What Does Boat Insurance Cover?

There's nothing quite like a beautiful day out on the water, especially when you're the captain of your own ship … or boat, of any size.

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To make the most of your boating experiences without having to worry about unforeseen costs from whatever incidents life at sea (or lake) may bring, you might want to consider boat insurance. It's important to know what is and isn't covered by boat insurance.

Boat insurance is the type of insurance that is designed to protect you financially if you own a boat (or other watercraft) and ever get into a boating accident of any kind that could result in injuries to people or property. Boating insurance was created due to the close contact boats have with the elements, water, storms and other boats out on the water, along with their high monetary value.

What Does Boat Insurance Cover?

Boat insurance can cover you, your boat, other boats, other types of property and other people. Below are the main types of boat insurance coverage you're likely to find, along with more information about what each type covers.

Liability Coverage

Liability coverage basically covers any type of damage you and your boat could cause to another boat, people or someone else's property of any kind. It can also help cover legal fees in the event someone else should decide to sue you.

Property Coverage

Property coverage, or a physical damage policy, helps protect your boat itself if it's damaged in an accident or sometimes even if it's stolen. Typically, it provides financial protection whether your boat is damaged while on land or water. There are two main types of property coverage: agreed value coverage and actual cash value coverage.

• Agreed Value Coverage: With agreed value coverage, you'll pay for coverage up to an amount that you and your insurer agree upon at the time of your insurance purchase.
• Actual Cash Value Coverage: With actual cash value coverage, you'll receive a coverage amount based on the actual cash value at the time repairs may be needed, taking depreciation into account.

Medical Payments Coverage

Medical payments coverage can help pay for any injuries or health expenses you or any of your boat passengers may incur while on your boat.

Uninsured Watercraft Coverage

Uninsured watercraft coverage can help pay for expenses should someone else without boat insurance damage your boat, and this can help pay for expenses related to injuries anyone on your boat may incur as a result.

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Do You Need Boat Insurance If You Own a Boat?

You may not need boat insurance for every kind of boat because there are some types that may be covered under your homeowners insurance policy. However, this is often limited to an amount that doesn't exceed $1,000, which is much less than the value of most boats. Additionally, homeowners insurance often only covers a small, non-motorized boat when on your property and not when it's in the water.

Therefore, unless you're concerned about theft or accidents or you're running a business using any of these types of watercraft, you probably don't need boat insurance for kayaks, inexpensive canoes or stand-up paddle boards.

You do, however, likely need and want boat insurance if you own any of these types of boats:

• Motorized boats
• Water sports crafts of any kind, such as jet skis
• Sailboats
• Yachts

With these types of motorized or larger boats, boating insurance is necessary to cover any potential liabilities, such as damage or injury to others or others' property, including potential medical costs. Additionally, while boat insurance is usually not required by state laws (only Hawaii, Alaska and Utah require it in 2023), it's necessary to protect you and others and is often required by the marinas where most boats are stored.