How do I Know Which Boat Insurance Plan to Get?

When it comes to determining which boat insurance plan to get, it’s often best to separate boat insurance from other types of insurance policies. For example, many homeowners’ policies fail to cover or limit marine-specific risks, including environmental damage, pollution, wreck removal or salvage work. However, there are exceptions, and some policies may include acceptable coverage for smaller boats, typically those that have a horsepower limit of 25- to 100-horsepower. While riders are usually adequate for these vessels, make sure you ask questions regarding damages to your vessel and how you will be compensated.

Insurance Factors

There are several factors that insurance companies consider when deciding whether or not to offer a policy. When shopping for a boat insurance policy, keep in mind the value of the vessel, its length and age, its horsepower and speed, whether it will be used a primary residence and overall condition. Also, ownership and type of boat as well as where you will operate it will play a role in determining the type and coverage of your policy.

Types of Boat Insurance

The two types of boat insurance policies include “actual cash value” and “agreed value.” Determining which boat insurance plan to get often depends on how depreciation is handled. “Actual cash value” policies may be more inexpensive, but the policy will only pay up to the actual cash value of the boat when the insurer declares it a partial or total loss. Conversely, an “agreed value” policy covers the boat based on its value at the time of writing the policy.

The types of coverage will depend on the policy, but common add-ons include a cruising extension if you plan to leave the U.S., towing your boat across water to safety, consequential damage that covers wear-and-tear loss rather than an accident, salvage coverage that removes your boat as a result of damage and specialized coverage for something specific such as navigation equipment or an expensive prop.


Hopefully, you won’t need to make a claim, but if you do, it’s always good to be prepared. You aren’t required to carry proof of insurance while you’re on your boat, but in an emergency, having your claim information handy will make the process much smoother. When shopping for a boat insurance policy, ask the insurer how the claim process works. Find out if an agent will be available if you need assistance following a claim, including arranging for salvage or towing rather than simply cutting you a check and leaving you to fend for yourself. If you have boating friends, ask them which company they use and how the company handled previously claims to get an indication of the quality of service you can expect in the future.


Before determining which boat insurance plan to get, it’s important to consider a number of factors such as the age and size of your boat as well as where you plan to cruise. Cost factors may also include whether you have received formal certification or training in boat safety, liability limits and positive driving records from both boating and driving. However, regardless of your needs, there are several types of coverage and add-ons you can apply to your policy to ensure that you protect your investment for the duration of ownership.