Boat Insurance: An Owner’s Guide

If you’re going to buy a boat, you will likely need insurance. Therefore, it’s recommended that you get a boat insurance quote before you buy the boat so that you have an idea of what this aspect of boat ownership will cost. Even if you already have a boat, or are stepping up to a larger one, it’s wise to answer to the question, “How much is boat insurance?” so that you can properly plan for your expenses.

If you have homeowner and auto insurance policies, it’s a good idea to ask if those companies, agents or brokers also provide marine insurance. You might even be able to get better rates by bundling your coverages.

Equally at home in shallow coastal waters or just offshore in the deep, the Pathfinder 2600 TRS packs a lot of comfort into a capable fishing package. All photos courtesy of Maverick Boat Company.
You can often bundle auto/boat insurance policies. Photo courtesy: Maverick Boat Company.

Cost of Boat Insurance Varies By Location

Where you live plays a role in the cost of boat insurance. In fact, boat insurance quotes often begin with your ZIP code. For example, Florida offers year-round boating, so Florida residents pay some of the highest rates in the nation for marine insurance. There’s also the annual threat of hurricanes that can increase costs. Yikes!

Additionally, where you go boating makes a difference. If the boat goes into the ocean, you can expect to pay more than if you do your boating strictly in freshwater. Corrosion caused by salt is one of the key factors for the surcharge.

If you live in the Northeast, you also can expect to pay a premium for insurance, while boaters in the Great Lakes Region have among the lowest rates in the country because the boating season is short.

Also remember that marine protection can be limited to a specific region. For example, if you live in Illinois and decide to pull your boat to Lake of the Ozarks in Missouri and you have an accident, the claim could be denied because it wasn’t within the policy region. Before you travel, call your insurance company to see if you need a binder.

Getting A Boat Insurance Quote

A lot of companies that offer boat insurance have online portals that will get you a quote – often within just a few minutes. The National Boat Owners Association (NBOA) is one great resource, but of course other major companies such as Progressive, Geico, Allstate, Nationwide, State Farm, Travelers and Farmers all offer ways to get boat insurance quotes without having to talk to a person.

Collect and compare as many quotes online as you like, but also be sure to call an agent you have a relationship with. They might be able to save you some money.

Once you find a rate you are comfortable with, most companies will begin coverage right away or as soon as you pay the first premium. To reiterate, the time to get a boat insurance quote, is before you buy the boat.

Required Boat Insurance Documents

To get a boat insurance quote, you’ll likely need to provide the following information:

  • Mailing address, including ZIP code
  • Birthdate
  • Year, make and model
  • Market value

Depending on where you get your quote, you might need a bit more information, but these are the key questions on online boat insurance quote portals.

Boat Insurance Rate Factors

If you have no prior experience in boating, insurance companies are going to rely heavily on your automobile driving record. Insurance companies will also examine credit records to screen applicants and use credit scores to set rates. According to insurance companies’ research, people with credit problems are more likely to be involved in an accident.

That said, if you can shore up your DMV and credit histories before shopping for boat insurance, it’s probably worth the time it will take you to do so.

How To Get Cheaper Boat Insurance

Insurance experts say that if you can save 10 to 15 percent or more on an annual premium, it may be worth opting for a higher deductible. The standard deductible is 2 percent for most boats, and insurance experts suggest raising it to 3 or 4 percent. Realize, however, that a higher deductible could cost thousands of dollars more if an accident occurs.

A higher deductible is one way to save on premiums, but there are a number of other things you can do to reduce the cost of boat insurance.

Let’s take a look at some of them:

Take a Boating Safety Course

Successfully completing a boating safety course from one of the main providers such as U.S. Power Squadrons, Boat U.S. or state-approved outfits can save you as much as 10 percent on your premiums.

Limit Your Range and Season

Paying to insure your boat all over the country when all you do is take it local lakes is a waste of money. Likewise, so is paying to insure your boat year-round when it spends six months on the trailer in your garage. Ask your agent about limiting range and season.

Omit Full Coverage

This option isn’t available to you if you’re financing your boat, but if you own it outright, you might consider a liability-only policy. It won’t pay for damage to your boat due to theft or damage, but it will protect you financially in the event of an accident. However, don’t scrimp to bare bones coverage. Be sure your policy covers salvage costs. If your boat sinks, say, at the ramp, and you don’t have salvage coverage, you will have to pay someone to retrieve the boat, which might not be worth much afterward.

Insure for the Right Hull Value

As a boat ages, it loses value, but lots of owners never adjust what insurers call the agreed hull value, the amount an insurer pays in a total loss event. If your boat is getting up there in age, say five to 10 years, it might be time to adjust the value. You might also discuss with your agent going with an actual cash value policy—and if often gives a substantial savings, which can help reduce your premiums.

Avoid Filing Lower-Cost Claims

Yes, the whole point of paying for insurance is to be covered in the event of an accident, but experts say paying for damage that is a little more than the cost of the deductible can prevent insurers from raising your premiums. Paying for that $1,500 gelcoat and rubrail repair now might save you more than that over time in the form of increased premiums that might result if you had filed a claim.

Join A Boating Club

Check with your insurer first, but joining a boating safety organizations, such as the U.S. Power Squadrons or the U.S. Coast Guard Auxiliary might be good for a discount on your insurance premiums. You’ll have to weigh whether the savings are greater than the membership costs.

Boat Insurance FAQs

How much is boat insurance per year?

On average, boat insurance costs around 1.5% of the value of the boat per year. So a boat worth $10,000 would be aproximately $150/year to insure.

Is boat insurance required?

It depends on your location – some states require liability coverage on powerboats with engines over a certain specified horsepower. Other states require personal watercraft to be insured. Usually any vessel kept on public or state-run parks or marinas will be required to be covered by some form of boat insurance policy.

Do I need to insure my boat if I pay cash for it?

This also depends on the state in which you live, but for financed vessels, you are almost always required to carry full coverage. Refer to boat insurance requirements by state to learn more about this.

Does boat insurance cover my boat while I’m trailering it?

Typically, most marine insurance policies cover boats that are being trailered within their declared region of use.

Which factors do insurance companies consider when determining my premiums?

This differs a little bit with each insurer, but not by much. Insurers consider your driving record, your credit history, your level of boating experience, the value of the boat, whether you are the original owner, and claim history.

What does boat insurance cover?

Boat insurance us a lot like car insurance. Insurance typically covers physical damage, liability, personal property, towing and assistance.

Does insurance cover towing on the water?

On water towing is typically an additional feature of boat insurance. You also can get towing coverage from other organizations such as Boat/U.S. and Sea Tow.

What deductible and coverages should I choose?

Choose a deductible you would be comfortable paying in the event of a claim. In terms of policy limits, you need to choose an amount that protects the financial interests of you and your family if someone were to sue you, which can happen in America.

Conclusion

If you get all bogged down in the drudgeries of insurance, it can siphon some of the joy out of boating. However, there are a couple of points in which you might find some comfort. Compared with insuring a car with a teenage boy on your family policy, boat insurance is quite reasonable, and if something does happen to your pride and joy, the coverage will be there for you.

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