Do You Need Boat Insurance?

Whether you currently own a boat or are thinking of buying one, chances are you have wondered about boat insurance and whether or not it’s required by law. Like many other types of insurance, it depends on several factors; but, in general, boat insurance is not required by law in most states.

Learn more about boat insurance so you can determine the best type to purchase to cover your investment.

Boat insurance requirements by state

What other factors may require you to have boat insurance?

Even if your state doesn’t require you to take out an insurance policy for your boat, there are several other factors that may require some form of boat insurance.

You finance the boat purchase through a bank

If you take out a loan in order to buy your boat, it’s extremely likely the bank will require you to provide proof of insurance in order for them to lend you the money. If something happens to the boat before you pay off the loan, the bank needs to know the repairs will be covered. When you finance anything like a boat or a car, the bank essentially owns it until you pay it off, so it makes sense that they would require insurance.

The type of insurance required depends on your bank and the amount of the loan. When you’re shopping around for financing, make sure you ask the lender what type of insurance they require so you can fit the monthly premium into your budget.

You plan to moor your boat in a port or marina

Most ports and marinas require boats to carry insurance in order to moor there. The amount of coverage required depends on the port or marina and its specific policies. Before you set out to moor your boat anywhere but your own property, make sure you ask what kind of insurance is required and how much coverage is needed.

When you go to moor your boat, you will need to provide proof of insurance to the marina or port manager, so make sure you keep it with you.

What does boat insurance cover?

Similar to car insurance, boat insurance protects you if you are in an accident that causes damage to your boat, your passengers, or another vessel. There are several different types of boat insurance that you can take out.

Liability

If your boat causes damage to another boat, liability coverage can help pay for repairs to that boat so you don’t have to pay out of pocket. You may choose to get more coverage if you boat often in an area with expensive boats.

Comprehensive

Comprehensive boat insurance will cover any damage to your boat that occurs from something like a fire, theft, or weather-related incident. In other words, it covers you for things that are not within your control.

Collision

Just like it sounds, collision insurance covers any damage to your boat that occurs from a collision with another boater. It can also cover you if your boat were to capsize. This type of insurance usually pays out no matter who was at fault.

Uninsured/underinsured boater

If your boat is hit by another boat that is uninsured or underinsured, this type of insurance will help pay for repairs.

Medical

If you’re in a boating accident that results in injury to you or to one of your passengers, medical insurance will cover their hospital or doctor bills. This type of insurance may not kick in until you’ve reached your limit on coverage from your health insurance provider, depending on where you live.

Frequently asked questions

Still have questions about boat insurance? Here are a few common questions broken down with easy-to-understand answers.

Is it illegal to not have boat insurance?

In most states, it is not required by law to have boat insurance. Check the table above to see the requirements in your home state, or any state where you plan to take your boat. You can also contact a local insurance agent to help determine what type of coverage you need if it is required by law.

How much does boat insurance cost per month?

That depends on what type of insurance policy you take out and how much coverage you opt for. Like with any other type of insurance, it’s a good idea to shop around at different insurance agents to see who can give you the best deal. If you have a budget you need to stick to, make sure you let the agent know up-front so they can offer you a policy that fits your needs and your wallet.

Are boats covered by auto insurance?

Your auto insurance doesn’t cover your boat when it’s in the water, but it may cover any damages that occur while it’s being towed by your insured vehicle. It’s a good idea to check with your auto insurance provider to see what is covered and what the limitations are.

Can a boat be covered by a homeowners insurance policy?

Your homeowners insurance may cover your boat, but there are limits. Your insurance provider may only cover your boat if its value is under a certain amount. Your homeowners insurance will likely also only cover your boat if it’s on your property, so if something happens when you’re out on the lake or in the ocean you won’t be covered.

Check with your insurance agent to see what, if any, coverage your homeowners policy has for your boat.

Summary

While most states don’t require boat owners to have insurance, there are many other factors that may make it a necessity. Even if your state doesn’t require boat insurance it’s still a good idea to get some coverage to protect your asset. Boats don’t come cheap, and if something were to happen, insurance would help you recoup some, or all, of your loss.