Boat insurance basics: what's covered Amateur sailors, learn about boat owners insurance and what the coverage entails. Did you know that boat insurance is one of the earliest known forms of insurance? Ancient sailors knew firsthand about the risks of a life at sea and sought to insure their vessels against unpredictable waters. And it still applies today.Boat insurance policies can vary widely in what they do and do not cover based on a number of considerations, including the type of boat, the waters it will traffic, and how many months of the year the boat will be used. Still, there are a few basic kinds of coverage you can expect to receive, as well as some potential discounts for safe boaters.Physical damageThis coverage insures 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 will usually cover the hull and other permanent components, such as:MotorsExtra fuel tanks, batteries, etc.AnchorsOnboard safety equipment, such as flotation devices and fire extinguishersA trailer may or may not be covered, depending on the policy.When choosing your policy, be sure to ask whether you will be insured for the boat's replacement cost or its actual cash value. A replacement cost policy will reimburse you the cost of repairing the boat to its original condition or replacing the boat with the same or a similar model. A policy based on actual cash value will reimburse you for the current market value of the repair or replacement (the original price minus depreciation).Liability coverageThis coverage applies if your boat causes injury to others or damage to other boats, docks, or structures. Keep in mind that the injury or damage can be due to direct contact with your vessel or situations caused by your vessel, such as large wakes. Good liability coverage may provide protection against lawsuits, including the payment of settlements and legal fees.Other coverageYour insurer may offer additional kinds of coverage to go with your basic boat insurance. If you have other needs, ask your insurance agent what coverage is available.DiscountsThe best way to lower your boat insurance premiums is to become a safer boater. For example, many insurers offer discounts to boaters who have completed an approved boating safety course.