What Is Boat Insurance?

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If you own a boat, you’ve likely heard that boat insurance is available. However, you might not understand entirely what it is or how it works. Here’s a look at boat insurance, including a basic definition, what it usually covers, and why it’s essential.

Basic Definition of Boat Insurance

Boat insurance is a form of financial protection for boat owners that is essentially the watercraft equivalent to car insurance. In the simplest sense, boat insurance serves as a mechanism for handling costs associated with certain types of damage or theft, preventing boat owners from having to pay out of pocket for some of the costs related to these covered events.

With boat insurance, you pay premiums annually, biannually, or monthly. Those funds keep your policy active and compensate the insurer for offering coverage to you. Additionally, you’ll have a deductible, which is an out-of-pocket amount you agree to pay before the insurance kicks in for a qualifying incident.

In most cases, boat insurance addresses damage or harm from two angles. First, it can help repair your vessel if it’s damaged during a covered incident. Second, it can provide compensation to other parties who are injured – either physically or financially – due to an eligible incident that you caused.

What Does Boat Insurance Usually Cover?

Boat insurance covers damage and financial liability relating to qualifying incidents. Exactly what’s considered a qualifying event varies by policy. However, most policies address damage pertaining to accidents. This includes assisting with repairs if you’re not at fault and the at-fault operator isn’t insured, or covering your liability even if you are at fault. Whether or not repairs for your vessel are covered if you’re at fault depends on whether your policy supports it.

In most cases, boat insurance also covers losses resulting from theft, giving you recourse if your boat or certain equipment or personal effects on it are stolen. Additionally, it typically covers damage caused by incidents like fires or lightning strikes. Many policies also include medical payment coverage, though some treat that as an add-on.

Many boat insurance policies offer some level of coverage for your vessel whether it’s on land or in the water. As a result, if your boat is damaged when it’s dry-docked or being hauled down the road, you have protections.

However, it’s critical to reiterate that coverage varies from one insurer and policy to the next. As a result, you need to review your policy carefully to learn about covered incidents, restrictions, limits, and other details.

Why Do You Need Boat Insurance?

In 2021, there were 4,439 boating accidents in the United States, causing approximately $67.5 million in property damage. Often, the cost of repairing or replacing a boat after it’s damaged is hard for owners to shoulder. By having coverage, you reduce your out-of-pocket expenses, as you can tap your policy for financial support during qualifying incidents.

Boat insurance liability coverage also gives you funds to address injury to other parties resulting from accidents you cause. That includes covering medical expenses and lost wages for those you hurt and restoring, repairing, or replacing property owned by others that you damage. Since those expenses add up quickly, your insurance can compensate injured parties appropriately without you having to use your personal assets.

Finally, boat insurance is required in some cases. For instance, both Arkansas and Utah have regulations making boat insurance mandatory. Plus, many marinas require boat insurance for owners storing boats at their locations.