Many home insurance policies provide partial coverage for watercraft, but if you own a recreational boat, you’ll likely need specific boat insurance for full protection. Most homeowners policies offer maximum payouts of just $5,000 or 10% of your home’s insured value for watercraft, and they often don’t include liability coverage. Liability coverage is essential to protect you financially if your boat causes damage to other people or property.
For small boats like canoes or kayaks, your homeowners policy may be enough. However, recreational boats — those under 27 feet — usually require additional coverage, especially if they travel at speeds greater than 40 km/h. Note that yachts and personal watercraft, such as Jet Skis, Sea-Doos, or WaveRunners, require different insurance from recreational boats.
Smart Coverage
Typical boat insurance policies provide:
- Liability protection for bodily injury, medical expenses, and property damage caused by your boat.
- Physical damage coverage for your boat, including damage from collisions, fires, theft, vandalism, and more. This includes the hull, engine, and attached equipment.
What’s Not Covered
Boat insurance usually excludes coverage for:
- Normal wear and tear
- Defective machinery or lack of maintenance
- Damage from wildlife (including sharks and insects)
- Damage from mold, ice, or freezing
You may also want to add coverage for trailers, expensive accessories, towing, uninsured boaters, or carry-on equipment like fishing gear.
Policy Details to Know
Every policy has important details that you should understand. Here are some specifics to discuss with your insurance broker:
- Navigational limits: Are there specific waterways you’re restricted to? What if you want to take your boat outside these areas? Freshwater, inland lake boats are typically cheaper to insure than ocean-going vessels.
- Marine inspections: Is a marine survey required for certain boat model years? Even if it’s not, you may still want one to confirm the boat’s value.
- Underage operators: What are the age and license requirements for the waterways you’ll be using? Does coverage extend to underage operators?
- Equipment: Ensure your policy covers the necessary equipment like anchors, oars, trolling motors, seat cushions, and life jackets.
Types of Policies
You will need to choose between two types of boat insurance policies:
- Actual Cash Value (ACV): Claims are paid based on replacement cost minus depreciation. If your boat is a total loss, payment is determined by used boat pricing guides. Partial losses are paid based on the cost of repair, minus depreciation.
- Agreed Amount (or “Stated Value”): Claims are paid based on a value you and your insurer agree to when the policy begins. Total losses are paid at this value, and partial losses are settled without any deduction for depreciation.
To choose the right policy, compare premium costs with the level of risk you’re comfortable with. If you prefer an agreed amount policy but find the premiums too high, you can reduce costs by adjusting your deductible.
Ways to Save on Boat Insurance
You can reduce your premiums by asking your insurance broker about discounts for:
- Diesel fuel engines, which are considered less risky than gasoline engines
- Coast Guard-approved fire extinguishers
- Ship-to-shore radios
- Completed safety courses
- Bundling multiple policies with the same insurer (home, auto, umbrella)
- Two or more years without a claim
- A good driving record
Review these discount options each time your policy renews.
Year-Round Protection
It might be tempting to suspend your boat insurance when your boat is in storage, but boats can still suffer damage year-round from fires, vandalism, theft, or winter storms. Instead of canceling coverage, consider a “lay-up” policy during the off-season. This reduces your coverage but still protects your boat from risks while it’s out of the water. Keep in mind that lay-up policies require you to adhere to specific calendar guidelines. If you take your boat out even a day before coverage resumes, you won’t be protected.
Contact Your Broker
To ensure you have the right watercraft coverage and to explore available discounts, contact your insurance broker today.
