March 4, 2024

It is better to pay for boat insurance than to hope you’ll get along with zero accidents. Remember, boats are freaking expensive to repair or replace. If you own a boat, you should ask yourself, “How much is boat insurance?” Skip and you lose!

How Much is Boat Insurance

Overview of Boat Insurance

Boat insurance protects you financially in the event that your boat is involved in an accident in which property is damaged or someone is injured.

Boat insurance costs between $200 to $500 per year on average, or about 1-5% of your boat’s worth if you have a large, powerful, or expensive boat. Let’s see more details!

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How Much is Boat Insurance?

Boat insurance costs between $200 to $500 per year on average, but for a large or expensive boat (such as a yacht or sailboat), insurance can cost up to 5% of the boat’s worth.

A $100,000 boat, for example, might cost around $2,500 per year to insure. Boat insurance costs vary depending on you and your boat, just like other insurance rates.

Factors that Influence the Cost of Boat Insurance

Many of the elements that influence vehicle insurance prices also influence boat insurance costs, but there are some special considerations for watercraft.

Type of Boat

The higher the value of a boat, the more expensive it is to insure. Yacht insurance, for example, nearly always costs more than pontoon insurance since yachts are more expensive.


Because high-powered watercraft are more dangerous, insurance companies consider the type of motor (inboard or outboard, horsepower, and so on). Slow and steady wins the race to lower insurance prices!


Your boat must have met US Coast Guard safety standards since it was built to be deemed in good condition. Otherwise, you’ll have to pay higher premiums because your boat’s safety measures are out of current.


Your boat’s age is important, as is yours. Don’t allow the cost of vehicle insurance to get you down! Download our checklist to find simple ways to save. In general, older boats are less expensive to insure, especially if they have only one owner.

You’ll generally obtain better rates if you’re between the ages of 25 and 60 because that’s when insurers believe you’ll be the most responsible.


Towing water skis or wakeboards is less dangerous than fishing or floating. If you utilize your boat for “risky” activities, your insurance company will raise your premiums to compensate for the accident they anticipate you will have.


Accidents on boats nearly always occur on the water (duh). So if you only use your boat sometimes, you’ll spend less than if you use it every weekend.

This is also why people in the north tend to pay less for boat insurance—the shorter boating season means less time for accidents.


In terms of where you reside, boating in a region prone to hurricanes (on the ocean), squalls (in the Great Lakes), or other hazards will result in higher premiums.

And if you reside in a state without a coastline, you’ll pay less. This is due to the fact that lakes and rivers are often safer than the ocean.

Driving Record

If you have a clean driving record (no accidents, injuries, or recent insurance claims in a boat or car), you should be able to acquire affordable rates.

However, what about your inexperienced teen or your irresponsible cousin who has totaled three vehicles? Not at all.

What Boat Insurance Discounts Can I Get?

There are numerous methods for saving money on boat (or even car) insurance. Discounts are available if you:

  • Take a boating safety course.
  • Make use of a diesel engine.
  • Ship-to-shore radios, Coast Guard-approved fire extinguishers, and other safety equipment should be carried onboard.
  • Combine your boat, home, and auto insurance policies.
  • You must pay your insurance premiums on a yearly basis.
  • Select a high-deductible policy.
  • You must wait at least two years before filing a claim.

What Does Boat Insurance Cover?

Boat insurance covers numerous costs associated with an accident, such as repairs, salvage, and hospital expenditures. Let’s go over the various types of coverage available.


The most significant sort of boat insurance is liability. It covers the other person’s repair and medical expenditures as a result of an accident you caused. What if you’re sued? Your liability insurance should cover the legal fees.

You can also investigate guest passenger responsibility, which protects you in the event that someone driving your boat with your permission causes an accident.

Liability also covers repairs to docks or other things you strike, as well as clean-up fees for oil and other pollutants spilled into the sea by your boat.

You will have to pay for damages to boats, docks, personal property, a person’s health, or the environment if you do not have liability coverage. That’s a lot of cash. So be safe and let the insurance company handle it.

Physical Damage

If something horrible happens to your boat, physical damage coverage will pay to repair or replace it.

  • Collisions with other boats, docks, underwater objects, or floating trash are all possibilities.
  • Wind, hail, lightning, and other weather-related damage.
  • It might be theft or vandalism.
  • Fire.

You can even buy an “all-risk” insurance policy: Unless otherwise specified, your insurance will cover anything that happens to your boat, even sinking.

The amount your insurance provider will pay to repair or replace your boat is determined by the type of physical damage policy you select.

Agreed Value Policy

You and the insurance provider collaborate to determine the value of your boat, and that amount is the most your insurer will pay you in the event of a covered accident.

So, if the agreed worth of your sailboat is $95,000, your insurer will pay up to $95,000 to replace or repair it. Most boats are adequately covered by agreed-upon value plans.

However, if you own a rare boat that is gaining in value, it will eventually outgrow the agreed-upon value. This is where the next sort of policy comes into play.

Actual Cash Value Policy

This coverage pays up to the market value of the boat on the day it was damaged. That implies you should be able to restore your boat or purchase a comparable model. You simply cannot upgrade on the insurance company’s cash.

For instance, suppose your boat is valued at $12,000 and it sinks. Even if you purchased more for the boat, the insurance company will only give you $12,000 for it.

Medical Payments

This coverage pays for medical expenses if you or your passengers are injured while on your boat. It can cover injuries resulting from a collision with another boat or even a nosedive on water skis.

Personal Property

Personal property coverage assists in replacing the unattached equipment that made your boat so enjoyable in the first place, such as your fishing gear, GPS system, and personal goods.

You can also acquire boat trailer insurance (which may be useful if you’re new to towing trailers).

Uninsured Watercraft

Consider a speedboat creating a massive wake and pushing your boat into sharp rocks. Your boat has been destroyed, but the other party is uninsured. Yikes!

Uninsured watercraft coverage will assist you in paying for repairs (or medical fees if you or your passengers are injured). That’s a lot easier than suing the other boater or, worse, footing the bill yourself.


If your boat breaks down on the open water, you’ll need to have it pulled back to shore. That’s when salvage insurance comes in.

You can also purchase insurance to cover the cost of removing your boat from the water if it sinks; otherwise, the wreckage could become a hazard to other boaters, causing even more accidents.

What Boat Insurance Doesn’t Cover

Boat, home, and vehicle insurance all have one thing in common: they don’t cover every situation. Here’s what your yacht insurance won’t cover.

Normal Wear and Tear

Boats, like any other machine, age and wear out. As a result, your insurer will not pay for cosmetic or mechanical concerns caused by normal use.

Faulty Machinery

While your insurance policy may cover an unusual mechanical breakdown, it will not cover manufacturer faults or items that broke because you used them incorrectly or neglected them.

Animal Damage

Animals can be a major hazard on the water. If your boat is damaged by a collision with a dolphin, manatee, or other marine mammal, your insurance policy is unlikely to cover it.

By the way, knowing what species dwell in your boating region is important so you don’t injure them, your boat, or the environment.


Is there another animal that hasn’t been mentioned? Mussels! These little guys are dangerous.

However, the insurance company will not pay for it—or for damage caused by insects, mold, or other infestations. It’s a good idea to inspect your yacht and remove any undesirable passengers.

Improper Storage and Transportation

Your boat slips off the trailer because you failed to secure it? Is your “winter storage” in the backyard? Your insurance company will attribute those damages to your carelessness and force you to pay the amount.

Accidents Beyond Your Navigational Limits

Your navigational limit is the area where you and your insurance provider agree to boat. Your insurance policy only provides coverage in that area. If you sail outside of it, you’re on your own.

Accidents Outside Your Layup Period

A layup period is when you remove your boat from the water for an extended period of time (typically in the winter). You will not be covered if you use your boat after your layup begins or before it is completed.

Underage or Unnamed Operators

Each state has its own restrictions regarding how old a child must be before driving a boat, so verify the local laws before allowing them to take the wheel.

Also, if your child (or another adult) routinely drives your boat, you should include their name on your insurance policy.

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The Bottom Line

Boat insurance is an essential part of responsible boat ownership. It protects you and your investment from the numerous risks associated with enjoying the water.

You may confidently embark on your aquatic adventures while protecting your boat and your peace of mind if you understand the elements that determine pricing and what boat insurance normally covers and does not cover.

Whether you’re a seasoned sailor or a first-time boater, obtaining the proper boat insurance is a prudent and vital decision for any watersports enthusiast.

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