Buying a boat is one of life's major acquisitions. Depending upon what you get, your new watercraft can cost as much, or more than, a home.

So once you've plunked down your hard-earned cash, it is absolutely necessary that you protect that investment with the right kind of insurance.

Do Your Homework

Whether you're a novice or experienced watercraft owner, boating insurance works much like auto and homeowners insurance: There are policies that provide basic coverages that you then customize to meet your needs.

The basic coverages you need in a water craft insurance policy are:

  • Liability to others, including loss of life, personal injury and damage to the property of others for which the owners may be held legally liable.
  • Medical payments for you, your family or guests who may be injured while boarding, leaving or aboard your boat.
  • Damages to your craft and related equipment.
  • Medical expenses for towed water-skiers.
  • Wreck removal.

Keep in mind that the above is the minimum recommended coverage. Be aware of other hazards, which can help you avoid costly mistakes. Insurance options you need to look at include:

  • Damage in hauling or launching.
  • Loss of motor overboard.
  • Fire, lightening, explosion.
  • Sinking and stranding.
  • Underwater damage.
  • Theft.

Figuring the Premium

Much like insurance for your automobile, you are judged on a variety of criteria when your quote for watercraft insurance is being calculated.

Insurers will judge you on:

  • Experience on the water.
  • Navigational waterways: where you'll be operating your craft; rivers versus lakes versus oceans.
  • Onboard navigational equipment.
  • Previous insurance claims.
  • Value of the craft.
  • Style of the craft.
  • Age of the craft.
  • Your automobile driving record will also be a factor.

Do You Have Enough Insurance?

It's important to make sure that your policy covers injuries, theft or damages to your craft. If you're insuring your craft through your homeowners insurance policy, keep in mind that you'll typically only have limited coverage? $1,000 or 10 percent of property coverage? for theft and physical damages to your boat, its equipment, accessories, outboard motor or trailer.

Important Note: Even if you do get your watercraft covered through your homeowners policy holder, that policy may not extend to your boating activities depending on the size of your boat and the type of engine. If, in reality, you have a high-performance power boat and your insurance agent thinks his company is insuring a fishing vessel, you'll likely be straight out of luck if you have an accident or claim.

Getting Your Vessel Insured

Fishing Boats and Pleasure Crafts, Including Sailboats and Catamarans:

Ask your agent about an "endorsement" to your homeowners policy or a "package" policy to cover your vessel. An endorsement is a written form attached to the policy that alters its coverage, terms or conditions to fit your boating insurance needs.

Package policies often include property damage, medical bills and liability to others. (Note: Package policies vary from company to company, so check with an experienced marine insurance agent or representative to ensure you have enough coverage.)

You may want to consider purchasing additional coverage for damage to the hull and for accidents with uninsured boaters.


If you own a large boat, consider purchasing a yacht policy to protect against damage to the boat. An additional type of coverage you may want to consider is "all risk" hull insurance.

With most companies, this type of insurance covers physical damage or loss to the boat as well as its machinery, furniture, navigational equipment and all miscellaneous gear essential to and used for the boat's operation and maintenance.

High Performance Powerboats:

When looking for high-performance boat insurance? for vessels that run 50 mph or more? make sure that you get an insurance policy specifically created for this type of vessel.

Pay particular attention to your policy when it comes to Actual Cash Value (ACV) versus Agreed Value Policy (AVP) value! The former means your insurance company will determine what they think is the fair value of your boat at the time of claim. If you don't agree, well then you can fight with them over it.

What you want is AVP. This means you and your insurance company agree at the very beginning of the policy period what your boat is worth. In the event of a total loss they pay the agreed amount without a subtraction for depreciation, subject to certain policy provisions.

Check into named operator clauses. Most high-performance policies require that you name any and all operators who would drive your boat when you are not onboard. Be sure you have everyone who may take your boat out listed on the policy (insured mechanics excluded). If someone operates your boat without you onboard and there is an incident, there may be no coverage.

Personal WaterCraft:

Criteria for insuring a PWC is virtually the same as insuring a boat, but there is also some legislation to consider. For example, in some states, you are required to take boating safety classes before insurance will be granted.

Considered a Class A boat by the U.S. Coast Guard, it used to be easy to classify personal watercraft, but now Jet Skis and Wave Runner-type vessels come in many sizes, some of which easily accommodate four people.

In addition, many PWC can pull a skier. Water jet-pump-driven boats that are less than 13 feet in length are considered to be personal watercraft.

Extra Tips for All Watercraft

Ask your insurance agent or company about any available discounts. Some insurance companies give discounts (5 to 15 percent) to boaters who have attended a recognized safety education course, such as those offered by the U.S. Coast Guard, U.S. Power Squadrons, American Red Cross and others.

Discounts (5 to 10 percent) are also available for diesel powered boats equipped with safety equipment such as a fire extinguisher and ship-to-shore radios. You may also get discounts if you have not filed a claim for two years and if you buy all you insurance with the same insurer.