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How to shop for boaters insurance
If you navigate across lakes, rivers, or ocean waters of the United States, you probably need boaters insurance. Whether you're looking for a new boat insurance policy or just to save money on an existing policy, SuperMoney's free boat insurance comparison tools can help you find the best quotes available.
Recreational boating is a popular activity enjoyed by approximately 87 million U.S. adults. Whether heading out on the water to travel, fish, water ski, or just enjoy the outdoors, it’s a great way to spend time with friends and family.
However, all that fun comes with a few risks. The U.S. Coast Guard reported 5,265 boating accidents in 2020, which caused around $62.5 million in property damage. Beyond that, the accidents involved 767 deaths and 3,191 injuries.
It’s in situations like these that boaters insurance comes in handy. The problem is, according to Allstate agent Brent Jablonski, 40% of boaters do not have boat insurance.
So, if you are in an accident and the other boater is at fault, there’s a 40% chance that other boater will not be insured. This could lead to some serious expenses. It’s only prudent to protect yourself with the right boat insurance policy.
But which boat insurance is best? Many people don’t understand how boat insurance works or how to compare rates and terms. This guide explains the key factors you should consider when comparing policies. It also goes over several frequently asked questions and gives you free access to reviews of boat insurance companies.
The first question to answer, of course, is this:
When does a boat owner need boat insurance?
Michael Barry, Head of Media and Public Affairs at the Insurance Information Institute (III) says, “In most instances, a boat owner is going to need boat insurance.
Homeowners insurance and renters insurance policies may offer some limited boat coverage, but those policies are generally not underwritten on the assumption that the homeowner or renter also owns a boat.”
So, what is typically covered under a homeowners or renters insurance policy? Barry says, “Small boats (e.g., canoes, powerboats) may be covered under either a standard homeowners policy or renters insurance policy. The size, type, and value of the boat will determine when a small boat owner needs more coverage, and that decision should be made after talking with an insurance professional.”
He adds, “In addition, when it comes to boating-related claims, boat insurance policies generally provide broader liability protection than a homeowners or renters insurance policy.”
So, if you have a canoe or a small boat with a small engine, the benefits of dedicated boat insurance may not outweigh the costs. However, owners of yachts, large sailboats, jet boats, jet skis, and other watercraft that go over 20 to 30 mph will typically see the benefits of coverage.
How to find the best homeowners insurance coverage.
How does boat insurance work?
Boat insurance helps to protect your boat or personal watercraft (PWC), the people who ride on your boat, and others around you. You’ll pay an annual premium split into monthly payments. The premium is based on several factors. These include the coverage you need, your boat, your usage, your driving record, and so on.
If you need to file a claim, you only pay the deductible, and the company pays the rest up to your limits. This enables you to handle the ramifications of accidents without breaking the bank.
Let’s take a closer look at how boat insurance policies work.
Insurance companies often have limits on the costs and types of boats they will insure, so remember to check for restrictions.
Commonly eligible watercraft include sailboats, bass boats, other fishing boats, ski boats, jet boats, bowriders, center consoles, houseboats, jet skis, sport boats, yachts, kayaks, and canoes.
Boat insurance policies define the specific situations that will be covered. In most cases, they cover damage that results from fires, storms, sinking, theft, capsizing, explosions, stranding, and collisions.
This is good news. How so? The five most common types of accidents in the most recent report from the U.S. Coast Guard were:
- Collision with another recreational vehicle.
- Collision with a fixed object.
- Falls overboard.
So, boat insurance typically covers the most common hazards. Still, it doesn’t cover everything. Things it doesn’t usually cover include normal wear and tear, damage from defective machinery, and damage from mold. Typical policies also don’t cover damage caused by insects, sharks, mold, zebra mussels, and other creatures.
Standard boat insurance coverage includes the following in the event of a covered peril:
- Medical payments coverage: Covers medical bills if you or others are injured while operating or occupying your boat.
- Property and bodily injury liability: Covers the costs if you cause someone else to get hurt or damage someone’s property.
- Guest passenger liability coverage: Covers legal expenses incurred by someone using the boat with the owner’s permission.
- Collision and comprehensive coverage: Covers your property if it is damaged by an accident or covered peril. Includes physical loss or damage to the boat. Also covers loss due to theft.
For those who need coverage above and beyond a standard policy, the availability of optional coverage types will be important. Many top boat insurance companies offer such coverage. Examples include:
- Wreck removal: Covers the cost to remove your boat if it is wrecked.
- Temporary repairs: Covers reasonable repairs to protect covered property from further loss.
- Newly acquired watercraft: Covers brand new boats against covered losses.
- Emergency service: Covers any emergency services that are required if your boat becomes disabled. Includes on-water towing and labor.
- Uninsured/underinsured watercraft coverage: Covers if someone without insurance causes damage to you or your boat.
- Fuel spill liability: Covers the cost of cleaning up a fuel spill.
- Supplementary services: Extras that make life easier when you need to file a claim, such as 24/7 phone support.
- Boat rental liability: Covers you when driving a rental boat on a short-term basis.
- Boat rental reimbursement and liability: Covers the cost to rent a boat when your boat is being repaired due to a covered loss and also provides you with proper liability insurance when operating the rental.
- Fishing tournament reimbursement: Covers the cost of entry for a fishing tournament if you paid but can’t compete due to a covered loss.
- Special fishing equipment: Covers your specialized equipment.
- Programs to reduce your deductible: A program that helps to reduce your deductible over time.
- Ice/freeze coverage: Covers if your boat is damaged due to freezing.
These will vary by company, so if you are concerned about a specific situation that isn’t very common, you will need to look for special endorsements.
Coverage limits and deductibles
Each coverage type within an insurance plan will have coverage limits. These are the maximum amount a policy will pay out on an approved claim.
Before your insurance pays, you typically have to pay a deductible. Your insurer should provide you with coverage limit and deductible options when choosing your plan.
Note that you’ll need coverage limits high enough to cover the type of boat you own properly. For example, a speedboat should have more coverage than a cruising boat.
Each insurance company typically has a list of perils it will cover. For example, State Farm covers sinking, explosions, stranding, collision, capsizing, storms, theft, and fire.
If damage to your boat occurs from a peril that is not included in your policy, the losses won’t be covered.
As already noted, the most common types of accidents (collisions, flooding/swamping, etc.) are covered by typical boat insurance policies. Still, it’s a good idea to verify this coverage when considering a policy.
When examining policies, be sure to look into the following:
Many insurers will have restrictions on the types of boats they will cover. For example, State Farm insures kayaks, canoes, houseboats, jet skis, sailboats, bass boats, yachts, and sport boats.
Speak with the insurers you are interested in to confirm that they will cover your type of boat
Replacement cost vs. actual cash value
When it comes to insurance companies paying for claims, a provider may offer the replacement cost or the actual cash value.
Here’s what you should know about each:
- Actual cash value: The insurance company pays you the depreciated value of your property at the time of loss.
- Replacement cost: The insurance company pays you the cost required to replace your property. This can include two payments — the first for the actual cash value of your property and the second for the difference between the actual cash value and the true replacement cost.
The replacement cost route provides you with more coverage. With it, you get the full cost of your property replacement covered. Actual cash value may leave you with less than you need to replace or repair all of your property.
Many companies will offer you discounts on your boat insurance, such as:
- Multi-policy discounts: Save by combining boat insurance with another policy like homeowners insurance.
- Homeownership discount: Save by simply being a homeowner.
- Autopay: Get a discount for setting up automatic payments from your bank account.
- Upfront payment: Save when you pay your entire premium up front.
- Boat safety certified: Save by completing a boat safety course.
- No claims: After a period of no claims you may get a discount on your premium.
- Diesel-powered: Save by having a boat that uses diesel fuel.
Be sure to look around to find the company that can offer the lowest premium with discounts factored in.
Those are the basics of boat insurance policies and how they work.
What makes a good boat insurance company?
A good boaters insurance company will:
- Offer all of the standard coverage options listed above.
- Cover many causes of damage.
- Offer a variety of discounts.
- Have the optional coverage types you need.
- Offer competitive premiums, coverage limits, and deductibles.
Additionally, consider the following factors:
When comparing companies, you may also want to look at their online accessibility. Do they have an up-to-date website and mobile app? Can you get a quote online? Apply online? Get answers to your questions online? Make claims online?
All of these help to make for a more convenient experience.
Further, how does the company rate with past customers? A company can say a lot of great things about itself, but a large sampling of past customers will reveal the truth.
It’s better to find out in advance about problems like frequently denied claims or unhelpful customer service representatives.
It’s also important to analyze the financial strength of a company to determine how reliable they are and if they will be able to cover your claim. There are several rating agencies, each with its own scoring system. SuperMoney’s financial strength rating combines the rating from leading risk assessment agencies to help you get an overall idea of a company’s financial reliability.
Lastly, look at other feature and benefits. Some companies go above and beyond to stand out among their competitors, so be sure to check what extra perks you can get from each company you consider.
Frequently asked questions about boat insurance
To wrap up, let’s review some of the questions people most often ask about boat insurance.
Are you required to have insurance on a boat?
A few states require boat insurance. Only Utah and Arkansas have minimum requirements.
Utah requires bodily injury/death with limits of $25,000/$50,000 and property damage insurance. There is a limit of $15,000 if boats are powered by engines over 50 horsepower.
Arkansas requires liability coverage with a limit of at least $50,000 for boats with engines that have over 50 horsepower.
However, if you get a secured loan on a boat, the financing company may require that it be fully insured. Further, some harbors, facilities, and marinas require insurance if you dock your boat in them.
What happens if you are involved in a boating accident?
If you are involved in an accident while on your boat, the way your losses are covered will depend on the incident.
- If your accident doesn’t involve any other people or property, your insurance plan will cover eligible losses up to your plan limits.
- When someone else causes the accident, that person’s liability insurance will cover your losses up to the policy’s limit.
- If you cause an accident with someone else, your policy will cover your losses and the losses of the other person up to your limits.
- When another person causes the accident and does not have insurance, you will need uninsured/underinsured coverage to cover your eligible losses.
The best way to ensure you have coverage is to have liability and uninsured/underinsured coverage, as well as your own insurance for property and medical damage.
How much does boat insurance cost per year?
It can vary. Typically boat insurance starts at $100 per year. The average boat insurance price is about 1.5% of the value of your boat per year. So, if your boat is $30,000, you’ll pay around $450 per year.
However, many factors influence the cost of boat insurance. These include:
- Your driving record
- How you use your boat
- The age of the boat
- Safety courses
- The horsepower of your boat
- Your gender and age
- The region you live in
- Your credit score
The best way to get an accurate idea of how much boat insurance will cost for your situation is to ask for a few quotes from trusted providers.
Also, be sure to look out for the discounts available. Most insurers provide savings for being claim free, insuring multiple watercraft, passing a safety course, and more.
What are the benefits of comparing boat insurance companies?
Using an insurance comparison tool allows you to find out how past customers have rated the insurer, the company’s financial strength, and additional details about the coverage on offer. Shortlist your top picks and get quotes from those companies.
Be sure to compare coverage types, perils, deductibles, limits, exclusions, and customer reviews in addition to the premium cost. With that information, you will be able to find the best deal to insure your boat. Then, you can hit the water without worries.
Where can you get boat insurance?
Many of the nation’s top insurance companies, such as State Farm, USAA, Allstate, Progressive, Nationwide, and more offer boat insurance.
How do you decide which is best for you? Use SupeMoney’s boat insurance comparison tools below to see the pros and cons of each company side by side.
Does my homeowners insurance cover my boat?
According to the Insurance Information Institute, homeowners insurance policies sometimes offer property damage coverage for small boats with less than 25 horsepower.
However, limits are low, commonly in the ballpark of $1,000 or 10% of your home’s value. Larger boats, faster boats, and personal watercraft typically require a dedicated boaters policy, and most people will want more coverage even for smaller boats.
Does boat insurance cover a blown engine?
Under some circumstances (not wear and tear), a blown engine may be covered. It’s best to check with the insurance company to find out the details.
Does boat insurance cover hurricanes?
Some boat insurance policies do cover hurricane damage, tornadoes, tropical storms, and windstorms, while others do not. Be sure to check with your potential insurers.