Do I Need Insurance When I Rent a Boat?

If you’re wondering whether you’re legally required to have insurance to rent a boat, the answer is no for 47 out of 50 states in the U.S. Typically, the reason behind this is boat insurance is mandatory in just three states, which include Arkansas, Hawaii, and Utah.

So, if you’re living in Arkansas, Hawaii, or Utah, then yes, it is a legal requirement to get a boat insurance policy even for renting a boat. However, for other states, and in general, most boat rental companies and marinas may require proof of insurance for renting a boat.

These businesses want to ensure that if the boat is damaged, lost, or involved in an accident, there’s financial coverage in place.

Is Insurance Required to Rent a Boat?

Based on a legal standpoint, apart from Arkansas, Hawaii, and Utah, boat insurance is not legally required to rent a boat.

However, while you’ve rented the boat, you’re financially obligated to pay for any damages. Even if it gets stolen or damaged due to a weather-related condition, such as a storm or tsunami, you would be financially responsible for the boat’s repair or replacement costs to the rental company.

If you don’t have boat insurance and if you’re unable to cover the damages out-of-pocket, you might get sued by the boat rental company, and the court may sentence you to compensate the repair expenses.

The point here is, even if boat insurance isn’t legally mandatory in your state, it can lead to serious legal consequences if you rent a boat without insurance.

On top of that, without boat insurance, you may even struggle to pay hefty medical bills if you get severely injured after a boat accident. Typically, most boat rental companies require proof of boat insurance, especially to ensure that you can cover any accidental damage.

So, if you judge and decide based on overall circumstances, you do need insurance to rent a boat. Or it should at least be considered to avoid such financial hurdles.

How Does Boat Rental Insurance Work?

Most boat rental companies will ask for proof of boat insurance which includes liability boat coverage, along with collision and comprehensive coverage. The liability boat coverage applies when you get into an accident by hitting another boat for which you’re at fault.

In this case, your liability boat coverage will pay for the other boat’s repair costs, along with the medical bills of that boat's driver, and its passengers. The collision insurance will pay your rented boat’s accidental damages when you collide with another boat or object.

Similarly, the comprehensive boat insurance will cover any accidental damages or financial risks to the rented boat that are beyond your control, which includes theft, vandalism, fire outbreaks, and natural disasters like severe storms, floods, and tsunamis, among others.

There are many other types of boat insurance coverages, but typically these 3 coverages are most essential as they cover liability compensation, and physical damage to the rented boat after an accident.

Before renting a boat, it is essential to ensure you have the right boat and watercraft insurance with adequate coverage. So, that’s why it’s crucial to explore insurance solutions from a reliable insurance agency operating across several states including Arizona, Colorado, Florida, Georgia, Michigan, Nevada, and Texas.

States that Require Boat Insurance

In the U.S. three states legally require you to have boat insurance, which includes Arkansas, Hawaii, and Utah. Whether you own the boat or rent it, you will need to have a boat insurance policy to legally operate the boat.

However, these three states only require you to have liability boat insurance with significantly different minimum coverage limits. In Arkansas, you need to get a minimum liability coverage of at least $50,000, and in Hawaii, the requirement is at least $100,000. Additionally, if you’re using a state-owned mooring or harbor, then you’re required to have boat insurance coverage of at least $500,000 in Hawaii. And, in Utah, you’re required to have minimum liability coverage as follows.  

• $25,000 to $50,000 for bodily injuries or death
• $15,000 for property damage
• $65,000 combined minimum per accident

Note: In both Arkansas and Utah, boat insurance is only mandatory for boats or personal watercrafts encompassing 50 horsepower or more. So, if your boat’s horsepower is below 50 then you’re not legally required to carry boat insurance in either of these states. As for Hawaii, boat insurance coverage mainly covers liability compensations and salvage costs for grounded or sunken watercraft.

Is Boat Insurance Required in Michigan?

Is boat insurance required in Michigan? If you’re concerned about the law, no you’re not legally obligated to have boat insurance in Michigan for owning or renting a boat. However, just like any other state, you do have financial risks when it comes to renting a boat.

Boating is a very common recreational activity in Michigan, especially because almost half of its area is covered by water. But as there are more boats out there, the chances of a boat accident are also significantly high.

So, even though boat insurance isn’t legally mandatory in Michigan, you should still consider acquiring the right coverage with adequate limits.

Why Should You Consider Having Boat Insurance for Renting a Boat?

If you’re located in Arkansas, Hawaii, or Utah, then you must have at least the minimum liability boat insurance to stay legally compliant before renting a boat. But from a general perspective, it is crucial to carry boat insurance, especially when you’re renting one.

According to the US Coast Guard, there have been a total of 3,844 boat accidents throughout the U.S. which led to 2,126 injuries and 564 deaths in 2023. On average, 4,000 boating accidents occur in the U.S. which leads to nearly 3,000 injuries, 500 deaths, and $63 million worth of property damage.

The harsh truth is that whenever you’re hitting the water, you’re always at risk of an accident. Also, depending on the crime rate in your area, there’s also a substantial chance of boat theft. Either way during the rental period, the boat is your financial responsibility, and here are two key reasons why.

May be Required by the Boat Rental Company

Most boat rental companies will ask for proof of insurance to ensure that you can pay for the boat’s repair or replacement costs in the event of accidental damage or theft. If you think about such requirements from a business perspective, the boats that are available for rent are their assets and source of income.

The moment you rent a boat, any accidental damage, or theft becomes your responsibility. You’re financially obligated to cover the repair/replacement costs of the boat. So, if you don’t have insurance, then you will have to pay the cost out-of-pocket which can be financially overwhelming.

In such events, if you can’t compensate the rental company, you may get sued which can lead to expensive court proceedings and legal consequences. Moreover, without having boat insurance, you may face difficulties renting a boat in the first place.

So, if you consider the overall situation and the consequences involved, it is best to ensure having boat insurance, especially because it’s mutually beneficial for both you and the rental company.

Financial Protection

It is highly essential to get boat insurance before or while renting a boat for your own financial protection. Boating is a risky recreational activity as it can lead to dangerous accidents due to shifts in weather, and natural circumstances. The water tides may get out of control leading to a dangerous crash.

During such events, if you’re at fault for the accident then you will have to compensate for property damage and medical bills of the occupants of the other boat. Moreover, if your rented boat gets damaged as well, you will also have to bear its repair costs.

Additionally, you will also need to spend money on medical bills to treat the bodily injuries of you and any passenger you may have onboard. On the other hand, even if you keep your boat securely docked or parked, there are chances it may get stolen or damaged due to an unprecedented incident such as a severe storm, fire outbreak, or any other accident.

There are so many ways you may either lose the rented boat, or it can get damaged. So, to stay on the safe side, the wise step would be to have adequate boat insurance coverage when you’re renting.

The Bottom Line: Stay Secure and Avoid Financial Hurdles with Boat Insurance

When it comes to renting a boat, you might be reluctant to get boat insurance, especially because boats are typically rented for a day or a week. This is the reason insurance companies offer temporary boat insurance for 1 day or even a week.

Although if you want to purchase boat insurance for a longer time, whether it’s 6 months or a year, you can do that too. Regardless, it is crucial to ensure having boat insurance to avoid expensive compensations, which can be financially overwhelming.

If you’re interested in learning more about boat insurance and what coverages you should obtain to stay financially secure, you can connect with a boat insurance agent or contact us for a free quote and consultation.

Frequently Asked Questions (FAQ)

Should you get insurance when renting a boat?

Yes, you should get insurance when you’re renting a boat, especially to stay financially protected against accidental damage, theft, and unexpected incidents such as fire outbreaks and natural disasters.

What happens if you don't have boat insurance?

If you don’t have boat insurance, you will have to cover liability compensations, accidental damages, and theft out of pocket. If you’re unable to afford it, it can turn into a financial burden.

Which states require boat insurance when rented?

Arkansas, Hawaii, and Utah are the only three states in the U.S. that legally require boat insurance. While Arkansas and Utah only require liability-only boat coverage, Hawaii requires liability and salvage coverage when you’ve rented a boat. This is mainly because in Hawaii, you need insurance to dock boats in state-owned harbors.

Is it worth getting insurance for renting a boat?

Yes, it’s definitely worth getting insurance for renting a boat, especially because you’re financially protected to cover the boat’s repair and replacement costs to the rental company. This secures you from the legal consequences of getting sued by the rental company. Not to mention, as most rental companies in the U.S. require boat insurance, it will also be easier and quicker to rent a boat with adequate insurance coverage.