What Is Boat Owners' Insurance?

Boat owners’ insurance provides coverage for individuals who own and operate a boat or personal watercraft. Insurance may be purchased for sailboats, houseboats, and others. The insurance policies are tailored depending on the type of watercraft being insured because different types of watercraft carry different risks.

Key Takeaways:

  • Boat owners’ insurance provides coverage for individuals who own and operate a boat or personal watercraft.
  • The insurance policies are tailored depending on the type of watercraft and the associated risk.
  • Some states require liability coverage on certain types of boats or boats used in state parks or kept in state-run marinas.

Understanding Boat Owners' Insurance

Boat owner’s insurance covers the boat and also the items needed to operate the boat safely, such as life vests, oars, and anchors. Boat owners can also purchase additional coverage for electronic equipment, such as televisions, GPS and radio equipment, and equipment commonly associated with boats, such as snorkels or SCUBA gear.

The coverage provided by watercraft insurance varies according to the type of watercraft being insured. This is because different types of watercraft carry different risks. For example, a small sailboat most likely does not carry the same risks as a multi-passenger larger pontoon boat.

A few states require liability coverage on certain types of boats, such as powerboats with more than 50 horsepower or boats used in state parks or kept in state-run marinas. Boat owners should check their local and state requirements.

There are medical riders that can be purchased separately for passengers, but these typically have thresholds of $10,000 per claim. Insurers are hesitant to offer these policies given the potential for increased fraud.

The Fine Print

The boat owner needs to know what questions to ask when investigating policies. For instance, many policies will not pay for the removal of a wrecked boat. The policy typically covers the cost of replacing the boat, but not the actual cost of towing or debris removal.

The Coast Guard no longer offers towing assistance if they determine there is no danger to lives or property. The cost of towing by a commercial marine towing service averages as high as $150 per hour, from the time the towing begins until the boat is brought to its dock or nearest port. Insurance seekers should check the fine print of the policy.

Special Considerations

A boating accident in Minnesota in 2018 brought awareness and possible changes to the limitations of boat insurance when it comes to personal liability. A passenger was maimed in a boating accident only to discover she was not covered by the boat owner’s policy. Unlike automobile liability insurance, where everyone in the vehicle is covered, boating insurance does not necessarily cover the passengers.

Furthermore, the growing popularity of a variety of new boat types, including paddleboards and kayaks, raises concerns about what kind of boats should carry boat owners’ insurance. Boat owners’ insurance does not usually cover kayaks, canoes, or personal watercraft (PWS).

Given the popularity of new types of watercraft and possible changes to liability coverage requirements, interested parties should stay abreast of the latest development regarding boat owners’ insurance policies.