Boat Insurance Cost Factors
Many factors are used to set the cost of a policy, and they vary among insurers. Here are some items to consider:
- Cruising Area: Where you boat.
- Boating Safety Education: If you have been formally trained or certified.
- Good Driving Records: Both boating and driving.
- Liability Limits: The higher the limit the higher the cost.
- Deductible: The higher the deductible the lower the premium.
- Towing insurance requirements for offshore fishing .
Best For Emergency Services Coverage: State Farm
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- Coverage Limit: Varies
State Farm is a well-known insurance provider that offers additional coverages including emergency services reimbursement.
Coverage for houseboats and jet-skis
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In business since 1922, State Farm is one of the best-known names in insurance in the United States. They offer boat liability and property damage insurance for common risks like storms, collision, theft, and more, with add-on coverage options available . Their property damage coverage extends protection not only to equipment permanently attached to your boat but also to accessories such as detachable canopies, life preservers, and seat cushions. State Farm has resources available for boat owners including articles on boat trailer safety tips, boat safety, and water safety. Boat insurance is available for a multitude of watercraft: runabout/sport boats, cruisers/yachts, sailboats, bass boats, jet skis, houseboats, and kayak/canoes.
What Does Boat Insurance Typically Cover
Boat insurance coverage will depend on what type of boat you have, what insurance provider you use, and what coverage youre willing to pay for. General boat insurance typically covers physical damage to your boat, as long as none of the restrictions of the policy were violated, and liability coverage for damage to other property caused by you while operating your boat. You can add additional coverage types, such as medical payment for injuries you sustain while on the boat.
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Do I Really Need Boat Insurance
That depends on your boat. A standard homeowners insurance policy will generally cover small, inexpensive watercraft like:
- Jon boats
- Paddle boats
- Boats with low-powered engines
You can also add a liability rider to your homeowners insurance to cover property damage or injuries if you get in an accident with another boater.
But homeowners policies wont cover big, powerful boats. Youll need boat insurance for:
- Charter Boats Since your boat is your business, you may also need commercial insurance.
- Fishing Boats including bass boats, fancy offshore rigs and everything in between
- Houseboats Just like insuring a regular house, you need to insure your home on the water too.
- Personal Watercraft Watercraft like jet skis are super fun, but theyre also riskyhence the insurance.
- Pontoons Pontoons are where the partys at! So make sure your boat and your passengers are protected.
- Sailboats Activities like long distance travel, racing or historical reenactments require special coverage. Think of sailboats as the classic cars of the sea.
- Speedboats Fast boats are at higher risk for accidentswhich makes insurance a must.
- Yachts Luxury vessels need insurance because theyre more valuable and travel farther than most other boats.
All these boats need insurance even if it isnt required by state law. Why? Because if youre uninsured, a boating accident can ruin your futurein more ways than one.
What Does Boat Insurance Cover
Boat insurance contains coverage types to help in different situations, much like car insurance:
Property coverage. This protects the boat against theft and damage due to an accident or sinking. This coverage usually applies to the boat whether its on land or water.
You may get a choice of actual cash value or replacement cost coverage in the event your boat is totaled or stolen:
- With actual cash value coverage, if your boat is totaled your insurance claim will reflect the value of the boat at the time of the incident.
- Replacement cost coverage doesnt factor in depreciation. It will reimburse you for the amount of money it would take to repair your boat back to the same condition before the accident or replace it with the same or similar boat model.
Liability coverage. If your boat damages someone elses property, such as another boat, or injures someone during an accident, liability coverage pays their damages. It may also cover problems caused by your watercraft, such as a large wake. Liability insurance also covers your legal fees if youre sued over a problem covered by the policy, such as a boating accident.
Medical payments coverage. If you or your passengers are injured in a boating accident, medical payments coverage pays for your medical bills.
Uninsured watercraft coverage. If an uninsured boater strikes your boat, uninsured watercraft coverage pays your medical bills.
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Types Of Boat Insurance Coverage
This will depend on the type of policy, but common coverage add-ons include:
- Specialized Coverage: Coverage for something specific on your boat like an expensive prop or navigation equipment.
- Salvage: Coverage that pays to remove your boat due to damage, from substantial to minor.
- Consequential Damage: Covers a loss that was the result wear and tear rather than an accident .
- Towing: Towing your boat across a body of water to safety can cost $400 per hour.
- Cruising Extension: You can get temporary, additional coverage if you plan on leaving the USA .
How Much Is Boat Insurance
The average cost of boat insurance is $200 to $500 a yearalthough for a really big or expensive boat , insurance can cost around 15% of the boats value. For example, you may pay about $2,500 a year to insure a $100,000 yacht.
But just like other insurance rates vary, boat insurance costs change depending on you and your boat.
Do I Need Boat Insurance
Some states require boat insurance. Also, if you dock your boat or finance it, the marina or lender will probably require coverage.
But even if your state doesnt require it, consider the implications of going without boat insurance. If you get into an accident, youll be on the hook for your own repairs and your liability to others. With the average boat insurance claim hovering around $11,000, according to The Hanover Insurance Group, not having coverage could put you in a sticky financial situation.
The type of insurance you need will depend on the vessels size, type and value:
Small boats. Standard homeowners or renters insurance policies often cover smaller boats like canoes or small sailboats, but usually have limited property damage coverage. While a homeowners insurance policy typically provides coverage for the small boat, motor and trailer, it excludes liability insurance. But its possible to add boat liability coverage to your home insurance policy for an additional charge.
Larger boats. If you have a larger and faster vessel like a yacht, you will need to purchase a boat insurance policy. Depending on the boat accessories you have, you may need additional insurance such as trailer coverage.
Also, to increase your liability coverage limits, consider umbrella insurance. It provides extra liability protection for your auto, home and boat, such as extra insurance in case youre sued for a costly boating accident.
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Factors That Impact Boat Insurance Premiums
Some elements that will affect the cost of your boat insurance policy include:
- Value of the boat
- Extra coverages
Value of the boat
Like a car, the value of your boat is determined by several factors. The age and size of your watercraft, any extra features, and even your geographical location all contribute to the value of your boat. The value of your boat is the number one factor in determining your insurance premium.
The horsepower of your boat will also play a significant role in arriving at your premium amount. The higher the horsepower, the more expensive the premium.
Insurance companies consider your auto driving record when purchasing boat insurance. This factor doesnt significantly impact your boat insurance rates, however.
Age of the drivers
With boat insurance, you must list anyone who will regularly be driving your watercraft on your policy. This includes minors.
The insurance company will consider the age of the drivers who will regularly be behind your boats wheel.
Your insurance premium will reflect the amount that you use your watercraft. Heavier usage may increase your premium amounts.
If you will be living on your boat, boat insurance would not adequately cover you. You would need to purchase a separate policy to cover your insurance needs.
How We Chose The Best Boat Insurance Providers
When selecting the best boat insurance providers, we compared policies and discounts for more than 20 nationally recognized insurance companies that offer boat policies. We also looked at each companys financial strength, customer satisfaction ratings, and reviews. We feel confident that our evaluations provide a useful guide to help you select a boat insurance company, but we always encourage you to shop around and compare quotes before signing on the dotted line for any insurance policy.
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Typical Boat Insurances Cost Examples
As we will see in a second, many factors go into boat insurance, so absolutely knowing the costs ahead of time isnt possible.
However, you can estimate annual costs based on 1.5% of the boats value.
So a $100,000.00 boat should have an annual insurance cost of $1,500.00. Individual factors will come into play, but, in general, the 1.5% rule is reasonably accurate for estimation.
However, here are a few basic examples I found from other boaters around the web:
2003 Scout 242 Abaco with a 225 HP Yamaha motor in Northern California. Hull value of $70,000.00. The owner has full coverage and is paying $658.00 a year for insurance.
1963 Bertram 25 with two 135 HP motors on Orange Beach, Alabama. The value is $55,000.00, and the owner is paying $583.00 annually.
2008 MayCraft 2000cc with a replacement value of $26,000.00. The boat is located in Delaware, and the owner is paying $348.00 a year.
Is Boat Insurance Expensive
As is the case with almost anything you purchase, the more research and price comparison you doâthe higher likelihood that you will find the boat insurance quote that is right for you. Here are some tips to ensure that you are getting your moneyâs worth and keeping your costs down:
- Only buy what you need: There are lots of options out there for marine insurance and many of these policies are custom-written. Ensure that you know what you need so you can avoid paying for features that you donât require.
- Agreed value vs. Cash value: In an agreed value policy, you are paid a pre-determined value for the vessel in the event of a total covered loss. With agreed value, the insured and insurer agree on the value of the boat upfront. Most agents would recommend this option for a new or late-model boat. As the boat continues to age, look to potentially switch to a cash value option to save on premiums.
- Take a boater safety course: Almost all insurers offer a discount for boaters that have recently completed an approved boater safety course. Take an in-person class or get your boat safety certification online. Check with your insurance agent to see if a discount is offered for your specific policy.
- Spend on safety gear: Insurance companies may cut you an additional discount for having extra safety features onboard your vessel. Check with your insurance agent to see if you qualify for any additional savings.
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Boat Insurance Basics: What’s Covered
Learn about boat owners insurance and what the coverage means to you.
Did you know that boat insurance is one of the earliest known forms of insurance? Ancient sailors knew firsthand about the risks of a life at sea and sought to insure their boats against hurricanes and other unpredictable weather and waters. And it still applies today.
Boat insurance policies can vary widely in what they do and do not cover based on a number of considerations, including the type of boat, the waters it will traffic, and how many months of the year the boat will be used. Still, there are a few basic kinds of coverage you can expect to receive, as well as some potential discounts for safe boaters.
The Size Of The Engine
A boats engine size will also dictate how much insurance is needed to cover the boat. Larger engines cost more to maintain, repair, and replace.
If your boat has multiple engines, this will incur more insurance costs.
When a boat with multiple engines is destroyed, all of the engines need to be replaced. Insurance companies will take this into account when they write up their policy.
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Is Boat Insurance Required
Boat insurance is only required in three states , but some marinas require you to have liability coverage to store your boat. Also, if youre financing your watercraft with a loan, the lender typically requires you to have boat insurance to protect the investment in case of disaster. A lender will usually want you to cover your boat for its full value.
If you live in one of the states that require boat insurance, it works in the same way as car insurance in that the state expects you to have liability coverage to safeguard against damage you may cause to others . How much liability protection you may need on your boat varies, but youll have to have at least the state-mandated minimum amount.
With an investment as large and valuable as a boat, it seems like common sense to protect it from things out of your control. Even if coverage isnt required, insurance for your boat is a wise move.
Do You Need Boat Insurance
Your home insurance policy covers your boat in some cases, but it doesnt go far. Homeowners policies typically cap boat coverage at $1,000 or 10% of your homes insured value. And liability coverage which pays for damage your boat does to others typically isnt included under home insurance. So a home insurance policy might help you only if your boat is small, slow and inexpensive.
At a glance: Do I need boat insurance?
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Boat Insurance Costs And Discounts
How much youll pay for boat insurance depends on the level of insurance coverage you want, as well as the size, horsepower, type and value of your boat.
You can choose your deductible, which is the amount deducted from your insurance check if you make a claim. A typical policy has deductibles of $250 for property damage, $500 for theft and $1,000 for medical payments, according to the Insurance Information Institute. Liability claims against you do not have a deductible.
Insurance companies offer a variety of ways to save money, including discounts for:
- Having a diesel-powered boat.
- Not having made a previous boat insurance claim.
- Carrying other policies, such as car or homeowners, with the same insurer.
- Taking safety courses.
Average Boat Prices: 15 Helpful Examples
All boats are different, so average boat prices can be hard to define. Ill do my best to demonstrate all of your options and the prices associated with them!
The number of different boat categories seems to be never-ending, and the differences between different categories can often be very subtle.
Here are some of the larger categories that youre likely to encounter when searching for a boat:
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Types Of Boat Insurance
There are two basic types of boat insuranceagreed value and actual cash value. How depreciation is handled is what sets them apart.
An “agreed value” policy covers the boat based on its value when the policy was written. While it can cost more up front, there is no depreciation for a total loss of the boat .
“Actual cash value” policies cost less up front, but factor in depreciation. In other word, the policy will only pay up to the actual cash value of the boat at the time it is declared a total or partial loss. Eventually, as your boat ages, your insurer will likely insist on an actual cash value policyand if often gives a substantial savings.
Liveaboard Insurance Cost Considerations
What contributes to the cost of liveaboard sailboat insurance? Purchasing insurance for a sailboat is a lot like buying car insurance, except it’s likely to be a lot less expensive when it’s all said and done.
Insurance companies take several things into account when issuing you a quote. The first thing they consider is the size and value of your sailboat. Obviously, a 40-foot priceless classic schooner will probably cost more to insure than a fiberglass 1971 Catalina 22.
However, that’s likely not the most important factor. Insurance companies also consider your deductible and how much coverage you need. In fact, these two factors are likely the most influential when it comes to determining your annual premiums,
Location is another factor considered by insurance companies. Some states have notoriously high insurance premiums. This is often due to a combination of state regulation and analysis of how often people wreck their coats in the area.
Some parts of the country are known for heavy boat traffic. Combine that with a proclivity for bad weather, and you’re likely to encounter steeper insurance premiums.
The final consideration is your personal history and how often you plan to use your sailboat. As we discussed earlier, having a history of accidents can negatively affect your ability to find an affordable sailboat insurance plan.
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