How Much Does Boat Insurance Cost and What Does it Cover?

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Insuring the valuable purchases we make or possessions we acquire is always a good idea, and boats definitely fall into the category of valuable possessions. Just as you may be worried about your car being damaged by a new driver, in an encounter with another car or by Mother Nature, boat owners are right to have similar concerns. And just as car owners protect their assets with insurance, so can folks who own boats. 

 Boat insurance is a highly customizable type of insurance that can cover a wide variety of marine vehicles, from yachts and sailboats to personal water crafts. The type of marine vehicle you have, where you use it, how often you use it, and what you use it for makes a big difference in boat insurance costs. 

There are plenty of factors to consider when choosing a boat insurance policy. How much is boat insurance likely to cost for you?

How Much Does Boat Insurance Cost?

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How much is boat insurance? To put it simply, that depends. We found annual policies starting as low as $245/year, but many important variables factor into the cost of boat insurance. For instance, the horsepower your boat has, what kinds of waters you plan to take it in, and the exact nature of your use for the boat will all affect your insurance costs.

Location is one of the most significant factors in boat insurance costs. Your policy is based on the area you plan to operate your boat in. If you plan to sail in a state with little access to water and a short season where the waters aren’t icy, boat insurance will be cheaper for you. On the other hand, if you live in a state where you can hop in the boat year-round and you’re surrounded by coastlines, your premium will be higher. 

Other basic considerations can impact the cost of your boat insurance. Like car insurance, you can choose your liability coverage maximum and the deductible amount. Higher deductibles and lower liability coverage maximums make your insurance premiums cheaper, but these can also leave you paying more out of pocket if you need to file a claim. 

Boat insurance providers also give price breaks to customers with safe boating certifications, which helps to have a long history of legally operating a boat without significant accidents. If you do not have a marine driving record, an insurance company may also consider the good driving record you’ve earned on land. 

Types of Boat Insurance Coverage

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The major difference in types of boat insurance compared to car insurance has to do with how the insurance company calculates the cost of the boat if it is destroyed. With cars, insurance companies almost always pay based on the current, depreciated value of the vehicle. Boats are different. They are significant investments that require expensive upkeep. That’s why boat insurance companies often offer two options: the agreed value of the boat or the actual cash value

Suppose your insured boat is wrecked in some marine accident. With an agreed value policy, you’ll know exactly how much your insurance company will compensate you for the loss of your boat. At the beginning of the policy, a value for the boat is agreed upon, based on the worth and condition of the boat at the time the insurance policy begins. With an actual cash value policy, the insurance company would pay you based on the boat’s current market value (or actual cash value). 

While it would be nice to choose which one you want after an accident has already happened, there are agreed value policies and actual cash value policies. You have to choose one or the other up front. Since actual cash value policies usually cost the insurer less, these policies often have much cheaper premiums than agreed value policies. 

What Does Boat Insurance Cover?

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The exact areas of risk covered by any single boat insurance policy depend on the selections you make as the policyholder. Riders, or additional areas of coverage that you add onto an insurance policy, are very common in the world of marine insurance since boat owners operate their marine vehicles for such a wide variety of uses. The two primary types of coverage with boat insurance are liability and physical damage. 

Liability Coverage

Liability coverage protects other people, boats, and property owners. If the operation of your boat hurts someone else or damages their property, the liability coverage within your boat insurance policy can help to compensate them.

Basic liability coverage is often not enough to cover medical costs if someone is seriously injured by your boat. Many boaters opt for additional medical payment coverage to protect them if they incur these very expensive costs. It is also common to add uninsured watercraft coverage to protect you if another boater who does not have insurance seriously damages your boat. Remember that your insurance coverage protects others from your actions. If you need protection from someone else, you’re usually reliant upon their insurance. Uninsured watercraft coverage helps you bridge the gap if another person does not have insurance coverage. 

Physical Damage Coverage

Physical damage coverage pays you to fix or replace your boat when it is seriously damaged. The causes of damage that are covered vary greatly from policy to policy. Some policies only cover physical damage resulting from some kind of marine accident, such as another boat crashing into yours. Other policies cover all damage to your boat, even if it is caused by something non-crash-related, like a storm. In general, your premium costs increase when you have a wider range of physical damage coverage

It is very important to understand what types of damage are excluded by your policy. For example, many policies do not cover physical damage that happens because of marine animals. Severe damage to the boat from things like mold, bugs, wear and tear, and factory issues are often excluded from physical damage coverage.

Regardless of the variables in price, boat insurance is an almost nominal cost to protect such an expensive vehicle. Especially considering that marine accidents have a high potential to be lethal, the liability coverage offered by boat insurance can shield boat owners from a high degree of risk. If you want a boat insurance quote, find an insurance company that offers marine insurance.