You’ve found the perfect boat, and now it’s time to think about insuring it. One of the first steps is understanding the insurance requirements in your state. Like cars, boats come in various styles, sizes, and prices. But unlike cars, most states don't require boat insurance. Let’s explore how jurisdictions, marinas, loans, and water sports can affect your insurance.
As mentioned above, the jurisdiction in which the boat is operated is important for insurance requirements. For example, while Alabama as a state does not require boat insurance, both Arkansas and Utah require boat liability coverage for vessels that exceed 50 horsepower. Liability insurance offers financial protection if the policyholder is held responsible for causing damages or injuries, such as colliding with another boat, injuring a passenger on your vessel, or damaging a dock. In Hawaii, liability insurance is required for boats measuring 26 feet or longer in length.
However, jurisdiction is not the only factor for boat insurance; the specific location where the boat is stored also impacts insurance requirements. For instance, some marinas require that a boat carry liability insurance. This ensures that both the marina and other boats are protected in the event a boat causes damage.
Beyond states and marinas, another factor influencing insurance requirements is whether the boat was bought outright. In other words, if the boat has a lien due to a monthly payment plan or if it is leased, the lender might require you to have a policy that includes comprehensive and collision coverage.
Comprehensive and collision coverage is an additional option that can be added to boat insurance, covering the cost, less the deductible, of damages to a boat in an insured event. Also known as marine hull insurance, hull insurance, and physical damage coverage, comprehensive boat coverage shields the boat against vandalism, theft, animal impacts, falling objects, and damage caused by hail, flood, fire, wind, and lightning.
Where you operate your boat influences your insurance beyond just jurisdiction. A key factor is whether you're boating on freshwater, saltwater, or both. Many Americans live in landlocked states or far from coastlines. If your boat is only used at your camp on a lake or large pond, your insurance needs will differ from someone boating in the open ocean. First, ocean-going boats usually cost more than lake boats, which means their replacement value is higher and likely increases your policy premium. Second, oceans are more vulnerable to storms, which can damage the boat as well. Therefore, make sure your policy matches your specific insurance needs to provide the right coverage.
While boating can be a fun and peaceful activity, it can also be dangerous. That’s why boat liability coverage exists to protect against damages or injuries. This is especially important if you engage in water sports like waterskiing, tubing, wakeboarding, and more, as many liability policies include coverage for participants. Medical payment coverage is also available, but it may not take effect until the injured person’s health insurance coverage limit is reached.
While fishing may not be considered as risky as other sports, it can involve a significant amount of equipment that can quickly add up in value if lost or damaged. Fortunately, some boat insurance provides coverage for these carry-on items, including scuba gear and other personal property.
Even if boat insurance isn't mandatory in your state, it's still worth considering for peace of mind. A variety of options exist, including uninsured or underinsured boater policies that cover medical payments if you or your passengers are injured by another boater with insufficient insurance. These policies only cover costs up to the limits specified in your policy.
When looking into boat insurance, carefully review your state’s requirements. Likewise, if you store your boat at a marina or have a loan on it, research the marina’s and lender’s insurance rules to choose a policy that at least meets the minimum standards. Before selecting a policy, consider how you plan to use your boat. For example, if you’re an avid wakeboarder or have expensive fishing gear, you should explore coverage options for those accessories.
Progressive Casualty Ins. Co. & Affiliates. Prices, products, and providers will vary if you shop online, by phone, by mobile device, or using an agent or broker. Coverage subject to policy terms and conditions. Not available in all states or situations.