You didn’t buy a cheap boat, so you probably shouldn’t try to protect it with cheap boat insurance. Whether it’s a cabin cruiser or a small fishing boat, it’s important to obtain adequate boat insurance in case the craft is damaged or stolen.
As you do your research on boat insurance, you will be looking at matching the coverage to the type of boat you own and, of course, how much it will cost you. Maybe you will conclude that you don’t need insurance for your boat. If that’s the case, you might want to look at the 2018 U.S. Coast Guard Boating Safety Statistics, published in 2019:
· There were over 2500 injuries in boating accidents
· There were another 633 boating fatalities
· Property damage totaled about $46 million.
· Alcohol was the leading factor in fatal boating accidents
If you’re a boat owner, these statistics should convince you that you need boat insurance, but you might still be wondering…
Do you have to have insurance on a boat?
Only three states–Arkansas, Hawaii, and Utah–require you to carry boat insurance. However, there are at least two situations in which you might be compelled to show proof of boat insurance:
- You want to finance your boat purchase
If you take out a loan to buy your boat, your bank could require you to carry boat insurance. Some policies may not require you to carry year-round coverage, but if you financed your boat, your lender will probably ask you to carry coverage even when the boat is stored since it could still be at risk for theft and storm damage.
- You’re planning to dock your boat at a marina
Many marinas will require you to show proof of insurance before signing a contract. Check the fine print before signing. Some marinas require docked boats to have liability insurance of at least $300,000. Others might require endorsements on the policies as “additional interest” or “additional insured” to avoid claims of negligence.
How much is boat insurance?
If you’re looking for a quick and general boat insurance calculator, the rule of thumb is that you’ll pay about 1.5 percent of the value of your boat in annual rates.
For example, insurance for your $20,000 boat would cost you about $300 per year, while that $100,000 motorboat would require a $1,500 annual premium.
Keep in mind that these figures only provide you with context since certain factors will affect the premium you’ll pay for watercraft insurance. Here are some of the most important variables:
- Safety record: no boating accidents means lower rates
- Your credit score and history
- Age of the boat: since many insurers will offer a better rate to insure a boat that has been owned by one person, it usually pays to keep an older boat
- The speed and length of the boat
- Additional safety equipment
- Discount for owning a house: if you own a home, you’ll probably get a lower boat insurance quote based on that asset
- Your payment choice: if you can pay the annual boat insurance premium in one lump sum, you’ll get a lower rate
There are additional discounts that individual insurers will offer. For instance, at some companies you can lower your insurance premiums by completing a boat education course.
What are some of the best boat insurance rates?
As mentioned earlier, the type of boat you are insuring and the area you’ll be storing and using it will factor into the rates you pay. States in which boats are used year-round or are prone to hurricanes—Florida, for instance—will have higher rates, while the cooler climates in the North will be less expensive.
The type of policy you choose will also determine the boat insurance cost
Finally, you will need to decide between two coverage options:
Agreed value refers to an amount agreed upon between the boat owner and the insurance company. This policy type will be more expensive since the depreciation of the boat is not considered.
Actual cash value comes with a lower premium because the insurance company will pay up to the actual market value for the boat, minus depreciation. The insurance company would pay you less with this type of coverage, so it tends