How Much Boat Insurance Do I Need?

Boat insurance needs vary between boat owners. Many states don’t legally require a policy, but this doesn’t mean coverage isn’t needed.

Marina Requirements

Many marinas require their boaters to carry a certain amount of liability insurance. Liability insurance provides compensation in case a boater causes property damage or bodily injury to someone else while operating the insured vehicle. This is required by marinas to take care of accidents both on and off the water that the marina could otherwise be held liable for.

Guest passenger liability also provides compensation for damages and injuries caused by a guest operating a boat with permission from the owner. It’s generally recommended that boaters carry around $1 million in boat insurance liability to cover possible accidents.

Boat Insurance Coverage

Aside from liability, policies also cover:

• Physical damage due to fire, lightning, wind, hail, smoke, explosions, theft, vandalism, collision and more.
• Medical payments cover medical expenses for the driver and their passengers after an accident, no matter who is considered at-fault.
• Trailer and boat accessories from damage, loss or theft. This generally applies to the boat trailer and permanently attached features.
• Towing

There is also additional coverage available to cover items left on the boat from theft and vandalism.

It’s recommended that boat owners carry enough boat insurance to cover the replacement cost value of the boat. This varies per boat, so be sure to calculate how much it would cost to replace your boat in case of an accident or disaster in order to purchase the right amount of insurance.

Actual Cash Value vs. Agreed Amount Value

There are two types of boat insurance policies when it comes to boat insurance: actual cash value and agreed amount value. An actual cash value policy provides compensation for loss of or damage to the boat while accounting for depreciation. In other words, as the market value of the boat goes down, so does the amount of compensation you may receive.

Agreed amount value policies provide compensation based on a set amount agreed upon between the insured and the insurance provider. This type of policy does not account for depreciation and can replace partial loss of old items with newer items.

Be sure to speak with your insurance agent about your boat insurance needs. Depending on the size and purpose of the boat, you may need more or less insurance than your neighbor.