There’s no doubt that owning a boat comes with a lot of fun trips and allows users to build great memories out on the water.
However, it also can easily bring a fair amount of risk and work on board. For this particular reason, it is essential for you as a boat owner to make sure that you have boat insurance.
In the event of any sort of damage or loss to your boat, boat insurance helps save the day.
While most water vessels with motors including leisure yachts and crafts, pontoon boats, fishing boats and paddle boats are covered by boat insurance, kayaks, personal watercrafts or canoes usually aren’t.
It might be possible to find some limited coverage for small watercrafts under your homeowner’s policy. Buying separate coverage or adding a special endorsement might also be some possibilities.
Contacting an expert independent agent is highly recommended in order to receive assistance with the insurance coverage of your boat.
Many believe that insurance coverage policies remain the same from company to company. While this might be true for many insurance types, it’s not necessarily true for yacht and boat insurance.
When it comes to insurance of marine crafts, insurers offer a wide range of coverage according to the level of expertise of the company, type of clients they want to attract and their risk appetite.
Due to varying insurance policies of vehicles, we have prepared this extensive guide to help you learn everything you should know about boat insurance. So, let’s get started!
Contents
How Much Is Boat Insurance Monthly?
The length of a boat, its expected usage and its type largely dictates its insurance rates.
Whether you own a small fishing boat, a yacht or a speed boat will make a big difference in the amount of money you’ll be required to pay.
When it comes to calculating average cost of boat insurance, as a rule of thumb, boat owners are expected to pay 1.5% of the total value of their boat in annual rates.
If you own a boat that is worth around 20,000 dollars, you can expect to pay about 300 dollars per year to have your boat fully insured.
However, if you own a motorboat costing 100,000 dollars, it might cost you around 1,500 dollars to insure it. Multi-million dollar yachts, on the other hand may cost around 30,000 dollars to be insured.
These numbers are just approximate figures and may depend on many factors other factors, some of which are discussed below:
Factors That Affect Boat Insurance Costs
Multiple factors including some that aren’t in your control, can have a noticeable impact on the insurance rates of your boat.
For instance, if you sail on a lake with high claim rates, the overall cost of your insurance coverage might be higher than in a lake with fewer claims. Other factors that might affect your boat insurance rates are:
Specifications of Your boat
Model, make and year of the boat and its motor as well as whether you have an outboard or inboard motor are factors that come into play when determining insurance rates.
Region of the Country
Your location plays an essential role in this process as it helps determine whether you will be using your boat in places with abundance of natural hazards such as earthquakes and hurricane.
Your Use of the Boat
If you tow parasails, wake boarders or water skiers, your rates will typically be higher than if you only use your boat for occasional fishing adventures.
Your Credit Score
While this may come as a surprise to you, insurance providers believe that boat owners with a higher credit score are statistically less prone to boating incidents.
If you have a high credit score, you may be charged less for insurance of your boat than someone with a lower credit rating.
Your Driving Record
Individuals who are good automobile drivers are typically good boat drivers as well.
Horsepower of Your Boat
Most of the time, higher insurance premiums are assigned to boats that have a higher horsepower engine.
Safety Measures
Whether you have Coast Guard approved radios and fire extinguishers to maintain communication with the mainland, and taken a certified safety course or not are also important factors.
Boating Experience of Other Boat Drivers
Adding other family members as your boat drivers can escalate your insurance rates.
Your Previous Boat Insurance Claims
People who have filed multiple claims in their past might have to pay more to have their boat insured.
Do I Need Boaters Insurance?
Are you one of those boat owners who frequently wonder why do they need boat insurance, especially when the state they reside in does not require it?
If you are, the straightforward answer to your query is for financial security. In case of an accident, if you have proper insurance and your boat is covered, you will only have to pay the deductible and your insurance provider will cover the rest.
However, without insurance, you will most probably be stuck paying the full cost for all the damage and repairs to your boat out of pocket.
This might include legal costs along with the medical bills of someone else harmed during the incident.
Sometimes boats are partially covered under homeowner’s policy but having a separate boat insurance policy ensures specialized and greater protection.
Is Boat Insurance Required In Some States?
Yes. Some states require boat owners to have liability coverage for their boat. You can contact your ERIE agent in order to check if boat insurance is mandatory in your state.
Liability coverage does not only offer protection for your boat but it also helps you pay for damages to someone else’s dock, boat or other marine property.
What Is Covered with Boat Insurance?
Collision Damage
If there is some sort of damage caused due to an accident, boat insurance offers collision damage coverage that includes the replacement or repair of the boat in question.
Oftentimes there are several exclusions mentioned in policies that you need to read carefully before signing up with a company.
For instance, wreckage clean-up isn’t included in a standard insurance policy unless you pay for additional coverage.
Moreover, if your engine blows due to a manufacturer’s defect or collision, it is most likely to be covered by boat insurance. However, if it simply blows due to normal wear and tear, it wouldn’t be covered under the boat insurance policy.
Bodily Injury Liability
When it comes to the usage of watercrafts such as boats, there is always a possibility of one or more people being injured.
These people may include passengers on your boat or people on another boat involved in an accident with your boat. The liability coverage would cover lost wages, hospital bills and various other legal expenses.
Property Damage Liability
In case you lose control over your boat out on the water or face some other sort of problem, you might cause damage to someone else’s boat, a dock at the marina or some other piece of property nearby.
With property damage liability, you won’t have to pay any money for the repairs out of your pocket.
Comprehensive Coverage
This coverage is for accidents that don’t involve any kind of collisions. For instance, your boat is damaged in an accident, vandalized, or stolen then comprehensive coverage covers the costs.
When it comes to boat theft, insurance policies may vary from company to company. It’s best to review the policy to see what’s included and what isn’t before signing up for it.
Additional Coverage Options
Following are some types of add-on coverage that can be included on a boat insurance policy:
- Uninsured coverage
- Damage to a dry dock
- Oil spills
- Medical payments
- Fishing equipment
- Personal property protection
- Roadside assistance
It is crucial to protect yourself against problematic situations you might come across. If another boat damages your boat or you sustain injuries from them, you need to have coverage to protect yourself in case the other boat is uninsured.
It is essential to read a policy thoroughly and determine when you require added protection. Every insurance carrier and policy varies different.
Inquire your insurance agent about all available coverage options for your boat so that you can plan for any upcoming expenditure accordingly.
Will My Boat Insurance Cover a Blown Engine?
This shouldn’t come as a surprise to you that an engine is required for boat operation. Some sailboats might even have auxiliary engines that have to be turned on every now and then.
Therefore, engine failure comes as a huge dismay for a boat owner. Engine failures don’t even put a halt to adventurous trips but they are also quite costly.
Even basic outboard boat motor failures can cost you thousands of dollars.
Now as the engine is such a vital component of a water vessel, in case it sustains some sort of damage, it seems reasonable to think that your boat insurance will cover all repairs.
However, that is far from the truth. Whether or not your boat insurance will cover damages to the engine depends on the source of the damage as well as the related costs.
Boat insurance was designed to help individuals afford and pay costs related to unavoidable and unpreventable damage to the watercraft.
Therefore, one of the key factors in determining whether your insurance policy will cover a damaged or blown engine is whether that damage was unavoidable or not.
In simple words, if your engine failed due to your negligence and lack of care, your policy won’t cover it. Engines require regular maintenance and service.
Therefore, if you don’t fulfill your due diligence and your insurer figures out the actual cause of the damage, they can outright refuse to pay for your boat repairs.
Policies May Not Cover Certain Damage
There’s a possibility of your engine failing because of some sort of damaging event that you had no control over.
For instance, your engine might sustain damage in a collision, sinking or any other unfortunate event that you couldn’t have avoided or escaped.
In such cases, your boat insurance policy may apply and help cover the costs. However, for you to receive the payments your policy needs to contain physical damage insurance.
This coverage will help you pay the costs when the parts of your boat or the boat itself need replacement or repairs.
Two main components of physical damage coverage are comprehensive and collision damage insurance.
Comprehensive coverage pays for any sort of damage that isn’t caused due to wrecks such as theft of the boat, storm damage or fire damage. Collision damage on the other hand, pays for damages that follow boat wreckage.
When your boat insurance is being structured, make sure you ask your insurance agent how much compensation you will receive through the policy for damaged boat equipment.
In some cases, your policy may offer a depreciated cash value settlement. This settlement will reflect the value of your boat engine before the accident.
In other cases, your policy might provide you with full replacement cost of the damage caused to your engine.
Does Homeowners Insurance Cover a Boat?
While a separate boat insurance policy is specially designed to offer high limits and numerous types of coverage, your homeowners policy might also take care of a few expenses for you.
When it comes to physical damage, a few carriers limit the coverage you can receive via a homeowners policy. This limitation depends on the horsepower or size of your boat.
That’s why signing up for boat insurance is a smart decision and investment as it provides better protection for your boat.
As for liability coverage under homeowners policy, it varies with insurance carriers. With some policies you can add a limited amount of liability coverage if you own a low-horsepower or smaller vessel.
Other times, homeowners policies don’t offer liability coverage at all. With boat insurance policies, you can have various types of coverage added to the structure as per your personal preference.
How Does Boat Insurance Work?
When you buy insurance coverage for your boat, you need to decide the types of coverage you require, the deductible amount (maximum out of pocket expense per claim) and the amount of coverage you want for your boat.
In the event that you experience a theft, have an accident or go through some other sort of loss that is covered under your insurance policy, all you need to do to receive a payment covering the loss is file a claim.
For instance, you get into an accident with another boat. Now, this accident causes serious damage to your water vessel.
Depending upon the laws in your state, and the boat insurance coverage you and the owner of the other boat have, one of the following scenarios is likely to occur:
- If the other boat involved in the accident was at fault, their coverage would pay for your damages, up to the limit of their insurance policy.
- If you were at fault, you would pay for the damage through your boat liability insurance, up to the limit of your boat insurance policy.
- If the other boater involved in the accident was at fault but they didn’t have enough to cover your costs or didn’t have boat insurance at all, underinsured / uninsured boaters coverage would pay for the damages. However, in order for this to happen, you need to have that particular coverage in place.
Which Comes First: Boat Insurance or the Boat?
If you are actively looking for a boat to buy, it might be a good idea to consider purchasing insurance first before you sign the purchase paperwork for your boat.
Insurance rates vary all the time; therefore, it’s best to factor in the overall cost of your coverage while you determine the type of boat you can afford.
Narrow down your purchase choices to 2 – 3 boats, collect all relevant information about them including specifications, features, etc. and finally take that information to a local agent in order to make the best possible decision.
Your agent will help you get quotes from multiple insurance companies for the boat you want to purchase.
Once you gather all the necessary information, you can easily determine which boat will ultimately suit your budget and your needs.
Now that you have learned everything about boat insurance, search for a policy today that can help protect your money and your valuable boat in the time of need!
