Is Boat Insurance Required in Michigan

If you’re concerned about whether boat insurance is legally mandatory in Michigan, the short answer is no. However, if you own a boat, or you’re financing it on loan, it is crucial to ensure that you’re financially protected against accidents and unprecedented events.

When it comes to financing a boat on credit, your lender or marinas may require you to have liability coverage, along with collision and comprehensive coverage. It is to typically ensure that if you get into a boat accident, whether it’s your fault or not, you can cover the damages for the boat’s repair and replacement costs.

Apart from that, boat accidents can cause severe accidents, and even death, which can incur hefty medical bills, loss of income, liability compensations, and funeral expenses. Although boat insurance isn’t required by law, it is still vital for your own financial protection.

11 Reasons Why You Should Consider Boat Insurance in Michigan?

While boat insurance isn’t legally mandatory, there are many reasons why it’s still essential. Whether you own a personal watercraft such a small jet ski, or a yacht, incidents such as an accident, or theft can lead to tremendous financial loss.

Based on the risks associated with boating, there’s always a substantial risk of such incidents that can incur hefty financial costs. In case you’re uninsured then you may have to cover hefty out of pocket expenses which can be financially overwhelming.

So, if you’re in a dilemma about whether you should get boat insurance or not, here’s a detailed breakdown of 11 key reasons why you should consider boat insurance in Michigan.

Michigan is the 7th Most Dangerous State for Recreational Boating

Based on the geographical structure of Michigan, approximately 41.3% of its area is covered by water, so this means it has various waterbodies for recreational boating, which is the 2nd largest in the U.S. covering a 40,000 square mile area. In fact, boating contributes to $7.8 billion of the state’s economy.

As Michigan alone has 4 of the Great Lakes which include Superior, Michigan, Huron, and Erie, it is a prominent state for recreational boating. However, its vibrant boating culture also has a cost of critical accidents that lead to critical injuries, deaths, and even severe water vessel damage.

According to recent reports, there have been 26 injuries and 21 deaths in Michigan due to boat-related accidents in 2023. On average, there has been one death for every 4.9 boating, which is an alarmingly high fatality rate. According to Michigan’s Department of Natural Resources, 75% of boating-related fatalities are due to drowning.

Recent studies also suggest that Michigan has a fatal boat accident rate of 24% which makes it the 7th most dangerous state in the U.S. for recreational boating.

Evidently, Michigan is prone to boat accidents, which can lead to significant financial costs, so to stay protected, it is crucial to ensure you’re covered with adequate boat insurance coverage.

Financial Protection

No matter how carefully you cruise, accidents may occur at any time. You may hit underwater rocks that are often submerged close to the land, or you may even collide with another boat or object. There’s also a chance that your boat’s propeller can get entangled with a fishing net or any material that floats underwater.

There are so many ways your boat can get damaged, and it can even lead to severe accidents, especially if there’s a sudden leakage. Moreover, water tides are never predictable due to certain developments in weather conditions, it can get difficult to navigate your boat which can also deter its course and cause an accidental crash.

Apart from accidents, even if you keep your boat safely docked, it can get damaged or stolen. The main point here is, there are so many ways your boat can get damaged, and what’s worse is, it can lead to bodily injuries and even death.

The cost of repairing a boat can be as high as $3,000 to $10,000 or more in Michigan depending on the severity of the damage. On top of that, if you need medical treatment that can add a significantly hefty amount.

So, without adequate boat insurance coverage, you may need to bear a hefty financial cost out of pocket, which can be a huge risk especially if it’s beyond your affordability.

Liability Coverage

Even while cruising a boat, there’s always a high chance that you may hit another boat or watercraft. In case you’re at fault for the accident, then you’re legally responsible for paying the other driver’s bodily injuries, boat, and property damages.

So, if you have liability boat coverage, then your insurer will cover the medical bills of the other boat driver, and the passengers of that boat. Your liability coverage will also compensate for any repair or replacement cost incurred by the other driver.

Additionally, if your boat collides with another person’s property whether it’s their tree, fence, or building, and if it’s proven that you’re at fault for the accident, your liability coverage will pay for the property damages up to the coverage limit.

It is also noteworthy to keep in mind that liability coverage will only pay for the other driver’s injuries or damages, as it typically applies to third parties harmed by an accident that you’re responsible for. It does not cover your own medical bills or boat repair costs, as it’s mainly designed to financially protect you by covering liability compensations.

Uninsured/Underinsured Coverage

Suppose you’re out with your family, cruising on a fine Sunday afternoon. Suddenly, another boat accidentally hits yours, and the impact has caused significant damage to your boat, and more importantly, you and your family members have sustained severe injuries.

In this case, if the other boat driver is at fault, they are liable to cover your boat’s repair/replacement costs and the medical bills required for you and your family members.  Now, if this other boat driver is uninsured or does not have adequate insurance, nor can compensate you out-of-pocket, then you must either cover any incurred costs from another insurance coverage, or out-of-pocket.

This is exactly where uninsured/underinsurance coverage comes in, this coverage is specifically made to pay for your medical bills and boat damage when the other driver is unable to cover it.

As boat insurance isn’t legally mandatory in Michigan, there’s a high chance another boat driver may be uninsured/underinsured, so to stay on the safe side, it’s highly recommended to consider uninsured/underinsured coverage.

Loan Requirements

When it comes to purchasing or financing a boat on loan, most lenders or boat shops will ask to verify whether you’ve adequate boat insurance coverage to pay the repair/replacement cost after an accident.

If you don’t have boat insurance coverage, then many lenders may be reluctant to provide you with a loan for financing your boat. This is mainly because, as long as you haven’t paid the full price of the boat, it is still their property.

So, if you don’t have any boat insurance policy, and if you’re also unable to cover the damages out-of-pocket, then the lender has to get the boat fixed with their own coverage or at their own expense, which is a huge risk.

Boat insurance, in this case, protects not just you but the lender’s investment too, and that’s why it is essential for you to have boat insurance, especially when you’re financing it on a loan.

Marina Requirements

Marinas typically offer different types of boats on rental or a lease agreement. Even though you’re paying them for using the boat for an agreed time, they still own the boat. And that’s why marinas will ask for proof of boat insurance coverage to ensure that you’re covered to pay for accidental damages.

In most cases, marinas offer boats on rental for a day or a week, whereas some marinas provide their boat for a long-term lease agreement. So, if you’re planning to rent a boat from a marina, it is essential for you to have adequate insurance coverage, which mainly comprises liability coverage, collision coverage, and comprehensive coverage.

Weather Conditions

Bad weather is often the prime cause of accidents while cruising a boat. Michigan is prone to dangerous weather conditions such as storms, and tsunamis, and these natural disasters can cause dangerous water tides.

When the water tides get aggressive, it becomes difficult to control or navigate the boat. Even large boats such as yachts, and ships can struggle to maintain control in poor weather conditions.

If you’re cruising a smaller boat such as a jet ski, pontoon, or kayak the risk is even greater. Regardless of the size of a boat, bad weather conditions can cause your boat to go off course, and collide, or it can cause it to flip causing significant damage, and injuries.

Even if you’re not cruising the boat, let’s say you leave it parked in a garage space, weather conditions such as storms, and floods can significantly damage your boat. So, to stay financially protected it is crucial to ensure that you’re adequately covered with comprehensive boat insurance coverage.

Watercraft Theft

According to NICB, Michigan ranks as the top 8th state for watercraft theft in the U.S. Typically, the risk of your boat getting stolen mainly depends on the crime rate in your area and how securely you’ve stored your boat.

Whether it’s safely docked at the marinas or parked in a garage space, thieves will try to find a way to steal your boat. Unfortunately, if your boat gets stolen, and if it’s not possible to recover it, then it can lead to a substantial financial loss.

On top of that, if you have been financing the boat on loan or a lease agreement, then you will have to repay the loan out of pocket even after the boat has been stolen. If you’ve rented the boat, then you will need to pay the marina the cost of replacing it.

As boat insurance is quite common in Michigan, there’s a significant chance that your boat might get stolen as well. So, that’s another key reason why you should have boat insurance in Michigan. To keep yourself financially protected from boat theft, you need comprehensive boat insurance coverage.

Fuel Spill Liability and Wreckage Removal

Boats are often prone to accidental fuel spills, and as fuel spills pollute the water, if you don’t fix it or get it under control, you can get penalized for environmental damage, leading to hefty fines and other legal penalties.

If you need to repair the fuel line of your boat then it can cost $300 to $500, but if you need to repair or replace the fuel tank, it can cost you $1300 to $1500 or more. Depending on the size, make, and model of your boat, the cost can significantly vary, and it can even amount to thousands of dollars.

This is the reason it’s crucial to have a boat insurance policy with fuel spill liability coverage. Remember, fuel spills can happen in boats at any time, so it’s essential to have adequate fuel spill insurance coverage for your boat to cover the repair and replacement costs.

In worst-case scenarios, a dangerous accident can cause your boat to sink, and the cost of recovering a sunken boat can cost $10,000 or more. But with wreckage removal coverage, your insurance provider will pay the cost of recovering your sunken boat up to your coverage limit.

In a nutshell, boats are prone to sinking and accidental fuel spills, so that’s why it’s crucial to have a boat insurance policy to mitigate these costs.

Emergency Assistance Cost

While you’re cruising, your boat can malfunction, leaving you stranded. It can also happen if the boat gets damaged right after an accident or a collision. Or it may simply run out of fuel or have minor mechanical issues.

In any of these situations, you will need emergency assistance to repair your boat by reaching you on the spot. Or, to get your boat back to land and towed to the repair shop.

Depending on the severity of the issue and the range of services required, emergency assistance costs can be expensive. So, to ensure you can cover it without any hassle, it is crucial to have insurance such as emergency boat insurance coverage or slide and guide towing coverage.

Peace of Mind

The biggest plus point of having boat insurance is peace of mind. Accidents are probable, nobody wants to get into one. However, it’s also essential for you to stay prepared and ensure that you’re financially protected.

As Michigan has substantial risks of boat accidents, it’s essential to ensure you have the right boat insurance coverage with adequate limits. Also, to properly enjoy your cruise, peace of mind is crucial, so that’s another key reason you should consider getting boat insurance in Michigan.

Types of Boat Insurance You Can Purchase in Michigan

If you’re shopping for boat insurance in Michigan, it is essential to know the different types of boat insurance that are available. The right policy can help protect you financially from accidents, injuries, property damage, and liability claims. Here are the following types of boat insurance that you can consider purchasing in Michigan.

• Liability boat insurance coverage: The liability boat coverage will cover medical costs and repair/replacement expenses of the other boat, its driver, and any passengers when you’re responsible for the accident while cruising.
• Collision boat insurance coverage: Regardless of who is at fault, if you collide with another boat or object, the collision insurance will cover your boat’s repair/replacement costs after the accident up to your coverage limits.
• Comprehensive boat insurance coverage: The comprehensive boat insurance coverage applies for incidents that can damage your boat that are typically beyond your control, such as theft, vandalism, fire outbreaks, natural disasters such as tsunami, flood and other dangerous storms.
• Uninsured/underinsured boat insurance coverage: This covers your medical bills and boat or property damage if you're hit by another boater who has no insurance or doesn’t have enough coverage to pay for the damages. It also applies if the at-fault party can't afford to pay out of pocket.
• Fuel spill coverage: Fuel spill is a concerning issue that can occur due to various reasons after an accident, or due to a refueling mishap. With the fuel spill coverage, you can fix your boat’s leakage issue.
• Wreckage removal: Sunken boats need to be recovered, so the wreckage removal coverage will pay the cost of retrieving your boat and getting it back from the water.
• On-Water Towing Coverage: If your boat breaks down or gets disabled on the water, the water towing insurance coverage will pay for the cost of towing your boat to the land and for transporting it to the docking area or the repair shop.
• Roadside Assistance or Towing Coverage: If your boat gets stuck on the road or at the dock, and it needs to be moved to a repair shop, the roadside assistance coverage will cover the cost of towing your boat.
• Watersports Coverage: The watersports coverage pays liability compensation when you’re responsible for injuries and property damage while participating in water activities such as tubing, wake surfing, wakeboarding, kneeboarding, boating, kayaking, or swimming.
• Fishing equipment or carry-on items coverage: If you have fishing equipment, or other personal items in a boat that have been damaged or lost, this coverage will cover the cost of repairing or replacing those items.  

While shopping for boat insurance in Michigan, it is necessary to explore coverage from a reliable insurance agency that provides Cheap Boat and Watercraft Insurance. Here at L.A. Insurance, we prioritize ensuring you have the best coverage within your budget. So, based on your insurance requirements, you can purchase the boat insurance coverage for adequate financial protection.

How Much is Boat Insurance in Michigan?

The cost of your boat insurance can widely vary, mainly depending on the coverage that you choose to purchase. But in general, the average cost of boat insurance in Michigan typically ranges from $75 to $500, or more.

If you opt for liability-only boat insurance coverage, then it can cost you about $100 on average. Typically, when it comes to boat insurance rates in Michigan, they can significantly vary based on the type of watercraft you own, insurance claims history and boating experience.

Is Boat Insurance Required in Michigan During Winter?

If you’re concerned about whether boat insurance is legally required in Michigan during winter, it’s not. On the other hand, if you’re concerned about financial safety, the seasonal conditions are unfavorable for cruising as the rivers, lakes, and other water bodies freeze in Michigan during winter.

If you intend to cruise your boat then you will have to do it at the sea or explore the ocean, which can be even more dangerous, especially for recreational boating. So, if you do use your boat during winter then you should definitely consider having boat insurance.

However, based on the weather conditions if you need to keep your boat stored at the garage or at the dock, you should still have an active boat insurance policy at least with comprehensive coverage.

While your boat sits idle as it’s safely parked, it’s still not entirely secure from theft, vandalism, fire hazards, or natural disasters such as severe storms and floods.

The Bottom Line: Should I Get Boat Insurance in Michigan?

Yes, to ensure your own financial safety, you should consider getting boat insurance in Michigan. As boating is a common activity in Michigan, it is also prone to frequent accidents. Plus, there’s always a substantial threat of damaging your boat while cruising or accidentally hitting another boat for which you’re liable to compensate.

Moreover, if you consider factors such as the crime rate there’s also a risk of boat theft. Not to mention unexpected incidents such as fire outbreaks or natural disasters can damage or wreck your boat even if it’s safely parked or docked.

Boating by default is a risky activity, and that’s why it’s crucial to ensure you have adequate financial protection to cover hefty medical bills and boat repair costs, especially after an accident.

So, if you are interested in exploring, learning more about boat insurance, or purchasing it in Michigan you can find and connect with a boat insurance agent nearby. Or you can contact us to get a free quote, and consultation.

Frequently Asked Questions (FAQ)

Do I have to have insurance on my boat in Michigan?

No, boat insurance is not legally required in Michigan. However, if you’re renting a boat or financing it on loan, then your lender or marina may require proof of insurance. Apart from that, you should get adequate financial coverage, as boat accidents are quite common in Michigan.

What happens if you don't have boat insurance?

If you don’t have boat insurance in Michigan, then you will have to cover accidental damages out of pocket which can include medical bills, your boat’s repair/replacement costs, and liability compensations. Moreover, it may also be difficult to acquire a boat on loan or rent especially because most lenders and marinas in Michigan ask for proof of insurance.

How much does boat insurance cost in Michigan?

On average, boat insurance can cost you $75 to $500 or more, depending on the coverages you purchase, the type of boat you own, your insurance history, and your boating experience.

Is it worth getting boat insurance in Michigan?

Yes, it's definitely worth getting boat insurance in Michigan, especially because the state is prone to boat accidents while cruising. Plus, there’s also a significant threat of natural disasters and theft in Michigan, which makes boat insurance necessary to avoid financial burdens.