A boat insurance policy typically provides coverage for a wide range of vessels, including outboard motor boats, boats with aft propulsion, jet propulsion, sailboats, floating houses, jet skis and the boat equipment used to transport them. There are two main types of boat insurance: the “agreed value” and the “actual cash value”. The way depreciation is managed is what differentiates them. Homeowners insurance policies usually offer property coverage for a small boat, motor and trailer, but exclude liability insurance.
It is possible to add boat liability coverage to your home insurance policy for an additional fee. The cost of boat insurance depends on several factors such as the age, engine size and value of the boat, lender requirements, marina requirements, state requirements and intended use. You may be able to receive discounts for parking if you don't use the boat all year round or for sailing in freshwater instead of saltwater. If your boating is restricted seasonally and your boat is stored during the winter, you can get deductions for winter parking. If you damage your boat or cause injury or damage to another person, you file a claim with your insurer asking them to pay for the damages.
Many insurance companies sell boat insurance, such as Allstate, Nationwide, Progressive, State Farm, The Hartford and USAA. In some cases, your home insurance will cover repairs to your boat trailer if it gets damaged while you're on your property. It is important to consider the implications of not having boat insurance even if your state does not require it. Your insurance company may require you to have this type of coverage if your boat is older than three years old. Liability insurance also covers your legal fees if you are sued for an issue covered by the policy, such as a boating accident.
If your boat damages someone else's property or injures someone during an accident, your liability insurance pays for the damage. Over time, as your boat ages, your insurer will likely insist on a policy with real cash value and often give you substantial savings. To begin with, if you have an accident as a result of operating a boat under the influence of alcohol, your insurance company may only pay a liability claim against you.
