Questions About Boat Insurance

This page is dedicated to answering your questions as they come in. While we may not post all of our answers, once enough people have asked something or if we think that the answer is an interesting or important one we will post it here. Some questions will require longer answers while others will only require a few lines and links to other good resources. Here are the top questions about boat insurance that we’ve heard:

 

The Basics

What is Marine Insurance?

It is usually best to begin at the beginning. Marine insurance, or boat insurance, is way to protect yourself from damage that your boat, hoist, or dock may sustain (or inflict) in an accident. If you do not have insurance, such damage can easily cost thousands of dollars, even in relatively minor incidents. Marine insurance works just like auto insurance. If you are involved in an accident that falls within your coverage parameters, your insurance will protect you financially. 

Do you need boat insurance?
  • The short answer is, generally speaking you are not legally required to have boat insurance. There are exceptions in certain states, however. Vessels that transport or house people do have insurance requirements in some states, but this is highly specific state by state. That said, there are other reasons why you might “need to have insurance on a boat”. Most commonly these non-legal requirements come from banks. Much like homes with existing loans on them, insurance is often a required term for the loan to be valid. Banks tend to be afraid of losing their collateral, should something happen. Even some marinas and private lakes or waterways require insurance.

  • Even though insurance is not always required, neither is knowing how to swim or passing a boater driving test (in most jurisdictions). No one is likely to argue that boating without knowing how to swim or operate a boat is a good idea, though. In almost all circumstances having some level of boat insurance is a good idea, even if it does not cover your vessel itself. While this might sound counter-intuitive, in many bad accidents the liability coverage turns out to be most important. Your liability coverage will protect you if anyone is injured or killed in an accident, or if someone else’s property is damaged.

  • So, to be clear, is it required? Probably not. Is it highly recommended? In almost every imaginable circumstance, yes.

How much does boat insurance cost?

The short answer is that the average boat insurance price tend to range from 1%-3% of the boat’s assessed value, per year. Boat insurance rates vary widely, with costs ranging from a few dollars a month to thousands. Your costs essentially depend on the property you are insuring and how extensive your coverage is. For more information please see our page on boat insurance costs.

What does boat insurance cover?
  • All policies cover different things to different degrees. Nevertheless, the three major categories are: coverage for your boat, coverage for other boats (in the case of an accident where you are at fault), and coverage for the people involved. The latter is generally the factor that varies the most between policies. The extent and the areas of coverage can vary substantially and can include elements of life or dismemberment insurance.

For more information, click here to read our page dedicated to understanding your policy.

Does car insurance cover boat trailers?

In many cases, your car insurance will cover your trailer, though for cheaper policies this should not be assumed.  Furthermore, for many car insurance policies, coverage of boat trailers is limited to damage when not in an accident with another vehicle and the damage to it.

Does car insurance cover your boat when towing it?
  • In many cases your car coverage will extend to the trailer it is towing.  This should be viewed though as limited to liability coverage.  If your trailer is not specifically limited on your policy as part of it, your total level of reimbursement will be limited.  Therefore, to maximize your coverage, and to guarantee what is covered under your specific plan, it is always best policy to talk with your insurance broker about what your car insurance policy covers when towing your boat.
  •  For those interested in the impact of this policy when towing another’s boat or an organizations boat (often a camp, school or yacht club) please call both your insurance company and the respective organizations insurance company as you very well may be covered by their existing policy.
Does hauling a boat effect car insurance?

For most policies, simply hauling a trailer with a boat on it does not have an effect on your car insurance.  That said, just because it does not directly impact the insurance on your car does not mean that your boat or trailer is automatically covered.

Does homeowner insurance cover boats?
  • Yes, in many cases it does, though the question of whether it makes sense to use it remains more open.  For most boaters this policy is helpful under the conditions that the owner is prepared to pay low levels of repairs following accidents.  This is the result of the deductible to expense ratio being high.  For those that are expecting for the policy to pay out easily, the relatively high level of the deductible on most homeowner insurance policies result in any use being expensive to the policy holder.  Second, this is because going forward, once you have used your home owner policy for a potentially low expense, especially when considering the cost of the deductible, your future home owner insurance rates will result in higher payments that often exceeds the benefits you may have gotten from initiating the policy in the first place.
  • It is also important to remember that these policies often cover trailers but just like its coverage on boats, this coverage is likely limited when your trailer collides with someone else.  For those who believe this sounds ridiculous, know that your policy is predominantly intended for your boat when it is stored and when it is in use on the water.  The road, as we know from auto policies and accident rates, is a dangerous place, and is not something home policies are intended to cover.
Does boat insurance cover other drivers or Does liability boat insurance cover others using your boat?
  • While these questions sound quite similar to many people, they are actually quite different.  The former is a particularly contentious one as owners often do not ensure that their family members (daughters, sons, brothers or sisters) are specifically listed on the policy.  While most policies will automatically cover your spouse, and some dependent children, some do not, and very few if any ever cover anyone beyond that circle.  To solve this most companies allow you to enter a few people you would like covered by the policy, who once entered into the insurance companies database, will be covered.  This can be slightly more expensive but is well worth while if the boat is being used regularly by someone other than yourself.  Finally, if this coverage does not seem adequate for your situation we recommend considering an umbrella policy which can go a great deal further in protecting you and other operators of your vessel.  That said, the details can vary substantially with these types of policies so make sure to review them carefully.
  • The second one can generally be thought of as focusing more on the passengers on your boat at a given time.  These people are using your boat, but are not operating it.  In this case, virtually all policies, that include medical liability, will cover them to some extent, though the details can vary based on who is found at fault (in the case of a collision).
  • Finally, it is important to note that very few policies at all cover your boat if you are renting it and not simply loaning it to another person.  For this reason, many boat renting websites have specific policies to cover the damage to the boats of their boatowners.  Note: some of these companies require you to pay for this coverage while others do not. Because you often do not know the renters experience, it is always a good idea to make sure that you are covered.
Do boat loans require insurance?

Almost all boat loans require boat insurance.  We say almost, not because we have ever seen one that does not, but because we have heard that some people, with strong relationships with banks have been able to avoid it before, though it has been some time since we’ve heard about this. 

Regardless of the official bank policy, we strongly recommend getting one.  This is not only because if your boat was to be destroyed, either by sinking or some accident, that you would be liable for ongoing payments, but because your rate will almost be substantially higher, thus reducing any rational for avoiding such a policy.

Does boating citation affect insurance?

Boating citations do not typically impact your boats insurance.  There is however one glaring exception, boating under the influence.  This can both result in higher boat insurance rates but also substantially higher car insurance rates.  While not something you want to think of, it is worth knowing that BWI (boating while intoxicated) is generally reported on your driving record and thus will be used more broadly.

Does boat insurance require appraisals or surveys?

This generally depends on the boat you are referring too.  If the boat is under 26 feet, not more than 10 years old and worth less than $50,000 it is less likely that you will need one.  That said, depending on the provider and where you are looking to get coverage that might not be the case.  Further more, larger, more expensive and especially older boats regularly require marine appraisals or surveys.  These can cost several hundred to several thousand dollars depending on your boat and the time it takes the surveyor to do their report.  Furthermore, and especially with sailboats in warmer climates, insurance companies may require you to pull the boat out of the water for inspection of the hulls water saturation.

Does boat insurance cover sinking?

Yes, virtually all boat insurance policies cover the sinking of a vessel.  While most policies include some portion of the value (replacement or otherwise) of your current vessel, the question that you should focus on when considering this potential, is whether your policy covers the haul out of the boat as many marine areas legally require it.  As this process can be quite expensive it is important to make sure you are covered in this instance.

Does boat insurance cover storage?

Generally, yes, though some cheaper policies exclude this in order to offer you a lower rate.  It is important to properly winterize your boat to ensure that the policy will be enforceable as some policies require certain procedures to be followed or for the boat to be stored in a specific manner or location.  Generally though, if you are keeping your boat at a marina or inside a safe storage shed you will be covered, though exceptions abound.

Does my boat insurance coverage cover me outside the US?

Are you talking about Canada, Mexico or Barbados?  The first is the most common while fewer (but some) include short stints to Mexico as a part of their policies.  Beyond that, look for a new one as your current policy almost certainly will not cover you.  Typically international, or multi national policies come from British insurers with a great deal of experience covering boats crossing oceans or operating in developing countries and remote locations.

Do yacht clubs and marinas require boat insurance?

Almost always, and this is especially the case with facilities in areas prone to storm damage and surges.  While the specific amount and conditions of validity can vary substantially, the reason is relatively simple.  When using your boat you may cause damage to those around you when docking or taking off for the day.  Collisions in these instances are actually quite common.  Second, when your boat is docked and a storm comes through it is possible that it will become disconnected from the dock and cause damage to those boats around it.  For this reason, and a belief by many that the marina will pay lower insurance itself with this as a requirement, most places do require some form of insurance, though the actual inspection of your policy is far less common.

Is boat insurance expensive?

We get this question all of the time, and just as is your boat expensive it depends.  We recommend looking at our page detailing how much does boat insurance cost to get an idea relative to your situation.

Is liveaboard insurance more expensive?

Typically, yes, though it varies more based on state than other variables.  Typically, liveaboard insurance is harder to obtain if you are not staying in a marina or facility with services.  Finally liveaboard insurance can be even more complicated in states known to be in a hurricane zone (consider everything on the Atlantic south of Cape Hatteras) or an area known for particular flood surge potential.  While similar to typical boat insurance increases for these regions, liveaboards provide increased risks as they may not have other options for shelter and have more of an incentive to stay with their boat (thus increasing the insurance companies medical liability risk).

Does my boat insurance cover my trailer?

Generally, you need to add this on to your policy and if you do not the coverage is likely to be very limited.  That said, some form of coverage is likely, though not guaranteed, related to your car or auto’s insurance policy.  If you have a particularly nice trailer it is worth bringing up with your agent to confirm whether or not and to what extent it is included in your auto and boat policies.

Does boating insurance pay medical costs for accidents?

Historically, most boat insurance policies include a provision for medical costs.  That said, today, as firms increasingly compete on price some of them are removing this component from their policies.

Do you need a drivers license to get boat insurance?

Yes, in virtually all circumstances that we have heard of you need a drivers license to get boat insurance.  That said, some insurance, such as boat tow insurance, does not generally require this. 

How do I cancel my boat insurance policy?

The easiest way to cancel your policy to reach out directly to your agent to cancel your policy.  If you are not able to get ahold of your personal broker, reaching out to the insurance company directly on your file is generally acceptable, though make sure to mention that you have tried to reach out the broker first.  This happens from time to time, when a broker goes out of business, moves or passes away and the firm is generally receptive.  It is important to note that while some cancelations will become effective immediately, most policies take between 3 business days to a week to cancel your policy.

Does boat insurance cover mice?

This question, often termed by insurance companies as rodent coverage is one of the most commonly shocking questions to boaters, generally for two reasons. While boaters know that mice, rats and squirrels can build a home in your boat and cause some damage, almost all boaters are shocked at the extent to the damage and the cost that accompanies it.  This comes not only from having to replace seat cushions and bibanies, but wiring as mice in particular are known to chew on it.  Second, owners are generally shocked that these issues are generally excluded from their policies.  We have heard of boat owners having their engines destroyed my mice chewing one a few wires and then not checking them before heading out (this is one of the many reasons we recommend following our checklist when getting your boat ready in the spring).

How many boat insurance companies are there?

There are hundreds if not thousands of companies that offer boat insurance in the United States.  That said, the majority of polices are a part of national home and auto companies.  For more information on U.S. boat insurance providers click here:

Outside of the United States the number of providers can vary substantially.  For more information on boat insurance providers outside the US click here:

What companies offer boat insurance?

Most of the major car and home insurance companies offer boat insurance along with a whole host of smaller firms. The questions that matter most are where you live, what kind, size and age of a boat you have and what kind of features you require in a policy. Companies often specialize in regions, states and for various special purposes (commercial, ocean crossings, hurricanes) so if you believe you will or may face one be clear when considering polices and agents.

For a full list of companies we have taken a look at click here:

Does boat insurance cover me against theft?

Most likely your policy will include theft of your vessel both in and out of the water.  Again, cheaper policies that are not “comprehensive” may eliminate this benefit.  Typical policies include the value of the boat, though not necessarily the replacement cost.  Additionally, boats that have high value items on them should make sure they know what is specifically covered as data towers, gps units, radar units and fishing equipment such as fixed downriggers may not be considered as a part of the boat, even though they are bolted to the hull.  For other items, including personal ones, most policies do not cover them unless they are explicitly stated in the contract.

Is lightning strike covered by boat insurance?

Almost certainly, though the actual expense may exceed the level of coverage you have agreed too.  Taking a step back, for those interested in whether boats can or do get hit by lighting, they do, and for sailboat owners the risk is known to be particularly pronounced.  As lightning is attracted to the highest object in a given area, and is particularly attracted to metal objects, sailboats risk, especially when away from shore, can be substantially accentuated, especially relative to smaller power or pontoon boats tied up at a dock.  That said, even though the risk seems inevitable, one should not think through proper lightning strike procedures to protect your boat.  Due to the extremely high voltage of lightning it often does not take a direct strike to cause significant damage to electrical components on a boat.  While people may often, and correctly think this may include an installed GPS, but it can also impact speed, depth and other gauges, batteries and the actual wiring in the walls.  While replacing any of these components could be expensive, replacing wiring, especially on larger vessels, can be extremely expensive and for older boats frequently will exceed the coverage you have signed up for.

Is boat insurance paid monthly or annually?

The frequency of your boat insurance payment can come in many forms, though more often than not is a single lump sum.  First, if your policy only covers you for part of the season, as can be the case for many northern boat owners on a budget, the policies are generally a single lump sum.  That said, due to the length of time being covered, the total cost can be less.  For those signing up for annual coveragethere is greater variation, especially with a bimodal (two times a year) payment that happens just before and just after the season. For people interested in the pricing breakdown here, they are generally the same, though we have heard of some policies varying with slightly cheaper options being offered during the winter.

Does my insurance cover my boat when it is out of the water?

This question has a lot of overlap with the question about is your boat covered in the winter.  That said, for those who may not use a boat during a given year, or who tend to launch later in the season, knowing your coverage status is important.  In most cases your boat is insured when it is out of the water, though some acts such as vandalism, rodents or damage by unknown vehicles may pay out at different levels. *Tip make sure to ask you insurance provider about a lay-up discount which should cover the entire time your boat is out of the water.

*Tip make sure to ask you insurance provider about a lay-up discount which should cover the entire time your boat is out of the water.

How to get boat insurance?

Getting boat insurance is easy, getting the right policy is more complicated.  We recommend shopping around as many providers offer it and prices can vary substantially.  Shopping through your existing home or auto provider is very common, though for those venturing further from their home state or to foreign countries are more likely to find better advantages talking to additional brokers.

Does boat insurance cover engine damage?

It seems almost everyone at some point in their boating career asks this question, unfortunately its often after something has gone wrong.  Fortunately for instances of manufacturer defect, most insurance companies cover the majority of this cost, though it may be partially subject to depreciation.  Engine damage as a result of use, and especially for older engines, is far less likely.  As the engine for your boat often is a large percentage of its overall value, it is particularly important that you maintain it over time and know what your specific policy says in respect to coverage for common issues such as “blown engine”, “lower unit” and “run aground damage”.

How much boat insurance do I need?

This is another one of those it depends questions.  From our research we’ve found 250,000-300,000 to be somewhat a center point for recommended coverage.  That said, for pontoon boat owners with a 15 horse power engine on the back who really enjoy anchoring a couple hundred yards from their slip might justifiably find this figure outrageously large.  On the other hand, high speed race boat or ski boat owners who frequently zip around at high speeds in traffic may want to double or even triple this amount of coverage.

Our recommendations are as follows, break up this question into two pieces.  First, consider what, if the boat was to sink, you would want back.  The full value of the boat today? Replacement value? Taxes?  These are tough questions that only you can answer.  Second, consider what liability coverage you are interested in receiving, both for damage to other boats should that occur or to your passengers and passengers on other boats you may be found at fault with.  We often find people focus too much on the former and not enough on the ladder as personal injuries can be extremely expensive.

What is boat dock insurance?

Boat dock insurance is insurance for your dock from damages to it from weather, your boat, other boats and injuries to individuals on the dock, most often from entering or exiting your boat.  Depending on your relationship with where the boat is being stored, whether your own it attached to your house, whether it is apart of a condo unit, or whether you rent it you will likely receive different levels of coverage from different sources.  If you own your home and your dock directly connects to it, it is highly likely that your home owner protection will include it as part of the property.  If your home is a condo, and the dock connects to the condo association property, it is likely that your policy, and potentially the condo associations, will cover the dock.  In both of these cases both physical damage and depending on your policy will likely include some sort of injury coverage as well.  Finally, if you rent a slip you are not covered by any existing home policy.  That said, if your boat has insurance on it you are likely covered by the policy so long as you are in the process of using the boat.  This will help cover some liability issues surrounding accidents entering and exiting docks and is another reason why we believe a strong boat insurance policy makes strong financial sense for boat owners.  Finally, if you rent your dock to others, you will almost certainly need business insurance to cover it as your home policy will likely not.

Does boat insurance cover Water Skiers, Tubers or wakeboarders?

While many policies do include those towed behind their vessels, it must be explicitly stated.  We see and hear of this all the time, people assume, since they are connected to the boat, that they are covered, but that can be a huge mistake.  While many of those that are injured may have minor injuries covered by their existing health insurance, many do not and for more serious injuries it is critical that you are covered appropriately.

Does my insurance cover me if I hit a log, rock or sandbar?

Yes, if your policy is comprehensive in its nature.  For cheaper policies coverage may cover a portion of it or nothing at all though the ladder is only likely if your coverage focuses on liability coverage only.  Remember, what happens after you hit an object can matter quite a lot.  Depending on the nature of your accident, whether you hit a log and are taking on water quickly or ran aground and only have a little water coming in and out, matter a lot.  Make sure that you have the proper procedures in order prior to know what you will do if this happens.

Is my boat covered during a hurricane, tornado or other severe weather storm?

If you have coverage to the damage of your boat, and you are within the restricted region identified by your policy, you likely are.  It is also important, most often with hurricanes, that you have your boat stored appropriately during the offseason.  Many boats stored in the Caribbean, or areas identified by insurance companies as high risk have specific procedures they must follow during certain periods of time during the year.

Do you need insurance for inexpensive boats?

Most boats are expensive, but from time to time there are older or smaller home build boats that are quite inexpensive and many owners rightfully ask themselves if they need insurance for them.  The key here is what do you need insurance for.  For hull damage or engine damage many are right and it is simply not worth it.  However, for most owners the risk of injury to their own guests and other boaters exist and can be significant.  In these cases we often see smart boaters buy policies that covers what they are most concerned about, medical liability or sunk boat retrieval costs for example.

I am a new boater, will my insurance be more expensive?

Yes, and in some instances you may not be offered coverage.  New boat owners, especially those that have not spent time previously on boats, are a huge risk to insurance companies.  For this reason it is suggested that if you are a new boat owner with limited experience that you take classes in the operation and maintenance of a boat.  This can both help lower your rate and help ensure that you will get offered a policy at all.

How can I save money on my boat insurance?

Saving money, who doesn’t want to do that?  The truth is there are a few things that you can do to lower the costs of your policy.  The ones we recommend most, involve taking approved classes that will both increase your enjoyment on the water and lower your policies costs.  While not all providers provide discounts for such classes, many do and many are worthwhile skills to have.

Is there a limit to how far offshore I can go before my insurance is invalid?

Many lake and river boaters will scoff at this question but it is something that many of us who have ventured offshore have had to keep an eye on.  All companies have a limit, unless you are doing a specified crossing, or have a policy designed for Caribbean cruising, though these have other specifications.  There are three common distances that we regularly hear about 25 miles, 125 miles and 200 miles.  Each provider has their own rational and they change over time so make sure you are up to date on what your limitations are.

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