Watercraft Insurance

What is 'Watercraft Insurance'

Insurance policies that provide coverage for boats and personal watercraft. Watercraft insurance, also known as boat and personal watercraft insurance, often include towing and wreckage removal, as well as fuel spill indemnification. This type of insurance may be purchased for sailboats, house boats, and pontoon boats, as well as other watercraft up to a certain size and value.

BREAKING DOWN 'Watercraft Insurance'

The coverage provided by watercraft insurance varies according to the type of watercraft being insured. This is because different types of watercrafts carry different risks. For example, a sailboat and a pontoon boat are characteristically different types of watercraft. Watercraft insurance does not provide liability coverage for injuries caused by the operation of the boat or watercraft.

In some cases, an individual’s homeowners’ policy may provide coverage for personal watercraft. If the watercraft is too expensive it may exceed the limits of the homeowners’ policy, but may fall under the limits of a watercraft insurance policy. These policies will still limit coverage to certain types of vehicles, often based on the length of the boat and the boat’s value.

Watercraft insurance policies may limit the areas that the boat or watercraft can be operated in while maintaining coverage. The geographic areas permitted are outlined in the policy language, but often include inland waterways, rivers, and lakes, as well as ocean waters within a certain number of miles from shore.

The amount of damage to a watercraft that is covered under the policy is also dependent on how the policy treats depreciation. In some cases, the boat or watercraft will have its value depreciated according to a set schedule, and the insurance policy will only pay up to the value that the boat is still worth. The policyholder may purchase additional coverage that provides for a replacement boat if the boat is within a certain number of years old.