Cost of Boat Insurance

The average cost of boat insurance ranges from about $200 to $500 per year. However, this figure is a rough estimate based on the most common types of boats. In reality, boat premiums can range anywhere from less than $100 per year to thousands of dollars annually.

Boat Insurance Cost Factors

There is such a wide variation in the cost of boat insurance because of all the factors that go into calculating rates. Insurers take information about you, your boat and your marine activities into account when considering your premiums.

Type of Boat

The kind of boat you want to insure is one of the primary factors in the cost of marine insurance. Generally speaking, larger and more expensive boats drive higher premiums. Powerboats with more horsepower also tend to cost more to insure.

These are the most common types of watercraft you can insure:

• Bass boats
• Bowriders
• Cruisers
• Dinghies
• Fishing boats
• Jet boats
• Personal watercraft (PWC) such as Jet Skis
• Pontoon boats
• Powerboats/speedboats
• Sailboats
• Yachts
• Kayaks
• Canoes

Boat Condition

The condition of your boat contributes to the cost of your boat insurance premiums. This is because boats in better condition are more valuable as property. Boats in poor condition are also more likely to suffer further damage.

Deductible

For your boat insurance policy, you can typically choose your deductible — the amount you have to pay out of pocket for repair or replacement. Just like with auto insurance, your premium will usually go up as your deductible goes down.

Cruising Area

Part of your premium is based on where you intend to use your boat. The greater area you cover, the more you can expect to pay for boat coverage. In addition, insurers assign different risk factors to different areas. If you plan to sail in areas with more storms, for example, you may pay a higher rate.

Storage Location

Where you store your boat is also a factor in your rates. If your boat is stored in areas that frequently experience events like floods, tornadoes or hurricanes, you’ll likely pay more for coverage.

Boating Experience

Many insurers take into account how much experience a boater has when determining premiums. Some may offer lower boat insurance rates to mariners who have operated a boat for more than a few years, sometimes in the form of a discount. Older boat owners often pay lower premiums than younger ones as well.

Lay-Up Period

People in many parts of the country can’t or don’t use their boats during certain parts of the year. This period of time is known as a lay-up period, and some insurers offer reduced rates if you declare one that’s long enough. However, if you use your boat during this period, any physical damages you incur will not be covered.

Boat Insurance Discounts

Discounts are an easy way to save on the cost of boat insurance. Not every provider offers the same discount opportunities, but these are the most common:

• Multi-policy: Boat insurance is one type of coverage that you can bundle with other insurance products like homeowners, renters or auto insurance. 
• Multi-boat: Many insurers offer discounts if you cover more than one watercraft under the same policy. PWCs are sometimes excluded from this discount. 
• Boat safety course: You can complete a state-approved boat safety course to receive one of the most common discounts in the boat insurance industry.
• Pay in full: You may be able to save on boat coverage if you pay for your premium up front rather than across monthly payments.
• Claims-free: Many insurers offer discounts for boaters who maintain a set amount of time without filing a boat insurance claim. 
• Responsible driver: Boaters who go for an extended period of time without an accident on their driving record can earn a discount from many providers.
• Association: Some insurers offer discounts to members of the U.S. Coast Guard Auxiliary, other military groups, professional organizations and more.
• Diesel fuel: You can save with some insurers if you have a diesel-powered engine on your motorboat rather than a gasoline-powered one.

There is as much range in boat insurance coverage as there is in boats themselves. You can choose liability-only policies that satisfy state or marina regulations, high-limit comprehensive coverage with loads of specialty add-ons and everything in between.

Standard Boat Coverages

The standard boat insurance coverages are similar to those for auto insurance:

• Property damage liability: Covers damages to other parties’ boats and property in an accident for which you are found at fault. 
• Bodily injury liability: Covers other parties’ medical expenses, lost wages and related costs in a boating accident for which you are found at fault.
• Collision insurance: Covers damages to your boat, regardless of who is at fault for an accident.
• Comprehensive coverage: Covers damages to your boat from sources other than an accident, such as fire, theft, vandalism or weather.
• Medical payments: Covers medical expenses for your party related to a covered accident.
• Uninsured boater coverage: Covers property and injury expenses if an at-fault boater lacks sufficient coverage.

Boat Insurance Add-Ons

You’ll also find a wide range of specialty coverage add-ons. These optional coverage items can help cover other costs related to owning, storing, transporting and using your boat.

Here are some of the most common boat insurance add-ons:

• Roadside assistance: If your vehicle breaks down while towing your boat, this covers the cost of emergency roadside services.
• Watersports injuries or damages: Covers costs related to damages and injuries sustained while participating in watersports like water-skiing or tubing. 
• Fuel spill cleanup: Covers the cost of cleaning up after your boat spills fuel into the water. Sometimes covers fines and other costs related to the spill.
• On-water towing: Covers towing costs to get your boat to shore if it breaks down on the water.
• Wreckage removal: Covers the cost of pulling your wrecked or sunken boat out of the water.
• Ice and freeze damage: Covers the cost of repairs if your boat was damaged by ice or cold after an improper winterization.
• Mechanical breakdown insurance (MBI): Covers repair costs in the case of a mechanical breakdown for an additional monthly fee. With a reputable company, this works similar to an extended warranty on a car.
• Hurricane haul-out: Covers the cost of relocating your boat if it’s in the path of a hurricane.
• Boat trailer: Covers damages to your boat trailer for an additional fee.
• Personal property: Covers the cost of personal items like life jackets, phones, navigation equipment and more.
• Commercial liability: Covers liability costs if your boat gets into a covered accident while being used for business purposes.
• Boat rental liability: Covers liability costs if someone driving a boat you rent to them is found at-fault for a covered accident.

Actual Cash Value vs. Agreed Value

Most boat insurance companies offer two types of policies: actual cash value coverage and agreed value coverage. Though they sound similar, the difference can be significant if a boating accident results in a total loss.

With an actual cash value policy, your insurer pays out the current estimated value of your boat at the time of the accident. An agreed value policy, on the other hand, pays out a predetermined amount set by your insurer when you start the boat policy.

With an agreed value policy, you won’t lose value due to depreciation. As a result, agreed value boat insurance policies typically cost more than actual cash value policies.

What Boat Insurance Doesn’t Cover

You can purchase marine coverage for a wide range of boats and purposes. However, there are some causes of damage that providers, for the most part, won’t cover. Here are some of the most common exclusions:

• Corrosion
• Damage from animals
• Damage while using drugs or alcohol
• Damage from underage drivers
• Denting
• Deterioration
• Freezing
• Manufacturing defects
• Marring
• Mold
• Renovations
• Servicing and maintenance
• Wear and tear

In most cases, boat insurance is optional. However, there are a few scenarios in which boat insurance is necessary:

• Your lender requires it: Some finance companies mandate that you get insurance coverage on your boat until you pay off your loan.
• Your state requires it: Arkansas and Utah require boat owners to maintain an insurance policy, but they are the only states that do.
• Your marina requires it: Some marinas require boats that dock there to carry liability insurance.

There may be some other situations that require you to have boat coverage, but these are the most common.

Boat Owner Risks

Even if you aren’t required to carry marine insurance, there are strong arguments to have it. Driving, transporting and storing a boat all come with risks that insurance can help manage.

Here are some of the most common:

• Collisions: Boats can suffer damage when they hit other boats or stationary objects such as piers and rocks.
• Damage during storage: Boats can get damaged in storage if they’re scratched, dented or mishandled while being moved around.
• Damage while moored: Marinas are high-risk areas for damage, with many boats and people navigating the area.
• Damage during transit: Whether from road debris, inclement weather or a car accident, there are many ways your boat can be damaged during transport.
• Swamping: Even experienced boaters occasionally run their boat into a sand bar or ground in shallow water. This can cause damage to your boat and may require help getting unstuck. 
• Sinking: There are many reasons a boat can sink. If it does, you’ll often have to pay to have it removed in addition to the loss of your vessel.
• Storm damage: Hurricanes and other powerful storms can damage your boat, even while it’s in storage.
• Theft: Boat theft does happen. According to the National Insurance Crime Bureau (NICB), there were 4,240 watercraft thefts in 2019 alone.
• Fire: Onboard fires are one of the most common risks for boat owners. Insurers typically offer discounts for installing onboard fire safety equipment.

Boating Accident Statistics

Boating accidents are more common than you may think. According to data from the United States Coast Guard (USCG), there were 5,265 reported boating accidents in 2020, resulting in 3,191 injuries and 767 deaths.This same data also suggests that boating accidents — and the property damage costs resulting from those accidents — are on the rise.

In 2020, the number of boating accidents increased by 26.3% from 2019. The number of injuries from boat accidents rose by 24.7% and deaths from those accidents increased by 25.1% from the previous year.

USCG data shows that the cost of property damage from boat accidents is also on the rise. Boating accidents accounted for $62.5 million in damage in 2020. This is an increase of nearly 36% since 2017. 

While boat insurance may not be required for you, it’s almost certainly a good idea to have in most cases. Having a boat accident without it could easily turn into a financial disaster. On the other hand, having sufficient coverage can help insulate you from financial risk and provide valuable peace of mind.

Does Homeowners Insurance Cover Your Boat?

Your homeowners insurance policy may offer liability coverage for your boat. Many of these policies come with coverage for restitution and legal expenses if you are found at fault in a boating accident.

Your homeowners insurance likely covers damages to your boat in limited situations. These are some of the more common sources of damage that a homeowners policy is likely to cover:

• Explosions
• Falling objects
• Fire
• Hail
• Theft
• Vandalism
• Wind

Your boat may be covered under these situations, but most homeowners policies only pay up to $1,000 in damages. For many policies, $1,000 is a common deductible. This means it might not make sense to file a damage claim through your homeowners policy.

Some factors that affect the cost of boat insurance are things you can’t easily change, such as your age or location. But if you’re looking for the cheapest boat insurance, there are a few things you can do to help lower your premiums.

Decide How Much Boat Insurance You Need

In most situations, it’s good to get as much coverage as you can comfortably afford. However, if you’re trying to save money on boat insurance, you can cut coverage to the bare minimum that you may need.

For example, if your homeowners policy offers liability coverage of up to $100,000, you may want to reduce the amount of liability coverage on your boat insurance plan. Reducing your stated cruising area and cutting out add-ons can also help lower your premium.

Increase Your Deductible

With most insurers, your premiums tend to go down as your deductible goes up. So if you’re looking to save on the cost of boat insurance, raising your deductible is one way to do it.

However, raising your deductible also means you’re at risk of paying more out of pocket if you have a covered accident. If you can’t afford to pay your deductible, you won’t be able to complete your claim. Be sure that you can afford a higher deductible before making that change.

Look For Discounts

As we mentioned earlier, most companies offer at least a few discounts to help you save on the cost of boat insurance. In many cases, you can combine some of these discounts for even more savings.

Insurers typically list most of their discounts online, but more may be available. Before you sign a contract, be sure to ask your insurance agent about any discount opportunities.

Establish a Lay-Up Period

Some boat insurance companies offer pricing that includes a discount for a lay-up period. If you know that you won’t use your boat for an extended period of time each year, such as during winter months, establishing a lay-up period with your insurer could bring your boat insurance premiums down.

Take a Boat Safety Course

Most insurers offer a discount for completing a state-approved boat safety course — and for good reason.

Cost of Boat Insurance: Conclusion