You’ll always want to check your specific insurance policy
for details regarding your boat, but in general, here’s what kind of coverage
you can expect.
Boat insurance companies usually break down coverage into
two categories: physical damage and liability.
The damage portion of your policy covers loss from things
like the boat sinking, catching on fire, being stolen, or hitting something.
You’ll want to clarify what portions of the boat are covered, which usually
include the hull and exterior, the motor if applicable, anchors, safety
equipment, and additional fuel that’s on board.
Your boat insurance company should also have a liability
coverage amount which protects you in the event your boat causes damage to
other property or people. Common occurrences include colliding with other boats
or structures such as docks. You can also be covered for other circumstances
caused by your boat, including substantial wakes that consequently cause
damage. Your liability coverage should
protect you from lawsuits as well, so make sure that’s included as part of your
Check to see what locations are included as part of your
boat insurance. For instance, if your vessel is on the road attached to your
truck, then it’s most likely covered by your auto insurance policy. However,
there’s likely a value limit placed on the boat under this policy, which may
not cover the total cost of your boat.
Ask questions of all of your insurance providers to make
sure you know what’s covered and where. A broader umbrella policy can help you
protect your boat (and yourself from liability) from every point in which your
boat travels. This eliminates unpleasant surprises when you don’t fully
understand your various policies.
Agreed Value vs. Market Value
When reviewing boat policy options, an insurance company
may let you choose one of two ways to assign value to your boat. The first is
called an agreed value.
The agreed value is an amount you and the insurer agree
on together, which consists of the total amount you’ll be reimbursed in case
something happens to your boat. The downside is that you’ll likely pay a much
higher premium on this kind of insurance policy because you’re not taking into
account the ongoing depreciation of the boat.
Consequently, selecting agreed value is best suited if
you’ve purchased a new boat. That way, you’re not penalized for the steep
depreciation that occurs right after taking the boat off the lot, especially if
you’re paying a loan for the full purchase price.
Choosing market value for your boat insurance policy
factors in that depreciation, so you would just be compensated for the current
value of the boat, not for replacing it with a new boat. If your boat is 10
years old and is destroyed in some way, you’ll only receive enough money to
replace it with a boat of a similar age. If you want to upgrade to a newer,
more reliable boat, you’ll need to find another way to finance the difference.
Of course, you get what you pay for, so you’ll receive a
much lower premium on your policy by choosing the market value option.
At the end of the day, you need to choose based on what
you owe on the boat and how you’d like to replace it if you end up losing it to
some external cause.
How to Save Money on Your Policy
As you can see from some of our top picks for boat insurance
companies, there are plenty of ways to receive a discount on your policy each
year. No matter which insurer you choose, check out these most common
opportunities to save so you can lower your insurance costs without sacrificing
the quality of your coverage.
#1: Choose a Policy to Match Your Boat
Read the fine print of your insurance policy and make sure
it matched what you need. Most insurers let you get ultra-specific with the
type of boat you own so you can get the perfect amount of coverage without
overpaying for a plan with excessive coverage.
#2: Take a Safety Course
Many boat insurance companies offer a discount on your
policy if you take an approved safety course. This shows them that you have the
experience to better care for your boat, making it less likely that you’ll even
need your policy. While you can’t control everything that happens, you can
certainly control how you respond.
#3: Add Safety Features
Your insurance company may offer savings on your policy if
you install additional safety features, like a depth finder or auto tethers.
While they do involve a one-time cost, you could save money year after year on
your boat insurance.
#4: Be Realistic with Your Lay-up Period
If you just use your boat seasonally, take an honest look at
how much time you’re not actually on the water. You can reduce your insurance
premium if you use your boat less frequently. Obviously, the point of having a
boat is to enjoy it. But if you realistically don’t take your boat out until
Memorial Day weekend, don’t end your lay-up period at Easter weekend unless you
really intend on taking it out that early in the year.
You certainly want to pay for the right amount of insurance
coverage to protect your boat. But taking the time to make sure your plan is as
accurate as possible can result in major savings every year.
Frequently Asked Questions
Does homeowners insurance cover your boat?
Your homeowners insurance may cover damage or theft to your boat when it’s on your property. However, the value limit is likely much lower than what your boat is worth so check to see the amount covered and under what circumstances.
Is boat insurance required?
A few states require you to insure your boat, even if you own it outright. Most, however, do not so check your state laws to see what’s applicable to you. If you financed your boat, your lender will most likely require you to have insurance, as will a port or marina you choose to dock at.
Can you bundle your insurance policy?
Bundling multiple insurance policies under one carrier can save you hundreds of dollars over the course of each year. Just carefully read how the claims process works to make sure you’re happy with the company that’s insuring you for multiple items, like your home, car, and boat.
Is theft covered?
If you get comprehensive coverage, then theft is most likely covered under your policy. However, this only included the boat itself, not any of your personal possessions on the boat. Your insurer may let you add on a rider policy to protect those items as well.
Cover Your Boat Today
Make sure your boat is protected wherever you go by getting an insurance quote today!