What does boat insurance cover?

Overview: Boat insurance may provide coverage for physical damage to your watercraft from risks like sinking, fire and collision, along with liability protection if you injure others or damage their property. It may also fill gaps often excluded from homeowners policies by covering scenarios like wreckage removal, fuel spill cleanup and damage to onboard equipment.

In 2024, the Coast Guard counted 3,887 incidents that led to 556 deaths, 2,170 injuries and $88 million in property damage resulting from recreational boating accidents. Given the frequency and impact of these accidents, it may be helpful for boat owners to understand the ins and outs of boat insurance before hitting the water.

How does boat insurance work (vs. homeowners insurance)?

A possible misconception is that your homeowners policy covers your boat. Homeowners insurance typically doesn’t cover boats when they’re off your property, or it may limit coverage to small boats, like canoes, with low horsepower (hp). This is why boat insurance may be necessary, as it may help provide coverage for damage to your boat and other vessels as well as injuries that occur while boating.

Depending on your policy, boat insurance may provide coverage for damage to your boat and other involved vessels in a covered claim. Following is a breakdown of what’s covered in typical homeowners and boat insurance policies.

Boat insurance coverages

Understanding the different types of boat insurance coverage is important to help protect your boat and safeguard your financial security. Here are some common coverage options you may want to consider.

Physical damage

This coverage may insure your boat against damage and loss caused by common risks, such as sinking, fire, storms, theft and collision. The property covered can vary, but the policy typically offers coverage for the hull and other components like:

• Motors
• Anchors
• Furnishings and fittings
• Extra fuel tanks or batteries
• Onboard safety equipment, such as flotation devices and fire extinguishers

A boat trailer may or may not be covered, depending on the policy. Talk with your agent to determine if your boat insurance policy provides coverage for your trailer.

Liability coverage

In the event of a covered loss, liability coverage may help protect you from legal claims and financial losses if your boat causes damage to other boats, docks, structures or injury to others. Damage caused by direct contact with your vessel or situations like large wakes may be included, along with coverage to help pay for resulting settlements and legal fees.

Optional coverage

Depending on your boating needs, you may consider adding additional coverage to your basic policy, such as:

• Reimbursement for boat rental costs due to a covered loss
• Coverage for your boat while rented to others
• Liability coverage for rented boat usage
• Uninsured and underinsured boater coverage
• Coverage for equipment, such as fishing gear (often excluded from standard hull coverage)

Other coverage (the “hidden risks”)

Your insurer may offer additional coverage to go with your basic boat insurance. For example, a State Farm® boat insurance policy may help provide coverage for high-cost events, such as:

• Wreck removal — if your boat sinks, raising and removing it is often required by law and can cost thousands of dollars. Basic policies may not cover this.
• Temporary repairs and minor emergency services — this service may cost hundreds of dollars (depending on the type of boat and distance to tow it) and may include coverage for towing or on-water assistance.

For additional information, talk with your agent.

Helping protect your purchase

When selecting a policy, it’s important to determine if it may provide coverage for the replacement cost or actual cash value (ACV) of your boat. In the case of covered claim, this choice will help determine how much you may get paid if your boat is a total loss.

• Replacement cost — this policy offers coverage for the expense to restore your boat to its original state or replace it with a comparable model.
• Actual cash value — this policy offers coverage for the repair or replacement cost minus depreciation at the time of the loss (e.g., if your 10-year-old boat is totaled, you are paid its current used market value; not what you paid for it).
• Agreed value loss settlement — some policies may also include this for total loss scenarios, so you receive the policy’s full coverage limit if your boat is deemed a total loss (regardless of how old the boat is) and is typically recommended for boat owners.

Discounts

Becoming a safer boater may be one way to help lower your boat insurance premium. For example, some insurers offer discounts to boaters who have completed an approved boating safety course. Check with your insurance company to see whether this option is available to you.

Other frequently asked questions about boat insurance

Following are some common questions about boat insurance coverage and costs.

• How much does boat insurance cost? Boat insurance costs are influenced by your coverage selections (including limits and deductibles), the type and size of your boat and how and where you plan to use and store it. Consider coverage to fit your needs when making selections and check with your insurance agent to determine the cost for your situation.
• Does boat insurance cover sinking? State Farm, for example, typically offers coverage against perils like sinking, fire, theft and storms, to name a few.
• What types of boats are typically insured by State Farm? State Farm offers boat insurance for a wide variety of watercraft like sailboats, fishing boats, jet skis, kayaks and canoes.
• What sets State Farm boat insurance apart? State Farm has been insuring customers since 1922. We offer competitive rates and broad coverage options to help meet your needs, including agreed value loss settlement for total losses.

Buying boat insurance may help you be prepared when the unexpected happens. Learn more about boating safety ideas and which coverage options may fit your boating lifestyle by contacting a State Farm agent today.