for the accident they expect you to have.
Boating accidents almost always happen on the water (duh). So if you occasionally take your boat out, you’ll pay less than if you sail every weekend. That’s also why people living up north tend to pay less for boat insurance: shorter boating season means less time for accidents.
Speaking of where you live, you’ll pay higher premiums for boating in an area with hurricanes (on the ocean), storm surges (on the great lakes), or other hazards. and you’ll pay less if you live in a no-cost state. That’s because lakes and rivers are often safer than the ocean.
You are likely to get low rates if you have a good driving record (ie no accidents, injuries or recent insurance claims on a boat or car). But your inexperienced teenager or your reckless cousin who has totaled three cars? not so much.
what boat insurance discounts can I get?
There are many ways to save money on boat (or even car) insurance. you can get discounts if:
what does boat insurance cover?
Boat insurance covers many costs of an accident, such as repairs, salvage, and medical bills. Let’s discuss the types of coverage you can get.
Liability is the most important type of boat insurance. pays the other person’s repair and medical bills after an accident you caused. What if someone sues you? your liability coverage should help pay legal fees.
You can even investigate guest passenger liability, which covers you if someone driving your boat with your permission causes an accident
Liability also covers repairs to docks or other objects you hit, plus cleanup costs for oil and other contaminants released into the water by your boat. (Which is good since cleaning up even a small oil spill is incredibly expensive.)
Without liability coverage, you will have to pay for damage to boats, docks, personal property, a person’s health, or the environment. that’s a lot of money. so play it safe and let the insurance company pay for you.
physical damage coverage pays to repair or replace your boat if something bad happens to it, such as:
You can even get an “all risk” policy: Unless a risk is specifically excluded, your insurance will cover anything that happens to your boat, even sinking.
How much your insurance company will pay to repair or replace your boat depends on the type of physical damage policy you choose.
agreed value policy
You and the insurance company work together to decide how much your boat is worth, and that’s the most your insurer will pay you after a covered accident. therefore, if the agreed value of your sailboat is $95,000, your insurer will pay up to $95,000 to replace or repair it.
Agreed value policies offer great coverage for most boats. but if you own a rare ship that is increasing in value, it will eventually exceed the agreed value you chose. that’s where the next kind of policy comes into play.
actual cash value policy
This policy pays up to the market value of the boat on the day it was damaged. that means you should be able to restore your ship or buy a similar one. you just won’t be able to upgrade with the insurance company’s penny.
For example, suppose your ship is worth $12,000 and it sinks. The insurance company will only pay you $12,000, even if you originally paid more to buy the boat.
This coverage helps pay for medical expenses if you or your passengers are injured on your boat. can cover all kinds of injuries from collision with another boat or even from plummeting with water skis.
Personal Property coverage helps replace the loose accessories that made your boat so much fun in the first place, like your fishing gear, navigation system, and personal items.
You can even get insurance for your boat trailer (which can be helpful if you’re new to driving trailers).
vessel without insurance
Imagine a speedboat creating a large wake and pushing your boat against some sharp rocks. your boat is damaged, but the other guy has no insurance. ouch!
Uninsured watercraft coverage will help pay for repairs (or medical bills if you or your passengers are injured). that’s much easier than suing the other boater or, worse yet, having to pay the bill yourself.
If your vessel becomes disabled on the open sea, you will need to tow it back to shore. that’s what helps pay for salvage insurance.
You can also get insurance to help pay to get your boat out of the water if it sinks; otherwise the wreckage could become a hazard to other boaters and cause even more accidents.
what boat insurance does not cover
One thing boat, home and auto insurance have in common: They don’t cover every situation. This is what boat insurance does not cover.
Ships age and wear out like any other machine. so your insurer will not pay for aesthetic or mechanical problems arising from normal use.
While your insurance policy may cover mechanical failure if it’s out of the ordinary, it won’t cover manufacturing defects or things that broke because you misused or didn’t take care of them. (so you may want to clean out that clogged water pump now).
animals can be a big danger to surf, literally. If an encounter with a dolphin, manatee, or other marine animal damages your boat, chances are your insurance policy won’t cover it.
(by the way, it pays to know what animals live in your boating area so as not to harm them, your boat or the environment).
another animal that is not covered? mussels! These little guys can do a lot of damage. but the insurance company will not pay for it, nor for damage caused by bugs, mold, or other infestations. it’s smart to check your ship and weed out unwanted passengers.
improper storage and transportation
Did your boat fall off the trailer because you didn’t tie it down? is your “winter storage” in the yard? your insurance company will attribute those damages to your negligent behavior and make you foot the bill.
crashes beyond your browsing limits
Your boating limit is where you and the insurance company agree you can boat. your insurance policy only covers you in that area. sail out of it and you’re on your own.
accidents outside your waiting period
A waiting period is when you take your boat out of the water for a while (usually the winter). if you use your pot after your tray starts or before it ends, you won’t be covered.
underage or nameless operators
Each state sets its own rules about how old a child must be before they can drive a boat, so check your local laws before letting them take the helm. And if your child (or another adult) drives your boat regularly, it’s smart to put her name on your insurance policy.
Where can I get boat insurance?
The easiest way to get boat insurance is to work with an independent auto or homeowners insurance agent.
Our network of Local Endorsed Providers (ELPS) will compare policies from multiple insurers to find the best one for your vessel. And our agents will go one step further, teaching you how to really understand your boat insurance policy so you can be sure you’re getting the insurance you need, without the costly extras.
connect with an agent near you today.