Boat Insurance: What It Costs and Why You Need It

Boat Insurance

Boat insurance is a contract between boat owners and insurance carriers that protects the boat owners from any financial losses if there is an accident or a natural disaster that causes damage to the boat.

However, boat insurances have restrictions on what they can cover and what they cannot cover. Boat insurance is only meant for vessels with a motor and not canoes or even small paddle boats.

How does Boat Insurance Work?

Boat insurance is similar to car insurance. However, boat insurance only covers the financial losses of large boats and not automobiles. Boat owners pay some fees every month for the boat coverage, and therefore, in case of financial losses or damages related to your boat, they can claim with the boat insurance providers.

When the boat insurance providers receive the claims, they investigate the claims, determine the extent of the accidents, the damages caused, and how much the boat owner can receive damages and losses caused. When the investigation is complete, the boat insurance provider sends a check for the coverage amount that one is entitled to, depending on the submitted claim.

Types of boat insurance policies

There are three types of boat insurance policies that a boat owner can choose depending on the policy that meets their needs. The two main types of boat insurance policies include agreed hull value and actual cash value.

Agreed Hull Value Boat Insurance

This is a type of insurance policy for boat owners where the boat owners and the insurance providers agree on the value that the boat owners should be paid in case of a total loss or anything happens on your boat. In simple words, boat owners are always aware of the value they are likely to get from the insurance providers in case of an accident or damage to their boat. This makes it the most common type of boat insurance policy since most boaters select this policy.

Boat owners should know that this type of boat insurance policy does not cover all accidents or repairs. Therefore, boat owners need to verify with their insurance providers before they file any claims. The following are some of the benefits that make this boat insurance different;

  • Pre-arranged boat value
  • Total value given to the boat owner when the claim has been approved
  • It is more expensive, but it covers mire
  • Its application and appraisal process is very easy

Actual Cash Value Boat Insurance

Actual cash value boat insurance is somehow different from the agreed value boat insurance policy. This is because, unlike the agreed value boat insurance, which pays an agreed amount of money for the damages and losses caused, this type of boat insurance policy pays up to a certain value for the damages and losses the boat owner experiences.

Also, the boat insurance factors depreciation, wear, tear, and damage. Therefore, anyone who selects this boat insurance policy can get a value less than one who selects an agreed value boat insurance policy for the same type of damages or losses. However, it has several benefits that make boat owners select it, which include,

  • It is more affordable, unlike the agreed value boat insurance policy, which is expensive
  • Its claim process is easier
  • It has a simple appraisal and application process

How Much Does the Insurance Cost?

Many people do not know the amount of money that the boat insurance costs them, while some think that the bat insurance cost is constant for all the boat owners. However, this is not the case.

Boat insurance costs vary, and therefore, there are boat owners who will spend more on the boat insurance while others will pay less for the same.

Boat insurance costs range between $300 to $600 in a year, but many factors will determine the costs you pay for boat insurance.

What Factors Determine the Average Boat Insurance Costs?

There are a lot of factors that will determine the costs of boat insurance. You have to ensure that you look at all these factors before you select any boat insurance policy. Also, considering these factors will help you to lower the costs of your boat insurance. The following are some of the factors that affect the average boat insurance costs.

Type of boat

On average, boat insurance may range from $300 to $ 600 in a year, but several factors can make this cost lower or higher. The type of boat you own is among the factors that may determine the boat insurance costs you will incur in a given year. For this reason, there are different charges for boat owners who have fishing boats, sailboats, speedboats, yachts, or any other type of vessel.

Apart from the type of boat you own, the boat’s features are another factor that will determine the cost of your boat insurance. Therefore, the length and bulk of a boat also affect the boat insurance costs that one incurs. Boat owners who have high horsepower boats pay for more in their boat insurance than the boat owners who have low horse powerboats. Also, the more expensive your boat costs, the more value you pay for your boat insurance.

Your Region or State

The region of the state where you are boating also determines the rates for your boat insurance. There are regions where the rates are higher, while others are lower.

The Boat Insurance Provider

When you select your boat insurance provider, you will find out that they have different rates for the boat insurance policy they offer. A provider with a very high number of clients and who desire to help the clients will charge less for their boat insurance, unlike the boat insurance providers who want to make a profit and have a lower number of clients.

Type of Boat Insurance Policy

Like the boat insurance providers you select, the type of boat insurance policy you select determines the boat insurance costs you incur. This is why there is a difference between the boat owners who select the agreed value boat insurance policy and those that elect the actual value boat insurance policy. Some will pay more, while others will pay less depending on the boat insurance policy one selects.

Storage Location of Your Boat

Wherever you store your boat is another factor that will determine your boat insurance rates. For instance, some people store their boats in the sheds while others store their boats on the docks. If you store your boat in a shed, you are likely to have lower insurance rates than the boat owners who store their boats on the dock.

Your Navigation Area

Every person who has a boat has a choice for their navigation areas. Some want to take their boats far from the shore, while others want to spend time near the shore. Therefore, if you plan to take your boat nearby, you are likely to have lower rates, unlike someone who takes their boats in the open ocean.

Also, if you are boating in an area with exposure to the coast, you are considered boating in risky areas, and therefore, your rates for boat insurance are higher. However, boaters in low-risk areas have lower boat insurance rates.

Driving Record

If you have been operating boats safely for a long time and drive responsibly, you get better rates since you are not likely to cause risks on your boat.

Age of the Boat

The age of the boat directly affects the rates of boat insurance. This is why boaters who have new boats are charged more for the boat insurance they get than the boat owners who have old boats. This is why most people will want to maintain their boats rather than replace the boat since this will translate to higher amounts of boat insurance costs.

What Does Boat Insurance Cover?

Boat insurance policies are very different, so they cover different types of damages and losses. The following are some of the things that boat insurance policies will cover.

Physical Damage

If any risks like fire, theft, storms, sinking, and collision, the boat insurance policy you select is entitled to cover these physical damages. The boat insurance covers may be different, but the policy mainly covers the hull, motors, batteries, anchors, onboard safety equipment, and extra fuel tanks.

Liability Coverage

When there is an accident on the boat, there may be injuries to the people in the boat, docks, other boats, and structure. The liability coverage is meant to cover such liabilities.

Medical Coverage

The medical coverage is to cater to the medical expenses for injured people during an accident you are involved in.

Personal Effects

The best boat insurance policy covers more than replacement or repairs. Therefore, if your personal property gets damaged or lost as you boat, the boat insurance policy is supposed to cover the personal effects required to be repaired or replaced.

It is also important to know the type of things that the insurance coverage does not cover. This is to ensure that you do not raise a claim to your boat insurance provider in case of the following things;

  • Tear and wear of the boat
  • Damages caused by marine life
  • Accidents due to faulty machine
  • Breaking of the accessories
  • Damages during a boat race
  • Accidents or losses when an unnamed operator is using the boat
  • Losses and damages that result from poor storage

Every boat owner needs to ensure that they have boat insurance. You can never know the importance of boat insurance unless you experience losses and damages and no one is there to cover the losses. Now that you know more about the boat insurance policies and their costs, it is time for you to select the best insurance providers and pay for the services you need.

Chris Blackwell Avatar
About Chris Blackwell

Chris is an avid angler and boating enthusiast. Raised on a small lake he spent most of his youth fishing in Jon Boats and water skiing behind Fiberglass boats. Chris enjoys taking his family out on the water so they can relive the fun he has always had.

This article may contain affiliate links which I earn a commision through when you purchase. As an Amazon Associate I earn from qualifying purchases.

Please read why I do this and my commitment to accurate and compelling content.