Boat insurance costs vary considerably, depending on the insurance company and the region of the country you live in. Many other factors come into play as well, such as the size and speed of the boat, and how old it is. These and other matters will help determine the best boat insurance coverage for you.
Summer is right around the corner and it’s time to start thinking about the outdoor activities you can now enjoy outside. This includes getting out on the water for some boating fun. Maybe you love fishing, waterskiing, or just enjoying the view with a refreshing beverage.
Whichever boating activity is your preference, you’ll probably need to purchase some boat insurance. But it’s not as simple as just going out to get some. You need to consider exactly the right type of boat insurance coverage for your needs. Things to think about are what kind of boat you have, how and where you’re going to use it, and who else is going to drive it, among other things. Let’s take a closer look.
Is boating insurance required?
Unlike auto insurance, which is required in almost every state, boat insurance is not required in most states, but it’s definitely a good idea to have it. While homeowners insurance can often include small watercrafts such as paddle boats, canoes, kayaks, and boats with small motors, it won’t cover high-performance boats or most other types.
Even if by law you don’t technically need boat insurance, some private organizations require it. If you rent a mooring or slip, the organization you lease your spot from might necessitate that you have it for their own insurance purposes.
If you’ve financed the cost of the boat, insurance will likely also be required. Similar to needing car insurance, lenders will want to protect their investment. Plus, even if you pay cash for the boat, you will want to protect not only the boat itself, but any passengers that ride in it, as well as any fellow boaters you may come into unfortunate contact with.
Is boating insurance worth it?
In the calendar year 2020, the Coast Guard counted 5,265 accidents that involved 767 deaths, 3,191 injuries, and approximately $62.5 million dollars of damage to property as a result of recreational boating accidents. Insurance won’t prevent accidents, but it can help to mitigate the damages, including help with medical bills.
Additionally, you will want to consider what could happen to the boat when you’re not using it. Wind, hail, lightning, and other weather can all do considerable damage. It would be a shame to lose a sailing vessel that cost $10,000 because a vicious storm destroyed your boat and you failed to obtain a boat insurance policy.
The bottom line is, even if you don’t fall under any of the qualifications to need a boat insurance policy, it makes sense to have one. Boating accidents happen all the time, and it’s best to be protected against catastrophic bills, such as property damage and medical expenses.
How much is boat insurance?
That’s a good question, but there’s no quick and easy answer. As with most car insurance policies, boat insurance policies vary depending on the boat or watercraft you insure. To be safe, you’ll want to estimate a minimum of $200 to $500 a year for your average boat insurance — even more for bigger, riskier, or more expensive watercraft.
For example, your boat insurance rates will be higher for a yacht than for a small fishing boat. Yacht insurance is obviously going to come with the highest average boat insurance prices. You’re also going to be looking at much higher rates if your boat is used for business purposes or acts as your primary residence.
Why do insurance prices vary so much?
As mentioned previously, boat insurance costs can vary a lot — you will want to talk to a licensed insurance agent to figure out the exact amount. It depends mainly on the size, value, speed, and age of the boat. More valuable boats generally cost more, so it makes sense that insurance rates will be higher
For example, you might decide you only need liability insurance, which is of the utmost importance. Or, you might want more comprehensive coverage in the event that something should happen to your boat that’s out of your control. To make sure you find the policy that best suits your needs, you’ll want to compare insurance coverage and costs with different lenders before deciding on a plan.
Types of boat insurance
As stated, there are many variations of boat and yacht insurance and what exactly that boat insurance covers. Let’s take a look at some of your options, things you might want to add on, and how to value your boat for replacement cost coverage.
This is the most important type of boat insurance coverage. If you are involved in a boating accident and it’s your fault, liability insurance will cover the other person’s repairs and medical bills. It will also pay for property damage repairs to docks or other inanimate objects that you might damage in the course of your boating excursions.
Furthermore, this type of boat insurance can also help to cover your legal fees if someone sues you. It should be the minimum you consider when researching average boat insurance costs.
These boat insurance policies cost more but offer more comprehensive coverage. This will cover you in the event of multiple types of boating accidents (whether you’re at fault or not), and other incidents such as damage from weather, fire, vandalism, or theft.
Replacement cost coverage
There are two basic ways to go about having your boat repaired or replaced in the event of excessive damage.
- Agreed value policy. This type of policy describes when you and your boat insurer come up with the worth of your boat. This is then the maximum amount of money you can receive to repair or replace your boat. For example, if the agreed value is $50,000, you can only receive up to that amount to fix your boat or buy a new one.
- Actual cash value policy. This means that the amount of money you can get after damages is whatever the market value of the boat is at the time of the accident. This policy doesn’t take into account what you may have paid for the boat. If your boat is worth $10,000 on the day of your collision (but you paid $15,000), that’s as much as you’re eligible to collect.
Depending on the activities you enjoy on your boat, you might want to add a personal property rider to your policy. This will pay for things like boat accessories, such as your fishing gear, navigation system, and your own personal effects.
Similarly, if you need to transport your boat, you might want to include trailer coverage.
Uninsured watercraft coverage
This type of coverage can be cheaper than trying to sue someone who causes damage to your boat but doesn’t have a boat insurance policy.
Salvage or towing
In the event that your boat is damaged far from shore and needs to be towed, or injured so severely that it sinks, you might want to pay for these kinds of coverage. Without insurance, towing and salvage costs can be extremely pricey, so ask yourself if it makes sense to carry this kind of coverage for the type of boating you engage in.
Business or commercial insurance
This is a little different from standard boat insurance, but it could still be a valuable policy to have. If you run a business involving boats, such as fishing charters, you’ll need business or commercial insurance in addition to boat insurance.
Factors affecting boat insurance cost
Much like cars, the wide range of boats you can purchase will have an impact on the average annual cost of boat insurance prices. Here are some of the parameters that may affect your boat insurance costs.
- Kinds of boats. Fishing boats, pontoons, sailboats, yachts, personal watercraft like Jet skis, speed boats, or other types of boats all carry their own average boat insurance prices.
- Value. Like cars or houses, boats that cost more are more expensive to insure.
- Length. The general thinking is that boats are 26 feet or less, and yachts are 27 feet or longer. Insurance costs are higher for bigger boats.
- Boat speeds. Faster boats tend to be riskier, which generally makes them candidates for higher-priced boat insurance.
- Age of boat. Boat insurance rates are typically less expensive for older boats. However, if you have an antique sailboat in mint condition, the cost of boat insurance might actually be higher than for a newer boat.
- Cruising area. Average boat insurance prices vary depending on where you use the boat. Because of the higher risks of ocean travel, boat insurance will generally be higher than boating on inland lakes or waterways.
- Driving history. The insurance company will take into account your driving record for boats, as well as other vehicles, when figuring out the cost of boat insurance.
What boat insurance won’t cover
Just like home and car insurance, boat insurance rates don’t cover everything. Here are some examples of things that are usually excluded under a boat insurance policy.
- Normal wear and tear
- Infestations of bugs, mussels, or other critters
- Accidents outside of your lay-up period
- Accidents of improper storage or transportation
- Underage operators
- Marine animal damages
- Damages incurred outside of your navigational limits, if applicable
Boat insurance discounts
There are many ways to reduce boat insurance costs. You may be able to reduce the cost of boat insurance through a variety of discounts that may apply to your circumstances.
- Bundle with your home and auto insurance for cheaper boat insurance rates
- Take boating safety courses for an added discount
- Choose a higher deductible for lower monthly premiums
- Safe driver discounts
- Paying your annual premium upfront can net a small discount
- Having multiple boats may also score you a rate reduction
Why is boat insurance so expensive?
Boat insurance isn’t always so expensive, but if it is, there’s probably a good reason. If, for example, you live in a warm-weather state like Florida, your insurance will likely be higher because you can use your boat year-round and primarily on the ocean.
You are also going to see higher insurance costs when you engage in riskier activities such as deep-sea fishing, towing water skiers, or zooming around on a powerboat or personal watercraft.
Can you insure an old boat?
You can insure pretty much any old boat unless it’s a rusted-out death trap. However, you may want to incorporate as many safety measures as possible to reduce your rates.
If you have a classic or antique watercraft, though, you may want to go through an insurance company that specializes in insuring older, valuable boats. Depending on when the boat was built, you may have to get vintage or antique boat insurance.
How old does a boat have to be to be an antique?
A boat built up until 1918 is considered historic. It’s an antique if made between 1919 and 1942, and a classic if built between 1943 and 1975. “Late classic” is any boat made after 1975 up to 25 years before the current year, in which case it’s considered “contemporary.”
What is the marine insurance policy?
Marine insurance policies describe the type of insurance used for cargo vessels and ships used to transport raw materials and commercial goods, either domestically or internationally. The term originated with seagoing vessels but also applies to the transportation of goods by air or land. It’s considered a key source of protection for companies that buy and sell goods and may experience loss of or damaged shipments, or even cargo theft.
- Boat insurance costs range vastly depending on the boat’s size, speed, value, and other factors.
- Where you live, the type of water you boat on, and how long your boating season is also affect your insurance rates.
- Most states don’t require insurance, but it’s a wise decision to at least carry a liability insurance boat policy.
- Be aware of exactly what boat insurance doesn’t cover, such as underage drivers and marine animal damage.
- Homeowners’ policies only cover small watercraft such as kayaks, canoes, and boats with small motors.
View Article Sources
- 2020 Recreational Boating Statistics — U.S. Department of Homeland Security
- Boats & Watercraft — Department of Administrative and Financial Services, State of Maine
- Ultimate Guide to Boat Loans — SuperMoney
- Which States Require Boat Insurance? Here’s What You Need to Know — SuperMoney
- Boaters Insurance: Reviews & Comparisons — SuperMoney