What is Boat Insurance Policy and Why is it Important?

What Is Boat Insurance Policy

Having boat insurance is very crucial for the safety of you, your boat and other passengers. It is financial security which can provide coverage against the damage or loss to the boat by fire, vandalism, theft or collision. A boat insurance policy can cover the liability claims up to the coverage limits you have taken. If you have damaged someone else’s property or injured them, then it can pay for their loss or medical bills. It will also help you against the legal issues that occurred due to the accident.

The most important thing is to choose the right boat insurance policy; otherwise, you may end up throwing your money into the sea. It is essential for the expensive boats and newer models to ensure them. You must have the best-suited boat insurance policy for complete peace of mind, additionally protects you from draining your saving on expensive repairs of the boat and its equipment. The marina may also require liability insurance if you want to dock the boat there.

Different types of boats that can be insured

There are several types of boats used all around the globe for a different purpose. Boats come in different shape, size, and capacity according to its uses and its insurance depend on its age, value, length, where it will operate et cetera.

Boat insurance can help you protect any type of boat for a price. Here is the list of some major types of boats that can be insured:

● Motorboat
● Personal watercraft or sailboat
● Watercraft with motors or engines
● Fishing boats
● Pontoon boats
● Paddle boats
● Leisure crafts
● Yachts
● Houseboats
● Powerboats

Apart from these, there are several other types of boats such as unpowered or man-powered boats, sailboats or motor boats. Every kind of boat needs to be insured so that you may not have to pay out of pocket for the expensive repair or replacement of it at the event of an unfortunate incident.

Types of Coverage in Boat Insurance Policy

The boat insurance policy provides various kinds of coverage and some other special coverage options for specialized protection. You are only responsible for the deductibles and rest can be covered by the insurance. Some specially designed coverage are:

Property Coverage

The boat insurance policy provides property coverage, which can help you financially in several unfortunate events of an accident, such as you lose control of the boat or there is any problem on the water. It can pay or help you pay the cost of repair if the boat is damaged in an accident, it can also provide coverage to replace the boat if it is stolen.

Benefits of Property Coverage

❖ Provide financial protection to the owner of the boat
❖ Protects the boat from many risks either it is on water or land

Liability Coverage

It will provide financial protection if you have caused an accident and harmed someone or destroyed their property. Liability coverage can protect you financially even if you have damaged the dock, other boats or structures. The insurance company will pay for the medical bills of other injuries if you are found responsible for the accident. It can also pay for the damage to their property which is resulted because of you as well as legal defense fees if the injured
person decides to file a lawsuit against you, it may also cover guest passengers’ liability.

Benefits of Liability Coverage

❖ Protects you from unexpected accidents and saves your money
❖ Provide mental peace by covering medical bills and legal defense expenses

Medical Payment Coverage

Medical payment coverage is a safety process, which protects you from paying expensive medical treatment of your friend or guest. If a guest or passenger gets injured on your boat because of an accident, medical payment coverage will pay the hospital bills, x-ray, and other medications. It is a straightforward expense which can be paid by the insurance company in some very easy steps, just by submitting hospital bills to them.

Benefits of Medical Payment Coverage

❖ Protects your guests or friends from pursuing a lengthy liability claim
❖ Provide medical facilities and help you save your time and money

Uninsured Watercraft Coverage

Some boaters operate a watercraft without insurance, which can harm other boaters too. At that
time your boat insurance policy will help you if you have added uninsured or underinsured watercraft coverage in it. It can help you by covering the expenses on medical bills and damage if the uninsured boater causes an accident and injure you or others on your boat. It can also cover the other resulting expenses.

Benefits of Uninsured Watercraft Coverage

❖ Provide protection if the other uninsured watercraft collides with your watercraft
❖ Provides peace of mind by covering the expenses resulted by the accident

Collision Damage

A very valuable coverage is collision damage coverage, which can help you pay to repair or replace your boat, in case of damage or loss by a collision. Your boat insurance policy can also include the engine blow resulted from collision or manufacturer’s defect. Some insurance companies do not include cleanup of wreckage or engine blow because of normal wear and tear, which you can buy separately to increase your safety.

Benefits of Collision Damage

❖ Provides protection even if you are responsible for the accident or damage
❖ Protects you from paying for repair or replacement of the boat

Comprehensive Coverage

This coverage will protect your boat if it is vandalized, stolen, damaged in an incident (not in a collision) or fire. Comprehensive coverage, also known as “other than collision,” is a highly recommended coverage for the safety of your boat, especially if it is a newer model or expensive one. It will cover the expenses incurred due to the damage or loss by covered perils, up to the limit of your policy.

Benefits of Comprehensive Coverage

❖ Protects your boat if it is on water, land or in the dock
❖ Provides safety against heavy expenses resulting from covered perils

Other than these you can add some optional coverage to your boat insurance policy like oil spills, damage to dry dock, water-towing, roadside assistance, fishing equipment and so many alike to keep you ready for any circumstances and to protect you, your boat and passengers.

You can customize your boat insurance to fit your requirement and your budget, by including any required coverage if it is not included in your standard boat insurance policy.

Save Money On Boat Insurance

Boat insurance is essential on occasions of motorboat accident, sailboat or personal watercraft theft. It is also useful at times when you injure someone accidentally or damage their someone’s property related to the boat.


Boat insurance has different types of coverage in its policy. We will look at considering a number of them.

Property coverage

There is an unavoidable risk that happens. Or risk we do not envisage. Boat insurance helps protect a boat and other watercraft from such risk. For example, the policy for property coverage may help settle the bills to repair your boat on cases of damage or an accident. Also, on claims of theft, Property coverage may help to replace it. Also, property coverage applies to protection of boat and other watercraft both on water or land.

Liability coverage

Liability coverage applies to situations such as when an accident that’s caused by you and damages someone else’s boat property. Or a situation where someone gets injured who is not on your boat, liability coverage will cover for the expenses that arise as a result.

Medical payments coverage

Medical payments coverage applies to cases where you or your passengers sustain injuries as a result of an accident on your boat. Medical payments coverage will be responsible for expenses such as hospital bills, medications or X-rays, drugs, etc.

Uninsured watercraft coverage

It’s interesting to note that even when an uninsured boat hits your watercraft which result in you or one of your passengers getting injured, uninsured watercraft coverage covers for its expenses. This coverage on your boat insurance policy may help pay for the resulting costs.


There are varieties of coverage policies. It is important and strongly advised you ask your agent about coverage that’ll suit you. You can ask questions around boat trailers, special equipment, towing coverage, accessories, etc. Hence, you will need to be sure the insurance you’re going for protects that best suits you.

Other considerations to note is if your coverage plan help pays for expenses like cost of fuel spills, wreckage removal in the event of an accident on the water, and situations peculiar to you.

It is better to expect the best while you get prepared for the worse. Ensure you’re adequately protected before you take your boat out on the water.

As explained earlier, boat insurance is a sure way to make sure you’re covered and protected when an accident occurs when out on the water.

Why get boat insurance?

New boaters widely believe that homeowners policy coverage will cover their boat also. Sadly enough, this is far from being the truth. Always ensure your new investment remains safe if something happens. Also, make sure you protect your financial assets in case there is an accident. Either you’re at fault or not. To be sure about this protection, you must purchase an insurance policy now on your new boat.

Averagely, depending on the type of boat and individual history, the prices for boat insurance range from about a hundred dollars to over $1,000. Some factors determine the rates of boat insurance. They include:

  • Type of Boat
  • Size of the Engine of the Boat
  • Size of Boat
  • Expected Use of the Boat
  • Your Personal Profile/history

It is strongly advised that irrespective of the cost, boat insurance is simply a must. In buying a boat, it is important you include the cost of insurance to the total cost of ownership or purchase each year.

Ways boat insurance differs from home and auto insurance

Indeed, boat insurance is a mix of both home and auto insurance, in many ways. Your boat insurance will protect if there’s an injury on your boat, just like in home insurance. You will be given an option of either a total replacement or cash value if your boat is lost totally. 

Boat coverage area

It is a common situation when boat owners are surprised to find that their boat doesn’t have full coverage. Virtually all boat policies have a navigational warranty. The navigation warranty mostly covers most areas like the inland waters of the United States, Canada, and the coastal waters.

Most plans don’t cover you in areas like the international waters. However, you will need to request such areas be added to your coverage, although this will cause the total price of the coverage to increase.

Some boat owners get confused if their boat is covered when not in the water. Although your boat is covered, it’s by a different policy and not your boat insurance policy. The boat gets covered by your automobile insurance policy when it gets attached to your car or truck. Your homeowner’s policy applies when your boat is parked at your home.

How to save money on boat insurance

No boat owner would be happy spending more on different insurance policies after purchasing a new boat. It is of good news is that you can indeed save some money on your bot insurance. There are things you can do to help you on saving a little on your premiums each year. They include:

  • Take a boating class: You can take a boating class that takes you through all that’s needed to know about boats and boating safety. There’s always a discount given to boat owners who diligently learn precisely how to operate their new watercraft
  • Be specific: you need to know exactly what policies you want. Sometimes, insurance companies will make attempts to make you get coverage policies than are required thereby upping their sales. For example, coverages for owning a small fishing boat are different from a yacht. So, don’t invest in insurance for a yacht. Be sure to know the insurance policy for your type of boat.
  • Invest in safety features: it is wise to get all the required safety equipment required of you. Insurance companies often give discounts to boat owners who invest this.
  • Extend the lay-up period: it is advised as new boat owners, to add the lay-up period to your policy. The lay-up period is that time when your boat will not be in use, like the middle of winter. Your insurance company can give you a discount for the times your boat will be in use for including this period.

As it’s been earlier mentioned to prepare for the worse while hoping for the best, protecting yourself is a sure way to be sure you, your passengers and your new investment are protected when something happens as a result of either usage or non-usage. Note that while you choose your best-suited policy, you can save some money also and still have a relaxed mind for your boat, yourself and passengers. And remember, safety comes first!