Boat Insurance: Pros, Cons & Costs 2023

Estimated read time 7 min read

Boat insurance is a type of insurance coverage that protects boat owners against financial losses resulting from accidents, theft, damage, and other types of losses. This type of insurance is similar to auto insurance but is specifically designed for boats and other watercraft.

Some common types of coverage offered by boat insurance policies include liability coverage, which provides protection for damages or injuries that you cause to others while operating your boat, and comprehensive coverage, which provides protection for damages to your boat resulting from non-collision events, such as theft, fire, or severe weather.

Other coverage options may include protection for personal items on the boat, protection for towing and assistance, and protection for additional expenses, such as temporary housing or transportation if your boat is damaged and you are unable to use it.

The cost of boat insurance can vary depending on factors such as the type of boat, its size, its value, and the amount of coverage you choose. 

It’s important to work with an insurance agent who specializes in boat insurance to help you determine the right coverage options for your specific needs and budget.

It’s important to have boat insurance in place to help protect you against financial losses in the event of an accident or other loss. 

By having the right coverage in place, you can enjoy peace of mind and the freedom to enjoy your time on the water with confidence.

Types of Boat Insurance

Boat insurance can be broadly categorized into the following types:

Liability coverage – covers damages to third parties or their property.

Hull coverage – covers damages to the boat itself.

Protection and Indemnity (P&I) insurance – covers the liability of the boat owner for injury to passengers or other third parties.

Uninsured boater coverage – covers damages caused by uninsured boaters.

Medical payments coverage – covers medical expenses for injuries sustained while on the boat.

Personal effects coverage – covers personal belongings on the boat.

On-water towing and assistance coverage – covers costs for towing or assistance if the boat becomes disabled.

Trailer coverage – covers damages to the boat trailer.

It is important to assess the specific coverage needs of the boat and its owner and purchase insurance accordingly.

Advantages of Boat Insurance


Boat insurance provides several benefits and advantages, including:

Financial protection – In case of damage, theft, or loss, boat insurance can help cover the cost of repairs or replacement.

Liability coverage – Protects boat owners from financial responsibility in case of accidents involving other boats or people.

Peace of mind – Knowing that your boat is protected can give you peace of mind while you enjoy your time on the water.

Required by law – In some states, boat insurance is a legal requirement, and failure to carry insurance can result in fines or legal action.

Customizable coverage – Boat insurance policies can be customized to meet specific coverage needs and budget constraints.

Protection for personal items – Coverage for personal items on the boat, such as electronics and fishing gear, is often included in boat insurance policies.

Towing and assistance – Some policies include on-water towing and assistance coverage, which can be valuable in case of an emergency.

Cost savings – Having boat insurance can help avoid the high costs of repairs or replacement in case of damage, theft, or loss.

Overall, it is an important investment for boat owners, providing financial protection, peace of mind, and a range of other benefits.

Disadvantages of Boat Insurance


Boat insurance has some disadvantages, including:

Cost – Boat insurance can be expensive, particularly for larger or high-value boats, and may not fit into everyone’s budget.

Exclusions – Boat insurance policies may have exclusions for certain types of damage, such as normal wear and tear or damage from natural disasters.

Deductibles – Most boat insurance policies come with deductibles, which means the policyholder is responsible for paying a portion of the repair or replacement costs.

Limited coverage for older boats – Older boats may have limited coverage options and higher premiums, making insurance less attractive for owners of older boats.

Claims process – The claims process for boat insurance can be time-consuming and complicated, and policyholders may need to provide documentation and other information to support their claims.

Limited options in some areas – In some locations, boat insurance options may be limited, and policyholders may have to settle for coverage that doesn’t meet their specific needs.

Exclusions for high-risk activities – High-risk activities, such as racing or commercial use, may not be covered by standard boat insurance policies, and policyholders may need to purchase additional coverage.

Overall, while boat insurance provides valuable protection, it is important to weigh the advantages and disadvantages before making a decision on whether to purchase insurance and what type of coverage to buy.

Cost Factors

The cost of boat insurance is determined by a number of factors. In general, larger, faster boats will cost more to insure than smaller, slower boats. Other considerations include:

  • The vessel’s age
  • The boat’s monetary worth
  • The vessel’s condition
  • If you live on board,
  • Whether the boat is powered by an inboard or outboard motor
  • How is the boat used? (fishing, cruising, utility, etc.)
  • Where is the boat used? (rivers, bays, lakes, ocean, etc.)
  • If you qualify for available discounts, you may be able to help reduce the cost of your boat insurance. Many companies provide discounts to boat owners who have a boating license or who store their boats under a covered structure such as a shed.

You may also be eligible for a discount if your boat is inspected by the Coast Guard Auxiliary. Taking advantage of all available discounts will help you get the best deal on an insurance policy.

Average Cost of Boat Insurance


The average cost of boat insurance varies depending on several factors, including:

Type of boat – The size, make, and model of the boat can affect the cost of insurance. Larger or more expensive boats typically have higher insurance premiums.

Location – The location where the boat is used and stored can also impact the cost of insurance. For example, boats in areas with high theft rates or harsh weather conditions may have higher insurance costs.

Usage – The frequency and type of use of the boat can also affect the cost of insurance. For example, boats used for recreational purposes may have lower insurance costs than boats used for commercial purposes.

Coverage level – The amount and type of coverage selected can also impact the cost of insurance. More comprehensive coverage options typically come with higher insurance premiums.

It is difficult to estimate the average cost of boat insurance, as it can vary greatly depending on the factors mentioned above. On average, boat insurance can cost anywhere from a few hundred dollars per year for a small recreational boat to several thousand dollars per year for a larger or more valuable boat.


It is important to shop around for boat insurance and compare quotes from multiple insurance providers to find the best coverage for your needs at a cost that fits your budget.

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