Boat Insurance: FAQs From New Boat Owners

If you own a car, you need to have car insurance. And if you own a boat, you need to have boat insurance. But while almost everyone drives a car, and therefore car insurance is a well-known and popular thing, not everyone owns a boat—so you probably know a bit less about boat insurance! The following are questions that new boat owners often have about insurance.

What does boat insurance cover?

Boat insurance covers basically the same items and risks for your boat that car insurance covers for your car. It covers liability, which will pay for damage that you cause to other boats or property when driving your boat. It also covers collision, which will pay for damage caused to your own boat during a collision with another boat. Comprehensive boat insurance covers damage caused to your boat when it is docked. For instance, if your boat is docked and a tree falls on it, the comprehensive portion of your insurance clause will pay for the damage. Boat insurance also covers medical expenses for you or anyone else who is injured on your boat or due to a collision with a boat.

How much can you insure your boat for?

Most companies will only insure your boat for the amount that you paid for it, even if the boat is technically worth more than that. For instance, if you get a great deal and pay $10,000 for a boat that should have cost $15,000, the insurance company will insure your boat for $10,000—that's the amount they will pay if your boat is totaled in a crash or other accident. 

Will your boat insurance cost more if you are not an experienced boater?

In short, the answer to this question is "yes." The less boating experience you have, the more risk the insurance company is taking in insuring you. (Less experienced boaters are more likely to get into accidents and end up having to file claims.) Generally, insurance companies measure boating experience by the amount of time you have had a boating license and have owned a boat. So if you just got your license and are insuring your first boat, you will pay more for insurance than if you have had your license for four years and have previously owned a different boat. Taking boater safety courses can sometimes help reduce your rate, since these courses help make you a better driver and therefore reduce your risk of an accident.

Is boat insurance required?

Boat insurance is legally required in Arkansas and Utah. However, it is still a very good idea to carry boat insurance in other states. And if you are docking your boat at a public marina, the marina will typically require that you carry insurance. Do not make the mistake of assuming your boat will be covered under your homeowners insurance policy. This is not the case. If you are out on the water and cause a crash, you will be personally liable for the thousands—perhaps hundreds of thousands—of dollars in damage you cause if you do not have a specific boat insurance policy. And that's a risk that very, very few people are prepared to take.

So once you buy your boat, start making some calls to insurance companies. Most auto insurance companies also offer boat insurance. Tell them whatever you can about the boat you've purchased, your boating experience, and where the boat will be kept. You can get quotes from a few different insurance companies to ensure you are getting the best rate possible for your policy. Contact a company like Veronica's Auto Insurance to learn more.