New Jersey Boat Insurance

New Jersey

New Jersey’s maritime history extends far beyond the founding of the United States. Its central role in international trade began taking form, however, in the early 1800’s.  Strategically placed at the mouth of the Hudson River, and adjacent to the commercial hub of New York, much of New Jersey abuts the Atlantic ocean, providing a great launching and landing location for boats making an Atlantic crossing.

Today, boating in NJ has changed dramatically. Commercial vessels are still a common site up north near the mouth of the Hudson and New York City. However, most of today’s boaters in New Jersey spend their time leisurely enjoying their summers at or around “the Shore”.  For those not accustomed to the local lingua, “The Shore” does not describe any particular beach. It typically refers to the thin strip of land on the Atlantic Ocean, and is packed with beaches, hotels, bars, and of course, boats.

Despite the fame of “The Shore”, New Jersey is home to many other boating hot spots. Whether you’re interested in a kayak or sailboat on Atsion lake, or a power boat on Lake Hopatcong, New Jersey has something for everyone. For those boating in NJ soon, or those that hope to one day, we hope the following information is helpful in your endeavors.

New Jersey Boat Insurance

Do you need boat insurance in New Jersey?

Much like 48 other states in the U.S., New Jersey does not require boat insurance for registered vessels. The state government does highly recommend insurance, however, given the large numbers of boats, relative to New Jersey’s size. Such density of boat traffic makes New Jersey particularly prone to boating accidents. In fact, New Jersey suffers only 50 fewer accidents per year than New York, despite a population half the size. Given the risks, you certainly should get insurance, but you may not have a choice. This requirement exists primarily in two circumstances

  1. Loans: If you use a loan to purchase your vessel, your lender will likely require you to get New Jersey boat insurance. If the lender doesn’t insist upon insurance, you should probably look for a different lender. Lenders require insurance for boats for the same reason that they do for houses. They are several thousand (or hundred thousand) dollars in the hole until your loan is paid off. In the event the boat is in an accident, they don’t want to be left without compensation. The bank or other lender will be listed as the lien-holder on the policy, so your check from the insurance company would likely list them as the co-payee.
  2. Marinas: You may not face this if you keep your boat on a trailer. However, most marinas, yacht clubs, and dockyards throughout New Jersey will require you to show proof of insurance if you plan to dock there. Their reasons are simple. If your boat damages another, they want you to have the means to cover it.

The Stats:

In 2014, property damages in New Jersey boating accidents reached $217,000, or an average of $5,200 per accident. Now, you may be an excellent operator, but everyone makes mistakes, and $5,000 is a lot of money. In addition, that figure excludes the damages paid for hospitalizations and injury treatment. We all know how expensive medical bills can get. Paying them out of pocket just isn’t an option for most of us.

New Jersey boating accident statistics

For most vessels you can find New Jersey boat insurance for a few hundred dollars a year. That should include insurance for your own boat, and liability insurance. Liability insurance will come in two forms:

  1. Property damage liability insurance: coverage for damage your vessel causes to another vessel, dock, or building in an accident
  2. Personal injury liability insurance: coverage for any medical bills that result from an at-fault accident.

You have the ultimate decision as to what level of coverage is sufficient. If you take your small pontoon boat out on lake Hopatcong with similar small boats, you probably don’t need a million dollars in property damage coverage. If you take your cruising catamaran out on the ocean, however, you may want it. Our advice, as always, is to be smart, and exercise caution. Insurance costs a lot less than the damage does in the vast majority of accidents.

New Jersey Hurricane Insurance

While much of the Mid-Atlantic has become accustomed to the opportunities and dangers of living on the ocean, Hurricane Sandy was an entirely novel experience for New Jersey. Although it had weakened to “merely” an extra-tropical cyclone, Sandy still caused roughly $30 billion in damage, primarily to homes and businesses. Such storms are rare as far north as new Jersey. Residents of Florida, Georgia, the Carolinas, and the Gulf states have become accustomed to hurricane season. The Northeast? Not so much.

Given the relative infrequency of such massive storms, you will have to decide whether to pay for hurricane coverage. Warming ocean temperatures will allow hurricanes to last longer as they churn north. As a result, another Sandy-like storm in the next few years is far from impossible. Many insurance companies stop offering hurricane coverage as soon as a hurricane gets close. That being said, hurricane coverage is usually fairly cheap in new Jersey, as such storms do occur infrequently.

Ultimately, of course, the decision is yours. You might buy hurricane insurance and find that you never use it. But the memory of Sandy in 2012, and Irene in 2011 should at least provide the incentive to look into it. You never need hurricane insurance until you need it, and then you really need it.