What does Boat Insurance Cost?
Boat insurance rates vary widely. Prices tend to range from 1%-5% of the boat’s assessed value/yr, so how much you pay will depend heavily on what kind of boat you own. Your boat insurance cost can range from a few dollars a month to thousands, depending on what you are insuring and how extensive your coverage is.
2% of this boat’s cost…
is very different than 2% of this boat’s cost
Boat Insurance Cost Prediction
For the sake of argument, Let’s say You own a 19-foot motorboat that costs $20,000, and your premium is 2%. 20,000 X .02 = 400.
So you could expect your premium to cost you around $400 per year.
Now, If you eliminate certain items from your insurance package, you can bring your rate down. In the page below we’ll discuss the myriad factors that can Increase or decrease your premium. You should be careful about cutting too much of your coverage, however. You may find yourself in trouble if your boat gets into an accident.
That’ll cost a heckuva lot more than $400.
Make sure to take your boat’s insurance cost into account before you purchase a boat. If the likely insurance costs take a boat out of your price range, be careful. Boat salesmen are unlikely to tell you how much insurance on that ski boat will cost you. If you buy a boat at the top of your price range, you might be tempted to go cheap on insurance to save money. That can leave you stuck if something goes wrong, though. You don’t want to find yourself making loan payments on a boat you can’t use, with no recourse because you skimped on insurance.
Policy terms that are likely to affect your boat insurance cost.
Hull-only insurance: This covers exactly what it sounds like. The gear on your boat doesn’t qualify. Electronics like RADAR, GPS, or fish finder do not qualify. Perhaps more importantly, it does not cover liability in case of an accident, or healthcare if someone is injured. Both of these can run tens (or hundreds) of thousands of dollars if you are uninsured.
I’m going to need your name, date of birth, vaccination records, and $45,000.
Liability insurance: If your boat is cheap enough for you to sustain its loss, you can buy liability insurance without protecting your boat at all. If you spent $500 on an aluminum runabout and don’t think it’s worth paying to insure it, we highly recommend at least purchasing liability insurance to protect you in event of an accident. Liability insurance comes in two forms: Property damage liability and Personal injury liability. You can read more about the distinctions on our terminology page. Liability insurance is usually cheap, and it can save you thousands if you need it.
What will influence your boat insurance cost?
What kind of boat you have: An older boat will often cost more to insure than a newer boat of the same price. The type of boat you own can also impact coverage. Most insurance companies will distinguish between a ski boat, a fishing boat and a sailboat, even if they all cost the same.
Where you boat: If you stick to local waterways and lakes, your insurance costs are likely to be lower. If you take your boat to other states (or other countries) you can expect your rates to jump, as Insurance companies will assume a higher risk.
What kind of engine your boat has: People with high-horsepower engines tend to use them. As a result, insurance companies are likely to charge you more for faster boats with larger engines.
Two engines and four exhaust ports? Your insurance broker just woke up in a cold sweat.
Geographic region: If you live in the South, where people often boat year-round, your rates are likely to be higher. Similarly, if you live in a hurricane ‘hot zone”, which encompasses the entire coastal Southeastern United States, insurance companies are likely to take that risk into account and raise your rates. Additionally, some policies in these “hot zones” may include special conditions. For instance, you may need to provide a storm plan, detailing what you will do in case of a hurricane. Some policies will require that you store your boat in a hurricane-proof facility, while others will want you to move it to a safe harbor.
Whatever the plan, make sure you follow it if a storm threatens. Your coverage is likely to depend on it. In addition, make sure you include these requirements when you assess the true cost of your boat insurance policy. Some policies require expensive storage systems and certified marinas that may take the policy out of your price range.
How do you use your boat?: Do you use your boat every day, or infrequently? Will you fish with it, or hunt? Do you drive out on the water and relax, or wakeboard behind it? This is all information that can impact your coverage, and it is important that you are straightforward with your insurance company. If your passenger is injured in a wakeboarding accident on your “fishing boat”, the insurance company may very well refuse to cover it.
“Yep, I mostly use it for fishing and charity work.”
Who will be driving the boat?: The more drivers you add on your policy, the higher your premiums are likely to be. If you include your teenage children, expect your rates to jump.
- Where do you keep your boat?: Is it on a trailer in your yard? Do you keep it in a slip, on a mooring, or in a hoist on your dock? Generally speaking, the more your boat is exposed to the elements, the more insurance companies will charge you. In addition, many marinas may require you to have liability insurance up to a certain amount (some require $500,000, others up to $1 million). We highly recommend liability insurance anyway, but you will pay more for that higher level of protection.
- Do you live on your boat?: If your boat is your primary residence, this will impact your policy cost. In addition, many insurers won’t cover you. You’ll need to find one that offers liveaboard insurance.
- Your driving record: Insurance companies will take both your automobile and boat driving records into account. More careful drivers tend to be more careful boaters.
- Deductible: As with all insurance, the more you’re willing to pay before your insurance kicks in, the lower your premium will be.
Boat Insurance Policy Add-ons
These are additional features that you might consider for your boat insurance policy. They are likely to drive up the price somewhat, but they can pay off hugely if you wind up needing them. Like, say, if you find yourself needing a tow 30 miles offshore.
Tow Insurance: Getting a tow without insurance can be outrageously expensive. It is not uncommon to hear costs of $300/hr. If your engine dies in open water and no help is around, you will be eternally grateful to have tow insurance. Boaters on small inland lakes and rivers can probably live without it.
You won’t see too many of these on Lake Minnetonka.
Cruising Extension: If you travel abroad in your boat (often to the Bahamas, Canada, or Mexico) you will likely want this temporary coverage, as your normal policy is unlikely to cover you in another country. If you travel to other countries with regularity, you may want to shop around for a more international policy.
Specialized Coverage: You may want specific insurance for expensive items that won’t be covered by your regular policy. If you’ve just bought a new RADAR system or an electronic winch, your insurance company won’t consider them part of the boat, so you’ll need to insure them separately.
The Bottom Line
Boat insurance can get expensive, so it’s worth considering before you buy a boat. The bottom line is this: make sure you understand the dangers your boat will be subject to. Once you’ve done that, make sure you buy an insurance policy that covers those contingencies. Insurance policies often use vague language, so if you think you might not understand every term they use please check out our page on Boat Insurance Fine Print. In it, we do everything we can to break down industry jargon into language we can all understand. As always, if you have any questions, or need something clarified, feel free to reach out. We are happy to answer any and all questions to the best of our abilities.