Have You Insured Your Boat or Personal Watercraft?

Just because you’re out on the water doesn’t mean there aren’t risks to you and others or to your watercraft. But what kind of coverage do you need?

While insuring a small boat or personal watercraft is similar to buying insurance for your car, buying insurance for a yacht is more like buying homeowner’s insurance.

Watercraft insurance explained

Like home insurance, a boat policy covers you for liability if someone is injured on your craft. The insurer also will give you a choice between replacement cost or cash value in case of a total loss such as a fire or if you have an accident bad enough that will require the boat to be totaled.

A boat policy typically includes coverage for bodily injury your boat inflicts on others, property damage it inflicts on docks and other boats, and physical damage to your craft should you hit something or run aground.

You can purchase:

  • Comprehensive insurance to cover against theft, vandalism, and fire.
  • Personal property coverage for any personal possessions you may keep on the boat.
  • Uninsured boater insurance in case someone not insured plows into you.
  • Roadside assistance if you need a tow.

Many insurers will allow you to lay up or suspend coverage for a specific period of time when you won’t be using the boat. Beware, though some boat owners have been caught unawares when they have an accident on a nice sunny afternoon in late October when their policy specifies it’s only covered from April 1 to Oct. 1.

Agreed versus market value

Under agreed value, you and the insurance company agree on the value of the boat up front. With market value, the insurer will pay up to the current market value (new price minus depreciation) if the boat is totaled. Insuring the market value can save you up to 25% on the premium, depending on the insurer.

Typically, if you own a new boat you may want to go with agreed value since the boat, much like a car, will depreciate once you take it out of the showroom.


  • If you are towing your boat and the boat is damaged, the car policy will cover it, and the limits of that policy apply.
  • If the boat is out of water and parked at your home, the watercraft insurance will typically not cover damage, vandalism, or theft. That would be covered by your homeowner’s policy; an umbrella policy is recommended.
  • Most boat insurance policies have navigational limits, meaning the boat will only be covered in a certain geographic area.