Boat Insurance: Definition & Types

June 1, 2022

Boat insurance is intended to safeguard the vessel and its commuters from accidents and other unexpected events. The policies may differ depending on the specific power limit and the boat class. Most of them guarantee year-round coverage and typically shield the craft from acts of vandalism, theft, fire, and storm throughout the off-season.

Boat insurance does not cover any replacements or repairs resulting from mechanical wear. The cost depends on the type of the craft, its age, current value, length, power, cruising area, the owner’s boating background, training, and certification.

Guaranteeing boat security is what any owner strives to do. And while you might be worried about all the insurance-related peculiarities, most owners choose to separate their policies and consider all the factors when picking the best vessel coverage. And it is no secret you can make an informed decision only through considering them and consulting with your insurer.

Naturally, risk management can be tricky due to specific marine threats like pollution or wreck removal. In particular, only a few insurance companies completely cover the expenses for quick wreck removal. Other insurance companies do not cover it whatsoever.

But you need to bear in mind that if the accident takes place and the debris gets in the way of other vessels, it can cause harm to them. And in this case, the liability can be enormous.

Almost any policy can cover a small ship or motor with a specific power limit. However, you should always consider the possible damage to a sailboat or motors since they are the main driving force of the craft.

For some mariners, homeowners insurance can help with inland navigation through a lake or a river. But this coverage might not extend beyond the beach area, bay waters, or rivers. In other words, you might not be covered if you are sailing outside of it, i. e. out in the sea.

That is one of the fundamental reasons to look for reasonable marine direct insurance offers. And while it might not guarantee only cheap insurance alternatives, direct insurance will help you understand all the distinctive features and attributes.

Things To Consider

Boating has a lot to do with the feeling of a thrill, even if there is a chance to be caught in a storm. So despite it, possible damage, and all the contributing factors, boating enthusiasts keep choosing this activity. For instance, around 11.88 million crafts were registered in 2019 in the U.S. alone.

But no matter the reason – recreational or otherwise – you need to safeguard your crew and remember the liabilities. Whether you are into fishing or sailing for fun, you need coverage designed for you.

There is a tailored option called protection and indemnity insurance for marine industry workers. It can come in handy when dealing with numerous liabilities associated with the regular operation, harbor labor, cargo transit, and possible environmental harm.

Naturally, you can ensure any craft for a specific price, and your insurer can help you with that. It might be high, but it should also meet your needs. Here is what you need to consider when taking out insurance:

  • Age Of The Craft
  • Its value
  • Boat length
  • Its power
  • The hurricane haul-out coverage. If you get into the hurricane zone, it can be hazardous. Many carriers require active storm plans and hauling if your craft is located in one of the listed hurricane zones.
  • Condition of the watercraft and whether it meets the U.S. Coast Guard requirements and its standards
  • The type of the craft (cruiser, performance, utility, speed boat, etc.)
  • Type of ownership
  • Its operation area, also known as cruising area (lakes, bays, oceans, etc.)
  • Your boating history
  • Your training and certification

What Do The Policies Cover?

Most policies cover permanently fixed equipment like anchors, cushions, life jackets, or oars. Suppose it is crucial to discuss the coverage peculiarities with your insurance provider for any of these. If you are in the marine industry, you need to cover your land-based workers under the Longshore and Harbor Workers Act. It can come in handy if the harbor workers get injured while aboard. Liability is typically included in any watercraft insurance since there is always a chance of an accident like bodily harm or property damage. As for the medical expenses, you can take care of any passenger if you wish to do that. You can take out a medical payment option to help foot the bills of an injured watercraft passenger.

What Are The Different Types Of Boat Insurance?

Typically, you can take out two types of watercraft insurance – the boat’s greed value and actual value. The totaled costs often depend on the value of the insurance writing.

Is There A Variety Of Coverages?

The coverages differ depending on the variety of insurance components and considerations. For instance, one of the underlying determinants can be the type of the craft: PWC, Rental, Yacht, Dinghy (used to go from your watercraft to the shore and back), Professional craft.

What Is the Right Insurance Level For My Boat?

Naturally, any sailor wishes to have all-risk insurance that can cover any loss, wearing, deterioration, or scratching, for that matter. And while it might not be possible to cover all the reasons for scratchings and their implications or animal damage, you can find the right insurance if you understand your needs.

Victoria Berezhetska

Victoria Berezhetska is a Content Lead at and an expert contributor to CoverExplore. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At CoverExplore, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.

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