Boat Insurance Coverage FAQ
Your boat and personal belongings are very important to you. What would
happen if you lost them due to an accident, theft or storm? To protect against
loss or damage to your boat and personal property make sure you have proper
and adequate coverage for your exposure. Protecting against such losses may require
Homeowners’ Insurance Policies usually provide only limited coverage for a
small boat. Typically, no more than $1,500 is available to pay for theft or
physical damage to the boat, its outboard motor, trailer, and any other
equipment or accessories. You should ask your producer (agent) or insurance
company representative about this. Coverage for theft is often limited and
frequently requires that the boat be on the property where you live when the loss
occurs. Additionally, your Homeowners’ Liability Coverage may not apply to
your boat, depending on its features (size, engine type, etc.). Personal belongings
are covered under the Homeowners Policy if the damage results from a covered
cause of loss, subject to your deductible and any other provisions, limitations, or
To verify that you have the proper type and amount of coverage for your boat
and boating activities, carefully review your Homeowners’ Insurance Policy. If
the coverage provided by your Homeowners’ Insurance Policy is not sufficient,
coverage can often be added as an endorsement, or it can be provided on a
If you are looking to buy boaters insurance, the following information may help
you in making your decision:
1. WHAT PERILS ARE NOT COVERED BY A TYPICAL BOATOWNER’S
ENDORSEMENT OR POLICY?
Pleasure boat policies or endorsements provide coverage for “all causes of
loss” that are not specifically excluded. Some of the typical exclusions
• Overheating of engines
• Corrosion or rust
• Damage during repair or servicing
• Normal wear and tear
• Gradual deterioration
• Mold, infestation or damage from insects, vermin or marine life
2. WHAT PROPERTY IS USUALLY COVERED?
Pleasure boat policies or endorsements often state that coverage includes
“the boat and all permanently attached equipment”. The policy may then
list items that are not permanently attached, but are covered as either part
of the boat’s value, or as a separate limit of insurance. Items that may or
may not be considered “permanently attached” under a policy include:
• Bilge pumps
• Boat furniture
• Boat and motor covers
• Cook stoves
• Deck chairs
• Depth finders
• Detachable canopies
• Emergency signaling devices
• Fire extinguishers
• Fuel tanks
• Life preservers
• Mooring cleat & lines
• Seat cushions
3. WHAT PROPERTY IS USUALLY NOT COVERED?
Pleasure Boat Policies or Endorsements usually exclude the following
• Beverages and other perishables
• Cameras or video recorders
• Cellular phones
• Jewelry and other personal articles,
• Para-sails, hang gliders or other devices designed for flight
• Portable televisions
• Stereos, tape decks or other instruments for recording or
• Scuba and other diving equipment
• Sail, masts, or spars while boat is operating in an official race or
• Water skiing equipment
4. IS LIABILITY INSURANCE A PART OF BOAT OWNER’S COVERAGE?
Most boat policies provide for Liability Coverage for a stated limit of
liability. The policy responds when an insured becomes legally obligated
for damages arising out of the ownership, maintenance, or use of a
pleasure boat. The coverage is provided subject to listed exclusions or
limitations, which will likely vary depending on the insurance carrier that
provides the coverage.
5. ON WHAT BASIS ARE PHYSICAL DAMAGE LOSSES ADJUSTED?
Policies differ on the settlement of losses.
• Replacement cost coverage (cost of replacement or repair)
• Actual cash value (cost or replacement or repair, minus
• Agreed value (an amount agreed upon by both parties to pay for
total property loss.)
You need to review the coverage in your policy and understand how
6. WHAT OTHER COVERAGE RESTRICTIONS MAY APPLY?
Some policies contain restricted navigation territories or time frames. If
the boat is operated outside these areas or times, the policy may not
provide coverage. Find out if your policy includes any of these
restrictions and be familiar with them.
7. WHAT KINDS OF PREMIUM DISCOUNTS ARE AVAILABLE?
Various kinds of discounts may be offered to help reduce the cost of
insuring your boat. Discounts may be given for attending safety courses
(such as those sponsored by the Coast Guard or the American Red Cross),
having a claim-free record, and/or buying other needed policies or
coverage from the same company. Ask your insurance producer (agent)
or company representative about any available discounts.
8. WHERE CAN I GO IF I CAN’T GET COVERAGE FOR AN EXPENSIVE
OR HIGH POWERED BOAT?
Surplus Lines Insurance is an alternative type of insurance coverage for
consumers who cannot get coverage in the standard market. These
insurance companies write coverage for high-risk situations, which
includes expensive yachts or boats, and high speed/high powered
pleasure boats. The higher risk of loss posed by these types of boats will
more than likely be reflected in higher premium rates than rates
associated with standard policies. Your producer (agent) or company
representative will likely be able to find this coverage for you if he/she
can not find coverage in the standard market.
9. IN CASE OF A STORM WATCH, WHAT STEPS CAN I TAKE TO
ENSURE ANY RESULTING DAMAGE IS COVERED ON MY
Damage mitigation requirements will usually vary by company.
However, many policies state reasonable measures should be taken.
Review your policy carefully with your producer (agent) or insurance
company representative to determine what might be done to reasonably
protect your boat to meet policy requirements should a severe storm
10. MANDATORY BOATING EDUCATION
Some states have mandatory boating education laws. This means you need to have taken a boating course in order to operate a boat. Not only is this safer for you and your passengers, you may also be eligible for discounts on your boat insurance.