Each year about 141.6 million Americans take to the water on a boat. Unfortunately, many of these people will encounter an accident or a broken-down boat. This is when having insurance comes in handy.
The potential cost of damages from an accident will have many boat owners asking, how much is boat insurance? Unlike car insurance, you’ll need to consider many different policy types and coverage details.
This boat insurance guide will help you know what to expect when shopping for boat insurance so you can purchase the best policy for your needs.
Is Boat Insurance Required?
You do not have to have insurance on a boat to be able to register it in Massachusetts. It is entirely your choice whether or not you purchase insurance for your boat. However, it’s highly advisable that you do. Many marinas and docking facilities will require that you have at least liability insurance to be able to use their facilities.
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Without boat insurance coverage, you’re personally liable for any damage you cause or accident that happens. This includes the cost to repair your boat, any other boat involved, anyone else’s damaged property and the medical expenses of everyone on all boats.
New Boats
If you purchase a new boat through financing, then your lender may require you to purchase boaters’ insurance. The boat is the collateral for your loan, so should you not be able to pay, the lender can take possession of the boat and recoup their loss.
Because the boat as collateral for the loan, the lender will want to protect it. This means having insurance on the boat so the lender can make a claim through the insurance company should the boat be deemed a total loss.
How Much Is Boat Insurance?
The boat insurance average cost will vary on several factors. This means there’s no one correct answer to what the cost will be. So while it’s frustrating to not be able to answer the question, how much does boat insurance cost, it’s better to speak with an agent than set false expectations.
When quoting your insurance, consider how much you can afford for the deductible. The higher the deductible, the lower the rate. But keep in mind, you want the deductible to be something you can afford, but not price you out of coverage.
If the cost of repair is below your chosen deductible, then the coverage won’t kick in, and you’ll be stuck paying out of pocket.
One thing you will find is that boat insurance is probably more affordable than you think it is.
Boat Insurance Factors
There are several factors that insurance companies consider when determining your boat insurance quote. Be sure to answer the questions accurately when requesting your quote to get the most accurate cost possible.
- Length of the boat
- Value of the boat
- Type of boat
- Age of the boat
- Speed and horsepower
- Cruising area
- Coverage options
- Boating and driving history
Similar to car insurance, the newer, bigger, and more valuable your boat is, the more expensive your coverage will be. Faster and more powerful boats present a greater risk, so they are also more to insure. If you plan to use your boat offshore or to travel, then you may find your rate increase. This is because the risks are higher for this type of use.
Boat Insurance Discounts
Similar to car insurance, there are several discounts that insurance companies offer boat owners. Not all insurance companies offer all of these discounts, so it’s best to ask about them when getting your quote. You may find that you can reduce the cost of your boat insurance even further by qualifying for one or more discounts.
- Multi-policy
- Multi-boat
- Boater safety course
- Diesel fuel
- Paid in full
- Claims-free renewal
If you put your boat into storage for a certain number of months every year, ask your insurance provider about “lay-up” discounts. You’ll purchase insurance for the entire year, but you’ll get a discount for a certain number of months to account for the time your boat is in dry storage.
What Does Boat Insurance Cover?
The answer to what is covered by boat insurance can vary based on the specific policy you purchase. However, most policies have some similar basic coverages.
When comparing policies, you may see the phrase “all-risk” to describe the type of policy it is. These policies tend to offer the best level of protection. However, just because the name says “all” doesn’t mean that it covers all types of loss.
What it means is that any risk that isn’t specifically excluded is covered. Most of these types of policies will exclude normal wear and tear, dents, animal damage, marring, and freezing. Product liability problems are also not covered, such as design defects or manufacturer defects.
Physical Damage
Your boat policy will give you coverage for physical damage and loss. The damage or loss needs to be from a common risk, such as a collision, sinking, fire, storm, or theft. Most policies cover the hull and other permanently attached components, such as the motor, extra fuel tanks, batteries, anchor, and onboard safety equipment.
Liability Coverage
If you or your boat are the cause of another’s injury or damage, this coverage applies. This damage could be from a direct impact with your vessel or a situation that’s caused by your vessel. An example of this would be you creating a large wake.
Look for an insurance policy that provides protection from lawsuits. The best coverage will also include settlement and legal fee coverage.
Other Coverages
You may be able to add additional basic coverage to your policy, such as medical payments for the insured and any passengers on your vessel. This type of coverage will close the gap of the potential damages you may be responsible for should a collision or other accident happen while operating your boat.
Other common “other coverage” are personal effects and uninsured boaters’ liability coverage. The personal effect coverage will protect everything that isn’t permanently attached to your boat. This can come in handy when you have a lot of expensive equipment that isn’t permanently attached to your boat, so it doesn’t qualify under regular coverage.
Since boat insurance isn’t required, there are people who will choose not to purchase it. But that doesn’t mean they are excluded from accidents. Uninsured boater’s insurance will provide you coverage should someone who isn’t insured cause damage to your boat.
Inland Marine Insurance Coverage
Inland marine insurance is coverage that protects businesses when moving products or goods on land. As a private boat owner, you can purchase this insurance to provide you coverage while transporting your boat or temporarily storing it somewhere. This makes it a good option if you winterize your boat and keep it in storage for several months.
This type of insurance closes the gap that your homeowner’s insurance policy may leave.
What Does a Boat Owners Policy Cover?
There are several types of policies, depending on the type of watercraft you want to insure.
- Boat
- Personal watercraft (PWC)
- Yacht
- Sailboat
- Dinghy
- Boat or PWC Rental
- Boat Clubs
- Professional
Most people will need either boat or PWC coverage since 98% of the boats. If your vessel is over 27 feet, you’ll likely need yacht insurance. The coverage tends to be broader and more specialized because the large craft can travel further and are used in more unique situations.
While you don’t have to purchase rental insurance, it’s a smart buy because it’ll protect you in the event damage occurs to you, your passengers, or the boat during your rental.
Boat club policies are meant to cover anyone that is a part of the club and operates one of the boats.
If you’re a professional boater, then you’ll need to have commercial level insurance. These include different coverages and limits. Typically, charters, fishing guides, and pro anglers purchase this type of insurance.
Boat Insurance Policy Add-Ons
In addition to the above coverages, you can add additional coverages to your boat insurance policy. These will give you more comprehensive coverage, but will also increase the overall cost of your insurance policy.
Specialized Coverage
If you have special equipment on your boat that you added as an aftermarket modification, then it may not qualify for coverage under your standard policy. In this case, you’ll want to get a special add-on that specifically covers the additional equipment. This could be a high-end navigation system or specialized prop.
Salvage
If you find that your boat has broken down or damage beyond the point of operation, then you’ll need help getting it pulled from the water. This is referred to as salvage.
Consequential Damages
You can add this coverage to provide you with protection from normal wear and tear on your boat. This covers damage that doesn’t occur because of an accident, but rather from natural aging. It could cover mold, corrosion, or rotting.
Towing
If your boat breaks down while you’re using it, then you’ll need to get a tow. You could try to flag someone down, but that’s assuming there’s another boat in the area. The other option is to hire a towing service, which will cost several hundred dollars an hour.
The other option is to add towing coverage to your insurance policy. Then you can contact your insurance company for towing.
Cruising Extension
If you plan to travel outside of American waters on your boat, then you’ll want to confirm that you have coverage. Most boat insurance policies do not extend coverage beyond American waters. This is when you’ll add a cruising extension to your policy for a temporary trip, typically to either Mexico or the Bahamas.
What Is Watercraft Insurance?
This is special insurance that provides insurance coverage for personal watercraft (PWC). It will typically include all of the same elements as boat insurance. The pricing is a little different, though.
This is because PWC tends to have more power and can travel at higher rates of speed with more agile maneuvers. They also can carry fewer people than a boat.
PWC tends to fall into the recreational vehicle category. These include things like motorcycles, ATVs, and UTVs. They are vehicles that are only used for recreational purposes.
What Does Watercraft Insurance Cover?
You can expect a personal watercraft policy to provide the same coverages as a standard boat policy. The coverage and cost will vary based on similar factors that are used for quoting a boat policy.
Does My Homeowners Insurance Cover My Boat?
Many homeowner’s insurance policies will not cover your boat. If they do, it will seriously limit what about your boat it will cover. Many won’t cover marine specific tasks, limit coverage to small boats of a specific size or horsepower, or only cover inland waterway use.
Typical services not included are salvage recovery, pollution damage, wreck removal, and environmental damage. However, there are always exceptions, so you’ll need to ask specific and careful questions to know what exactly your homeowner’s insurance policy covers.
It’s best to purchase a separate policy to cover you during your boat use.
Purchase Boat Insurance for Your Watercraft Today
As you can see, a boat insurance policy can provide you with comprehensive protection while out on the water. While you aren’t required to purchase boat insurance, having it can provide you with additional coverage that your homeowner’s or liability insurance can’t cover.
If you are wondering, how much is boat insurance, then the best thing you can do is speak with an insurance agent. They can help guide you through different marine insurance providers.
Contact our experienced team of insurance agents today and let us help you find the best boat insurance for your watercraft.
Have a happy a safe boating season!
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