Larger and faster boats such as yachts, and personal watercraft such as jet skis and wave runners require a separate boat insurance policy. The size, type and value of the craft and the water in which you use it factor into how much you will pay for insurance coverage.
For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings and permanently attached equipment as part of either an actual cash value policy or on an agreed amount value basis. These policies also provide broader liability protection than a homeowners policy. But there are distinct differences between the two types of policies.
Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.
Agreed Amount Value basis policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.
Physical damage exclusions might include normal wear and tear, damage from insects, mold, animals (such as sharks), zebra mussels, defective machinery or machinery damage.
Boat insurance also covers:
- Bodily injury—for injuries caused to another person
- Property damage—for damage caused to someone else’s property
- Guest passenger liability—for any legal expenses incurred by someone using the boat with the owner’s permission
- Medical payments—for injuries to the boat owner and other passengers
Most companies offer liability limits that start at $15,000 and can be increased to $300,000. Typical policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Higher limits may be available. Additional coverage can be purchased for trailers and other accessories. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.
Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.
Boat owners should also inquire about discounts for the following:
- Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
- Coast Guard approved fire extinguishers
- Ship-to-shore radios
- Two years of claims-free experience
- Multi-policies with the same insurer, such as a car, home or umbrella policy
- Safety education courses, such as those offered by the Coast Guard Auxiliary, U.S. Power Squadrons, or the American Red Cross.
More than 1,000 boats are stolen every month. If you are a boat owner, learn some easy and effective ways to protect your craft from theft.
Spokespersons: Robert Bryant, National Insurance Crime Bureau; Lt. Lee Polfray, Marine Investigator
There are thousands of recreational boating accidents per year. Contributing factors to these accidents include traveling too fast for water or weather conditions, driving under the influence of drugs or alcohol, failing to follow boating rules and regulations, carelessness and inexperience.
To prevent boating accidents, we offer these safety suggestions:
Care and protection of vessel
Check weather forecasts before heading out.
Let someone know where you’re going and when you expect to return.
Check engine, fuel, electrical and steering systems, especially for exhaust-system leaks.
Carry one or more fire extinguishers, matched to the size and type of boat. Keep them readily accessible and in condition for immediate use.
Equip the vessel with required navigation lights and with a whistle, horn or bell.
Consider additional safety devices, such as a paddle or oars, a first-aid kit, a supply of fresh water, a tool kit and spare parts, a flashlight, flares and a radio.
Care and protection of crew and guests
Make sure that every person on board the boat wears a life-jacket.
Know and obey marine traffic laws, the "Rules-of-the-Road." Learn various distress signals.
Keep an alert lookout for other watercraft, swimmers, floating debris and shallow waters.
Pay attention to loading. Don’t overload; distribute the load evenly; don’t stand up or shift weight suddenly in a small boat; and don’t permit riding on the bow, seatbacks or gunwales.
Don't operate a boat while under the influence of alcohol or drugs.
Skippers can obtain free advice and boating-safety courses from the U.S. Coast Guard Auxiliary. Upon request, the auxiliary will conduct a Courtesy Marine Examination (CME) on your boat, checking electrical and safety equipment and fuel hoses. Boats meeting safety standards are awarded the CME decal “Seal of Safety.”
More on personal watercraft (Sea Doos, Wave Runners) insurance:
Personal watercraft are not generally covered by homeowners or auto insurance, and where they are, the coverage limits can be fairly low. You may need to purchase a specifically designed policy in order to insure these vessels. The personal watercraft policy covers:
- Bodily injury
- Property damage
- Guest passenger liability
- Medical payments
Typical policies include deductibles of $250 for property damage, $500 for theft and $1,000 for medical payments, although these may vary from company to company.
Liability limits start at $15,000 and can be increased to $300,000. This coverage will provide financial protection if your personal watercraft is involved in an accident.
Most policies also include water sports liability, which covers risks associated with activities such as water-skiing.
Consider buying an umbrella policy which will provide more liability protection. One million dollars in extra coverage costs about $300 a year and would extend to your home and auto insurance policies.
If you have several personal watercraft, you may qualify for a multi-boat discount on your insurance. Additional coverage can also be purchased for trailers and other accessories.
Be sure to speak with your insurance agent or company representative about your specific needs.
Personal Watercraft Safety
Sea Doos, Wave Runners and other personal watercraft are fun and so easy to use that you can get a false sense of security; however, each year they cause thousands of serious injuries.
To safely enjoy your personal watercraft, the I.I.I. suggests the following:
- Never follow directly behind another personal watercraft. Stay at least 100 yards behind the vessel in front, and no less than 50 yards to one side. Because these vessels can travel at a very high rate of speed, each rider must be able to react to sudden changes in order to avoid a collision. Eighty percent of all injuries and fatalities occur when two vessels collide with one another.
- Don’t jump the wake of a passing boat. You could misjudge its speed and cause a collision. Or you might end up in the path of traffic coming from the other direction.
- Stay alert! Be aware of what is going on around you. Steer clear of other watercraft, swimmers, divers, water skiers and fishermen.