Boat Insurance 101: What Does It Cover?

What Does Boat Insurance Cover - Different types of boat for different types of insurance

The water has something to offer everyone. You might love being on the open ocean where you can see the curve of the planet, or you enjoy kicking back in a small boat on a lake with a fishing line in the water. And then there are those who enjoy watersports–water skiing, jet skis, speed boats, etc. What’s not to love?

No matter how you get out on the water, it’s important to make sure you’re covered with the proper boat insurance. Otherwise, you could be on the line for some pretty big expenses in the event of a boating accident between property damage, injuries, and legal fees, the bills can add up quickly.

Thankfully, boat insurance gives you the peace of mind you need to take out your boat with confidence. Here are answers to some of the most common questions about what boat insurance cover.


What is Boat Insurance?

Boat insurance covers most motorized watercraft including fishing boats, pontoon boats, speedboats, and luxury yachts. Many smaller vessels, like kayaks and canoes, may fall under your homeowner’s insurance policy.

Think of boat insurance as a sort of mix between the concepts behind home and auto insurance. Your specific coverage will depend on your policy and whether you choose to purchase just liability or comprehensive insurance plans. You have many options regarding insurance coverage including extra coverage for fishing equipment, personal belongings as well as other boat accessories; all of which impacts the overall cost of boat insurance.

Boat insurance functions like home insurance since it covers you in the event that someone is hurt while on your boat. It also functions like car insurance since it covers you if property is damaged (either yours or another party’s) or a person is injured in an accident or collision.

In addition, liability insurance for your boat can also cover pollution (if you have an oil spill) and wreckage removal and clean-up.


How Much is Boat Insurance?

In short, it depends. However, many insurance professionals advise purchasing at least $1,000,000 in liability insurance. You’ll want to take several factors into account when deciding how much insurance to secure for your boat.

  • What type of boat is it?
  • How old is the boat?
  • How large is the boat?
  • What will be the primary purpose of the boat?
  • What is the engine size?
  • How much is the boat worth?


For example, if you buy a new speedboat meant for water sports, you’ll want a higher insurance policy than you’d get for an old fishing boat.


In addition, you can opt for insurance add-ons like fire and flood insurance, personal property insurance, vandalism insurance, etc. A trusted insurance agent can help you select the right policy for you and your boat.

Are Passengers Covered by Boat Insurance?

Passenger on boat and types of insurance - How Much is Boat Insurance?


Yes. Passengers on your boat are covered by your insurance. However, not all boat insurance policies cover water skiers behind a boat in an accident. If you intend to use your boat for watersports like skiing, tubing, wakeboarding, etc., it’s a good idea to discuss your insurance needs with your agent.


Where Is My Boat Covered?

Your individual policy will address the specific coverage for your boat, but many policies cover inland waters in the US as well as coastal waters. Your coverage’s geographical limits should be outlined in the navigational warranty contained in your policy. If you need international coverage, be sure to discuss that with your insurance agent or insurance company. Please note that some areas of the world may not be covered due to safety or political concerns; your agent can clarify any such restrictions and recommend extended boat warranties.


As a point of interest, your boat is often covered under different forms of insurance. For example, when you are towing your boat behind your car or truck, it falls under your auto insurance, not your boat insurance. You may also have limited coverage at home under homeowners insurance. You can find out more by looking through your home and auto insurance policies.


Does the Insurance Cover Other People Driving the Boat?

Yes. Members of the owner’s family and others with express permission to operate the boat are covered by boat insurance. However, this does not cover anyone who is being paid to operate the boat for the owner, like a captain or crew. If you choose to rent or lease your boat to other people, they will not be covered under your insurance.


If I Hit a Rock or Other Debris, Am I Covered?

This will depend on the type of insurance you take out on your boat. If you just have liability insurance, you might not be covered. However, if you chose comprehensive coverage and/or property damage coverage, your policy will likely cover any collision with rocks and other marine debris.


Does Boat Insurance Cover Storm Damage?

This will largely depend on your specific policy. If you live in an area that is often subject to typhoons, tornadoes, windstorms, hurricanes, tropical storms, etc., make sure to discuss available coverage options with your insurance agent.


If cold weather is a factor, make sure to discuss coverage options for ice and freeze damage. This can offer you greater protection in the event that your boat sustains damage because it is not properly winterized.


What About the Months When My Boat Isn’t Used?

Some policies allow discounted premiums for months when you don’t use your boat. To find out if your boat qualifies for such a discount,ask your agent about lay-up periods.


There you have it! Boat insurance is a common type of insurance that is pretty similar to the homeowners and car insurance policies we’ve become familiar with. As always, it’s a good idea to go over the details of your boat insurance policy with a knowledgeable insurance agent.


Now go and have some (safe & properly insured) fun out on the water!