Do you need boat insurance?

If your summer plans include boating, make sure you know what’s covered and what isn’t.
photo of a boat in a lake

1  Homeowners coverage

Most homeowners insurance policies will cover damage to your boat, but only for a limited dollar amount. These policies don’t provide liability coverage. You will need a separate boat policy to cover a more expensive boat, provide for medical payments, or pay for damage or injuries to others..

2  Types of boat polices

There are three kinds of boat polices:

  • Replacement cost: Pays to repair or replace your boat.
  • Actual cash value: Pays to repair or replace your boat minus depreciation. For example, a new boat in 2010 might cost $40,000, but today it’s worth $25,000. An actual cash value policy would pay up to $25,000 to repair or replace this boat.
  • Agreed amount value: Pays to repair or replace your boat up to a set value in your policy.

3  Understand your policy

  • A layup provision suspends coverage during the months when the boat is not in use.
  • There may be limits on your policy for ocean use. Talk to your agent to make sure your coverage fits your needs.
  • Most policies have restrictions on underage drivers.

Many insurance companies that sell homeowners insurance can also sell you a policy for your boat. Be sure to ask your agent about options. There are also insurance companies that specialize in boat policies.


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Last updated: 08/02/2017

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