The Cost of Boat Insurance

The average cost of boat insurance typically ranges from $200 to $500 annually, with pricing influenced by variables such as coverage level and the type of vessel. Boat insurance premiums can range from as low as $100 to over $1000, depending on the power and value of the boat. Various factors influence the cost of boat insurance, such as the type of boat, its condition, where it is stored, and the cruising area.

Many insurance companies provide multiple discounts, including auto and boat insurance bundling discounts. When shopping for coverage, the cost of boat insurance is often a top concern for most individuals. However, due to the wide range of factors that affect boat premiums, your monthly payment may differ from the average estimates.

This article is a comprehensive guide to help you understand how boat insurance costs are determined. It includes information on how boat premiums are calculated, the different types of coverage available, and strategies for obtaining the most affordable rates. Additionally, we recommend some of the top boat insurance companies to assist you in your search.

Coverage for Boat Insurance

Boat insurance coverage options vary just as much as the boats themselves. From liability-only policies that meet state or marina requirements to comprehensive coverage with a wide range of speciality add-ons, there is something for every boat owner.

Here are the standard boat insurance coverages that are similar to those found in auto insurance:

Property damage liability: This coverage pays for damages to other parties’ boats and property if you are at fault in an accident.
2. Bodily injury liability: If you are responsible for a boating accident, this coverage will pay for the other parties’ medical expenses, lost wages, and related costs.
3. Collision insurance: Regardless of who is at fault, collision insurance covers damages to your boat in an accident.
4. Comprehensive coverage protects your boat from damages caused by non-accident sources such as fire, theft, vandalism, or weather.
5. Medical payments: If you or your passengers are injured in a covered accident, medical payments coverage will pay for medical expenses.
6. Uninsured boater coverage: If an at-fault boater does not have enough insurance coverage, this coverage will pay for property and injury expenses.

Choose the boat insurance coverage that suits your needs and provides the necessary protection for your valuable asset.

Additional Coverage Options for Boats

You will also discover a wide variety of speciality coverage add-ons. These optional coverage items can assist in covering additional costs associated with owning, storing, transporting, and using your boat.

Some of the most common boat insurance add-ons include:

Roadside assistance: This covers the cost of emergency roadside services if your vehicle breaks down while towing your boat.
2. Watersports injuries or damages: Covers expenses related to damages and injuries sustained during watersports activities such as water-skiing or tubing.
3. Fuel spill cleanup: Covers the expenses of cleaning up after a fuel spill from your boat into the water, including potential fines and other related costs.
4. On-water towing: Covers towing expenses to bring your boat to shore in case of a breakdown on the water.
5. Wreckage removal: This covers the costs of removing your wrecked or sunken boat from the water.
6. Ice and freeze damage: This covers repair costs if your boat is damaged by ice or cold due to improper winterization.
7. Mechanical breakdown insurance (MBI): Covers repair costs in the event of a mechanical breakdown for an additional monthly fee, functioning similarly to an extended warranty on a car with a reputable company.
8. Hurricane haul-out: This covers the expenses of relocating your boat if it is in the path of a hurricane.
9. Boat trailer: Covers damages to your boat trailer for an extra fee.
10. Personal property: Covers the costs of personal items like life jackets, phones, navigation equipment, and more.
11. Commercial liability: Covers liability costs if your boat is involved in a covered accident while used for business purposes.
12. Boat rental liability: Covers liability costs if the person driving a boat rented from you is found at fault for a covered accident.

Actual Cash Value Compared to Agreed Value

Most boat insurance providers provide two types of policies: actual cash value coverage and agreed value coverage. While they may seem similar, the distinction can be significant in a boating accident that leads to a total loss.

Under an actual cash value policy, your insurer will compensate you based on the current estimated value of your boat at the time of the accident. Conversely, an agreed-value policy will pay out a predetermined amount set by your insurer when you initially obtain the boat policy.

With an agreed value policy, you won’t experience a loss in value due to depreciation. Consequently, agreed-value boat insurance policies generally come at a higher cost than actual cash-value policies.

Exclusions of Boat Insurance Coverage

Marine coverage is available for various types of boats and uses, but there are certain causes of damage that insurance providers typically exclude. Some common exclusions include corrosion, damage from animals, impairment due to drug or alcohol use, damage caused by underage drivers, denting, deterioration, freezing, manufacturing defects, marring, mold, renovations, servicing and maintenance, and wear and tear.

Are you in need of insurance for your boat?

Boat insurance is typically considered optional, but there are specific circumstances where it becomes a necessity. For instance, your lender may insist on insurance until your loan is fully repaid. Additionally, certain states like Arkansas and Utah mandate boat owners to have insurance. Moreover, some marinas demand liability insurance for boats docking at their facilities. While there may be other instances where boat coverage is required, these are the primary ones to be aware of.

What Is the Average Cost of Boat Insurance?

Boat insurance costs can vary significantly, with average premiums typically falling between $200 and $500 annually. It is important to note that this is a general estimate, and actual costs can range from under $100 to several thousand dollars annually, depending on the specific type of boat and coverage options chosen.

Factors Affecting the Cost of Boat Insurance

The cost of boat insurance can vary significantly due to the many factors determining rates. Insurers carefully assess details about your personal information, boat specifications, and marine activities to determine the appropriate premiums for your coverage.

Type of Boat

The type of vessel you wish to insure significantly influences the price of marine insurance. Typically, larger and pricier boats result in higher premiums. Moreover, powerboats with greater horsepower generally incur higher insurance costs.

Here is a list of the most common watercraft types that can be insured:

Bass boats
2. Bowriders
3. Cruisers
4. Dinghies
5. Fishing boats
6. Jet boats
7. Personal watercraft (PWC) like Jet Skis
8. Pontoon boats
9. Powerboats/speedboats
10. Sailboats
11. Yachts
12. Kayaks
13. Canoes.

Boat Condition

The condition of your boat plays a significant role in determining the cost of your boat insurance premiums. This is because boats that are in better condition are considered to be more valuable assets. On the other hand, boats in poor condition are more prone to sustaining further damage, which increases the risk for insurers.

Deductible

Similar to auto insurance, you have the option to choose your deductible for your boat insurance policy. The deductible is the amount you are responsible for paying out of pocket for repairs or replacements. Generally, as you decrease your deductible, your premium will increase.

Cruising Area

The area where you plan to use your boat also affects your insurance premium. The larger the area you intend to cover, the higher the cost of boat coverage. Additionally, insurers assign different risk factors to different areas. For instance, if you plan to sail in areas prone to frequent storms, you can expect to pay a higher rate.

Storage Location

The location where you store your boat is another factor that impacts your insurance rates. If your boat is stored in areas susceptible to floods, tornadoes, or hurricanes, you will likely pay a higher premium for coverage.

Boating Experience

Insurance companies often consider the level of experience a boater has when determining premiums. Those with extensive boating experience may be eligible for lower boat insurance rates, sometimes in the form of a discount. Additionally, older boat owners generally pay lower premiums compared to younger ones.

Lay-Up Period

In many regions, boat owners have a specific period of time during which they do not use their boats. This period, known as a lay-up period, can qualify for reduced insurance rates with some insurers. However, it’s important to note that if you use your boat during this period and incur any physical damages, they will not be covered by the insurance policy.

Boat Insurance Savings

Saving money on boat insurance is possible through various discounts offered by providers. While not all insurers provide the same discount options, here are some of the most common ones available:

1. Multi-policy: Combining boat insurance with other types of coverage, such as homeowners, renters, or auto insurance, can lead to discounted rates.
Multi-boat: Insurers often give discounts when multiple watercraft are covered under a single policy, although personal watercraft may not always qualify.
3. Boat safety course: Completing a state-approved boat safety course can result in one of the most prevalent discounts within the boat insurance sector.
4. Pay in full: Opting to pay the entire premium upfront instead of in monthly instalments may lead to savings on boat coverage.
5. Claims-free: Insurers frequently offer discounts to boaters who maintain a certain period without filing boat insurance claims.
6. Responsible driver: Boaters with a clean driving record over an extended period can earn discounts from many insurance providers.
7. Association: Some insurers extend discounts to members of organizations such as the US Coast Guard Auxiliary, military groups, and professional associations.
8. Diesel fuel: Having a diesel-powered engine on your motorboat instead of a gasoline-powered one may qualify you for savings with certain insurers.

Risks Faced by Boat Owners

Even if marine insurance is not mandatory, there are compelling reasons to consider having it. Driving, transporting, and storing a boat entail certain risks that insurance can effectively manage.

Here are some of the most prevalent risks:

Collisions: Boats can sustain damage when they collide with other boats or stationary objects like piers and rocks.
2. Storage-related damage: Boats can suffer scratches, dents, or mishandling damage while being stored.
3. Damage while moored: Marinas pose a high-risk environment for damage, given the numerous boats and people navigating the area.
4. Damage during transit: Whether it’s due to road debris, adverse weather conditions, or a car accident, there are various ways your boat can be damaged during transportation.
5. Swamping: Even experienced boaters occasionally encounter situations where their boat runs aground or gets stuck in shallow water, resulting in potential damage that may require assistance.
6. Sinking: Multiple factors can cause a boat to sink. In such cases, you may not only face the loss of your vessel but also incur expenses for its removal.
7. Storm damage: Hurricanes and other powerful storms can damage your boat, even in storage.
8. Theft: Boat theft is a reality. In 2019 alone, there were 4,240 reported watercraft thefts, according to the National Insurance Crime Bureau (NICB).
9. Fire: Onboard fires pose one of the most common risks for boat owners. Insurers often provide discounts for installing onboard fire safety equipment.

By obtaining marine insurance, you can mitigate these risks and safeguard your investment in your boat.

Ways to Reduce Boat Insurance Expenses

Certain factors influence the price of boat insurance, which are beyond your control, such as your age or location. However, if you seek the most affordable boat insurance, you can take a few measures to reduce your premiums.

Determine the Amount of Boat Insurance Required

It is generally advisable to obtain the maximum coverage that fits within your budget. Nevertheless, if you want to reduce costs on your boat insurance, you can minimize coverage for essential necessities. For instance, if your homeowner’s policy provides liability coverage of $100,000, you might consider decreasing the liability coverage on your boat insurance policy. Additionally, limiting your cruising area and eliminating any unnecessary add-ons can contribute to reducing your premium.

Increase Your Deductible

Premiums typically decrease as your deductible increases with many insurance providers. Increasing your deductible is a viable option to reduce the expense of boat insurance. Nevertheless, a higher deductible also implies a greater financial burden in case of a covered accident. Your claim may not be processed if you cannot cover the deductible. Ensure that you can manage a higher deductible before adjusting your policy.

Look For Discounts

As previously stated, most companies provide various discounts to reduce the expenses associated with boat insurance. By combining multiple discounts, you can potentially increase your savings.

Conclusion

The average price range for boat insurance falls between $200 and $500 annually. Nevertheless, due to numerous factors influencing the cost, your premiums may exceed or be lower than this range. Obtaining a quote is essential to calculate the expenses associated with boat insurance precisely.