Boat insurance can keep your finances afloat

Justin Stoltzfus

Some people don't think of boating as "operating a motor vehicle." But just like cars, trucks or SUVs, any boat over a certain amount of horsepower needs the right insurance to cover any injuries and property damage it causes, as well as theft and damage to the boat itself.

Coverage for small boats

If you've gone the low-tech route and bought a canoe or rowboat, these should be covered under your home insurance policy, according to the Insurance Information Institute. The same goes for small sailboats less than 26 feet long) and powerboats with less than 25 miles per hour of horsepower), according to the National Association of Insurance Commissioners NAIC).

However, your home insurance policy will likely include only about $1,000 of physical damage coverage for a boat, according to the Insurance Information Institute. Liability coverage is not included. To get liability coverage for a small boat, you'll need to add it as an endorsement to your policy.

Coverage for bigger boats

Home insurance coverage with or without a liability endorsement) covers only small or low-power boats. Bigger boats above a certain threshold of power like yachts, larger power boats and jet skis) need separate boat insurance policies.

Premiums depend on the value and size of your watercraft and where you use it. Progressive, for example, covers boats that are up to 50 feet long and $250,000 in value, as well as watercraft up to 15 feet in length and $27,000 in value.

Boat insurance typically covers the following, according to the Insurance Information Institute:

  • Physical loss and damage: The amount your insurance company will pay depends on whether you've insured the boat for its actual cash value replacement cost minus depreciation) or an agreed upon value an amount you and your insurance company have agreed on beforehand and that is stated in your policy).
  • Bodily injury: For any injuries you cause to others while using your boat.
  • Property damage: For damage you cause to others' property while using your boat.
  • Guest passenger liability: For legal expenses incurred while someone else is using your boat with your permission).
  • Medical payments: For injuries to you and your passengers.

Boat insurance providers offer a variety of options, according to the Insurance Information Institute, including liability limits from $15,000 to $300,000 and a range of deductibles.

While shopping for insurance, the NAIC recommends taking into consideration what you'll be using your boat for. For example, will your policy cover you if you're towing tubes or skiers? Progressive provides an additional list of items to look for in boat coverage, including:

  • Fuel spill coverage.
  • On-water towing in case your boat breaks down).
  • Uninsured boater coverage in case your boat is hit by a boater who doesn't carry liability coverage).
  • Wreck removal coverage.
Fishing equipment coverage.

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