If you know the difference between an inboard and outboard, it’s likely that you’re a boater or may be considering a purchase. Similar to your home or your car, boats need insurance as well. Your home insurance may provide some limited coverage, but if you’re like most boaters, you’ll want more comprehensive coverage for your pride and joy.
There are special considerations and some potential coverage gaps to be aware of, and the company that insures your home or car may or may not be the best choice for your boat insurance.
Quick Look: The Best Boat Insurance To Get Right Now
- Best Boat Insurance for Classic Boats: Hagerty
- Best Boat Insurance for Value: Progressive
- Best Boat Insurance for Convenience: State Farm
- Best Boat Insurance for New Boaters: BoatUS
- Best Boat Insurance for Agent Expertise: Markel
- Best Boat Insurance for Flexible Coverage: Foremost
What Is Boat Insurance?
Insurance is the transfer of risk from an individual to a pool. In effect, everyone who is insured pays for losses whether that loss is his own or someone else’s loss. The idea is that only a certain percentage of insured parties will have a loss within a given time frame. This is called frequency.
Over time, insurers also learn the average cost of losses, also referred to as severity. Combined with individual rating factors like claims history or accident history, insurers determine a premium to charge for the coverage on your boat insurance policy.
The insured value also plays a role. A 16-foot pontoon boat will have a lower insured value than a 75-foot cabin cruiser, which affects premiums.
If you have a covered claim, your boat insurance comes to the rescue and can cover damage to your boat, damage to the property of others, and personal liability due to boating activities.
What Does Boat Insurance Cover?
A boat insurance policy is similar to a car insurance policy in many ways, but offers some extras that cover risks specific to boating. Much like a car insurance policy, your boat insurance won’t cover maintenance or wear and tear. Think sudden and accidental when you think about most types of insurance coverage.
These words or words to the same effect are likely to be in your boat insurance policy and make it clear that boat insurance is primarily intended to cover accidents or sudden losses.
Sometimes boats bump into things. Collision coverage provides protection for your boat and can pay toward the cost of repair or replacement. Be aware that not all policies provide coverage to clean up wreckage or sunken boats. Often, this is an add-on coverage for your policy, called a rider.
Boats can be damaged in other ways, and sometimes, boats disappear altogether. Your comprehensive coverage provides protection for theft, vandalism and other risks that can damage your boat.
Property damage liability
Because boats sometimes bump into things like other boats or docks, it’s important to have coverage for property damage liability. This coverage covers “other people,” or more specifically, their things, which can be expensive to repair or replace.
Bodily injury liability
Your boat insurance policy provides coverage for injuries you may cause to others and can cover medical bills, lost income, pain and suffering and the cost of your legal defense. Bodily injury liability coverage does not cover your own boating-related injuries, however. Most marinas require $300,000 up to $1,000,000 in liability coverage.
Several additional coverages may be available depending on the insurer you choose. Some insurers may offer some of these coverages as part of a standard policy or package and in other cases, these coverages may be add-ons – or not available at all.
- Medical coverage
- Roadside assistance
- Wreckage removal
- Watersports coverage
- Fuel spill coverage
- Coverage for carry-on items
- Coverage for fishing equipment
- Trip interruption coverage
- Uninsured boater coverage
- Boat trailer coverage
- Towing coverage
Like your home or auto insurance policy, your boat insurance policy is subject to a deductible. The deductible is the part of a claim that you pay. Your insurer will only cover claims that exceed the deductible and the deductible will be subtracted from the claim payment. A $5,000 covered loss with a $1,000 deductible will pay $4,000. Be sure the deductible you choose is a number you can cover out of pocket.
Your boat insurance policy is subject to coverage limits. The area of your policy where this is most important is liability. Damage to the property of others or bodily injuries caused to others are only covered up to the limits of your policy. Liability above the limits your policy provides can jeopardize your savings, your home or your future earnings. Review this coverage carefully.
Like all insurance policies, your boat insurance policy doesn’t cover some risks. Expect to find wear and tear among the exclusions, as well as damage from insects, mold, animals and marine life. Also, expect damage related to maintenance to be excluded from coverage.
Actual cash value vs. agreed value
Boat policies can provide coverage for physical damage in two primary ways: actual cash value (ACV) or agreed value, the latter of which means that you and the insurer agree to a coverage amount value for your boat.
When you see “actual cash value” on an insurance policy, think of “depreciated value.” The policy adjusts the insured value of your boat based on age or wear and tear. Most auto policies are written this way as well. If you have a total loss, your policy may not provide enough coverage to replace your boat.
Agreed value coverage does what its name suggests: provides enough coverage to repair or replace your boat with the same type and quality up to the agreed value. While this may be preferable to actual cash value coverage, it’s typically more expensive as well.[embedded content]
Can I Use My Homeowners Insurance Policy?
Your homeowners insurance policy can provide limited protection for your boat – but often only in certain circumstances, like when your boat is home, in some cases. Home insurance policies often treat your boat like a television, furniture or any other kind of personal property.
Liability coverage may also be limited and may not provide any protection when your boat is on the water or if your boat is over a certain size or above a certain horsepower. Expect similar gaps in coverage on many policies for things like fuel spills or wreckage. If you own anything bigger than a rowboat, consider buying a specialized boat insurance policy to provide dedicated coverage.
How We Chose and What To Look for in a Policy
Ideally, you’ll want to choose an insurer that makes boat insurance a priority. Car and home insurance are much more common and even some nationally-known insurers treat boat insurance as an afterthought. That doesn’t make the policy useless, but it can mean that it may be difficult to get a straight answer on what the policy covers.
Insurance reps and agents simply might not know because it isn’t their core business. Specialty insurers who focus on boat insurance or similar products are often a solid option.
You’ll want to choose a company that is well-established. In most cases, the state will assume the obligations of an insurer that goes under but it’s always preferable to work with the insurer directly if you have a claim.
Some insurers offer standard policy features that would come at an extra cost with other insurers. These extra features can provide greater value. Even seemingly small differences in language, like “actual cash value” compared to “agreed value” can make a huge difference in how your claim is covered and your out-of-pocket expense. Often, the best boat insurance companies offer several extra coverages as part of a standard policy.
Best Boat Insurance Providers
Because boat insurance is a specialty type of insurance, you’ll find a few insurers in our roundup that may not be household names. In the boating industry, some have become nearly legendary.
Hagerty offers boat owners their Agreed Value boat insurance, and has been protecting customers for over 30 years.
Best Boat Insurance for Classic Boats: Hagerty
Owners of classic cars are probably familiar with Hagerty or may even have a car insured with this specialty insurer. Owners of classic boats have special needs that won’t be well-addressed by some boat insurance policies, particularly those that utilize actual cash value to determine coverage limits.
Hagerty prides itself on personalized service and works through a network of independent agents who can advise you on your coverage. Members of many well-known boating clubs can expect substantial discounts with Hagerty.
Progressive boat insurance doesn't have travel restrictions, travel costs, or marine surveys as requirements to get their coverage.
Best Boat Insurance for Value: Progressive
If your seafaring adventures keep you within 75 miles of the U.S. or Canadian coastline, Progressive can be a solid choice for boat insurance. Although best known as an auto insurance provider, Progressive has been providing boat insurance for over 35 years, insuring over 1 million boats through its network of independent agents.
Progressive’s boat insurance offerings center on small to midsize boats, with a limit of 50 feet in length or $350,000 in value. Extra coverages built into your policy include accident forgiveness, roadside assistance, fuel spill coverage and water sports coverage.
State Farm boat insurance looks to cover the boat hull, boat motor(s), described boat equipment, and the boat trailer if requested.
Best Boat Insurance for Convenience: State Farm
With over 19,000 contracted agents throughout the U.S., it’s likely that there’s a State Farm agent located near your home. State Farm agents work exclusively with State Farm insurance products and the company invests heavily in product training to ensure that agents and representatives know their way around the details of your boat insurance coverage.
If you already have insurance with State Farm, you know that the company provides multi-policy discounts or the opportunity to combine insurance payments and cut down on paperwork. Whether your boat is a kayak or a yacht or something in between, State Farm can help you customize a coverage solution to meet your boat insurance needs.
BoatUS provides policies for all boat types, from yachts to PWCs, coverage for fishing, watersports gear and personal effects, and uninsured boater protection.
Best Boat Insurance for New Boaters: BoatUS
Purchased by Geico in 2015, BoatUS provides coverage for all boat types with coverage options ranging from liability-only coverage to actual cash value coverage and up to full coverage at agreed value. All policies include supplemental medical coverage, fuel spill liability coverage, and your true cost of insurance is reduced through diminishing deductibles.
Discounts are available for completion of approved boating safety courses, good driving records, and if you have auto insurance through Geico. Free boating safety courses are available through BoatUS.org, and are recognized by the U.S. Coast Guard, NASBLA and state boat licensing agencies.
With over 30 years of experience under their belt, Markel offers customers specialized boat protection which includes water-sport liability protection, medical payment coverage, diminishing deductibles, and more.
Best Boat Insurance for Agent Expertise: Markel
It’s comforting to work with insurance agents who don’t just sell boat insurance policies but who are active boaters themselves. As agents and boaters, Markel’s insurance agents understand both the risks and the coverage solutions that can help you protect your assets.
Markel Corp. provides several policy extras without the extra cost, including personal effects coverage for up to $1,000, emergency towing for up to $500 and diminishing deductibles that reduce your out-of-pocket costs for a claim by 25% after each loss-free year.
Foremost provides customers with Foremost Marine Choice boat insurance which includes personalized coverage based on watercraft and price point.
Best Boat Insurance for Flexible Coverage: Foremost
While many other insurers focus on home and auto insurance, Foremost has built its business by insuring specialty risks that may not be well understood by broad market insurers. Foremost breaks out its boat insurance offering into a good/better/best selection, providing coverage packages to meet the needs of most boaters.
Safety course discounts of up to 20% are available and extras like pet coverage, trip interruption coverage and hurricane haul-out coverage are included at no extra charge with premium packages.
Choosing the best boat insurance coverage to meet your specific needs can be more complicated than choosing auto insurance or other types of coverage that are more standardized. Many insurers that provide boat insurance coverage don’t specialize in boat insurance, which can lead to coverage gaps or policies that are not well understood by either the agent or the consumer.
As with many things, price is only one consideration when choosing the best boat insurance. Arguably, more complete coverage is a priority for many boat owners and may not be available at any price with discount insurers or insurers who do not specialize in boat insurance.
Speak with your agent and don’t be afraid to ask questions. One overlooked coverage detail can potentially cost you thousands.