What Does Boat Insurance Cover and Not Cover?

Whether you’re thinking of purchasing a boat insurance policy or you’re about to claim your boat insurance coverage, it is essential to know what it covers and what it doesn’t.  

Without adequate knowledge of what boat insurance covers, it can be confusing to determine which boat insurance coverage you actually need. You may either spend more on unnecessary coverage or miss out on essential coverage.  

Plus, when it comes to making insurance claims, if you make claims that boat insurance doesn’t cover, your claim will get denied. Here’s a potential issue, although denied claims don’t typically increase insurance rates, it does stay on record.  

As denied claims stay on the record, it can potentially influence your boat insurance rates to increase in the following year, especially if you make multiple invalid claims. So, if you want to make the right decision and properly use boat insurance to cover any financial loss, you need to know what exactly your boat insurance policy covers.    

What Does Boat Insurance Cover?

There are so many ways boats face risk at the dock and on open water, from accidental damage and theft to collision and sinking. Boat insurance is designed to financially protect you from several outcomes that can incur a hefty loss. So, to make the best use of boat insurance, it’s essential to know what it covers.  

Here’s a detailed breakdown of boat insurance coverages to help you understand what exactly each of them covers. 

If you’re looking for a affordable insurance agency with a wide selection of affordable boat and watercraft insurance coverage, you should explore L.A. Insurance’s boat insurance policy.

Liability Coverage

While cruising your boat on the water, if you accidentally hit another boat, vessel, or someone else’s property, and if you’re responsible for the accident, then you will have to cover their repair/replacement costs along with medical bills.    

Your boat insurance’s liability coverage will cover compensation for accidents in which you’re at fault. It only covers third parties affected by the accident; it doesn’t cover your own boat or your personal medical bills.    

Collision Coverage

While cruising, if your boat collides with another boat or object and it gets damaged, your boat’s collision coverage will pay its repair and replacement cost up to the coverage limit. This type of coverage applies regardless of who’s at fault, and specifically covers damage to your own boat, not the other party’s.   

Comprehensive Coverage

Whether your boat is safely docked at the port or you’re cruising on the water, unprecedented incidents like theft, vandalism, fire, fuel leakage, and weather conditions like tsunamis, floods, earthquakes, and severe storms can damage your boat.   

Typically, comprehensive boat insurance coverage is designed to cover your boat’s repair and replacement costs when you incur financial loss due to an unexpected event that’s beyond your control.

Uninsured/Underinsured Boater Coverage

Boat insurance is legally required in only 3 states in the U.S., which include Arkansas, Hawaii, and Utah. So, apart from these 3 states, it’s optional in every other state. This raises a serious concern about the number of boaters who have adequate insurance coverage or any at all.   

So, if you get involved in an accident in which the other boater is at fault, they will have to cover your medical bills and your boat’s repair costs. Now, if the other boater does not have sufficient liability coverage or if they are uninsured, then you will need the UI/UM (uninsured/underinsured) boater coverage to partially or fully cover your medical expenses, and the boat’s repair costs up to your coverage limit.    

Medical Payments Coverage

Whether you’re cruising a small boat like a jet ski or a large boat such as a yacht, boat accidents can lead to severe bodily injuries and health issues that may require medical treatment. Your boat insurance’s medical payment coverage will cover the medical bills of you and your passengers, including health checkups/tests, hospital stays, prescribed medication, and even funeral expenses.  

Depending on the severity of injuries or health issues due to the boat accident, it is necessary to have adequate medical payments coverage in your boat insurance to cover hefty medical expenses.      

Fuel Spill Coverage

Just like any other motor vehicle, even boats are vulnerable to fuel spills. If your boat’s fuel spills out on the water, it can lead to serious environmental harm and result in fines under environmental protection laws.  

Fuel spill coverage helps cover cleanup costs and legal liabilities, including fines, so you’re not left paying out of pocket for any environmental damage. Additionally, if your boat remains stranded on the water, the fuel spill coverage also covers the expense of transporting the boat back to land or directly to the boat repair shop.   

Wreckage Removal Coverage

Wreckage removal coverage pays the expense to retrieve a sunken boat or remove a dysfunctional boat from the water that can’t make it back ashore. If your boat is submerged or stranded in the water after an accident, this coverage ensures that the wreck is safely removed either due to your personal choice to retrieve it, or as a requirement by law or marina regulations.

Coverage for Personal Items and Fishing Gear

It’s common to lose personal items and fishing gear if your boat sinks after an accident, drifts away from the dock, or gets stolen. In these circumstances, coverage for personal items and fishing gear will pay the actual cash value, which is the amount your belongings are worth after deducting their depreciation.    

Water Sports Coverage 

If you’re into recreational boating activities like water skiing, wakeboarding, tubing or any other water sports, it is essential for you to consider the water sports coverage as a part of your boat insurance policy. Typically, these water sports have a high risk of severe and even fatal accidental injuries.  

So, the water sports coverage covers medical bills while participating in these types of water sports. Additionally, if you want to cover specialized sports boats and equipment, jet skis, wakeboards, or tow ropes, you need to get an add-on or endorsement for extended coverage.    

On Water Boat Towing and Labor Coverage

On water boat towing and labor coverage is an add-on coverage that pays the expense to safely transport a disabled boat back to a safe location, like a marina or a repair store, after a mechanical breakdown or any other issue that leaves it stranded on the water.  

It also covers towing the boat to a designated location, which can be a docking area, garage space, or the nearest repair shop. In contrast, it’s mainly designed to get your boat back to shore and then move to a secure and convenient location.    

Roadside Assistance Coverage for Boat

Roadside assistance coverage for boats is an optional add-on that helps cover the cost of towing your boat trailer if it breaks down while being transported by road. This coverage typically includes services like tire changes, battery jumps, and fuel delivery for the towing vehicle or trailer.  If your trailer becomes disabled or your towing vehicle has a mechanical issue, this coverage ensures that help is available to get your boat back on the move, whether it's being transported to the water, nearest qualifying repair shop, or to your garage.    

What Does Boat Insurance Not Cover? 

While boat insurance covers several accidental damages, it has some policy exclusions. Typically, these exclusions include negligence that leads to wear and tear, manufacturer’s defect, mold and infestation, animal and marine life damage, and reckless boating activities. 

If you claim boat insurance, and if it falls under any of these exclusions, then your insurance claim will be denied. Here’s a detailed overview explaining what boat insurance does not cover.    

Gradual Wear and Tear 

If you haven’t properly maintained your boat, which has led to rusting, corrosion, and mechanical issues, your boat insurance policy won’t cover it. Negligence in proper maintenance makes you directly responsible for the damages, and that’s why your claim will be considered void and invalid.      

Manufacturer’s Defect

If your boat has any manufacturer's defect, your boat insurance won’t cover you. This is because the manufacturer is responsible for any damage or accident. So, if your boat has any manufacturer’s defect, your insurer won’t cover the financial loss. You will either have to claim a warranty or demand a refund.    

Molds and Infestation

If there’s visible mold or infestation on your boat, your insurance claim may not be accepted. Appearance of molds and infestation shows negligence and a lack of proper maintenance.   

The presence of mold/infestation can damage your boat’s structure, engine, and essential systems over time. Moreover, if mold or pest damage is present, your insurer may deny coverage even for accident-related repairs.   

Animal and Marine Life Damages

Standard boat insurance typically does not cover damage caused by animals or marine life. For example, if rodents chew through wiring inside your boat, the damage may be excluded due to a lack of proper maintenance or pest control. 

Similarly, barnacles and mussels can attach to the hull and cause gradual damage. Since these issues are considered preventable with regular upkeep, your insurer may hold you responsible for a lack of proper maintenance.  

In rare cases where a marine animal, such as a shark or whale, hits your boat and damages the hull, the claim may still be denied, especially if the impact cannot be clearly proven.   

Reckless Boating Activities

Reckless boating activities, such as unnecessary speeding or indulging in activities like racing, are a clear violation of your boat insurance agreement. So, if the insurer finds out that your boat has been damaged due to such reckless activities, there’s a high chance that your claim may get denied.  

Additionally, being charged with BUI (Boating Under the Influence) can have serious consequences. Not only could your claim be denied, but your policy may be canceled altogether, as operating a vessel under the influence is considered a severe breach of responsibility and safety.

Does Boat Insurance Cover Sinking?

Yes, boat insurance does cover sinking. So, if your boat sinks, the wreckage removal coverage will pay the expenses to retrieve your boat and transport it to the repair shop. Depending on the cause of the accident, you can use collision and comprehensive coverage to cover the damages for repairing or replacing your boat.  

Who Needs Boat Insurance?

Whether you own a boat or rent one, it’s essential to ensure you have adequate boat insurance. For a better understanding, let’s break down this question into two perspectives: owning a boat and renting it.  

If you own a boat, it technically becomes your personal liability to cover any damages. For instance, even if you use the boat rarely, or on occasions, there’s still a risk of theft, vandalism, fire outbreak, or damage due to severe weather conditions.  

If you get involved in an accident while cruising the boat, you will have to cover the boat repair cost, and the medical expenses of you and your passengers. Plus, if you’re at fault for the accident, you will also be liable to cover the other boater’s repair costs and medical bills.  

On the other hand, renting a boat often requires proof of insurance, but let’s say you manage to rent one without being insured. So, if the boat gets damaged or if you end up in an accident, you will have to compensate the boat rental company, which could come at a hefty cost.    

The situation on the water is often unpredictable, and this could lead to minor to severe accidents. So, whether you’re boating for recreation or for commercial activities, it’s essential for you to have boat insurance. In a nutshell, anyone who uses a boat should have boat insurance.  

Learn More: Do You Have to Have Insurance on a Boat? 

The Bottom Line: Is Boat Insurance Worth It? 

If you compare the overall risks associated with owning, renting, and sailing a boat, it is definitely worth it to have boat insurance. While boat insurance financially protects you, it is also often required for financing a boat on loan, and even for renting one.  

So, if you’re interested in learning more about boat insurance, exploring the best coverage options, or purchasing boat insurance, you can use our online portal to find an agent nearby, or fill out the contact form for a free quote and consultation.

Frequently Asked Questions (FAQ)

What does typical boat insurance cover?

The typical boat insurance covers accidental damages, medical costs, liability expenses, and unprecedented incidents such as damage due to vandalism, severe weather conditions, and fire hazards. 

Does boat insurance cover hitting a rock?

Yes, it does, but only if you have the right coverage. While liability coverage won’t cover your boat damage due to hitting a rock, coverages like collision and comprehensive insurance are designed to cover you for these types of accidents.  

Will boat insurance cover a blown motor?

That depends, if the blown motor is due to an accident, then yes, your boat insurance should cover it.  However, if it’s due to wear and tear, then it won’t especially because this shows negligence on your part in properly maintaining the boat over time.  

Does boat insurance cover hitting another boat? 

Yes, boat insurance does cover hitting another boat.  If you accidentally hit another boat while it’s your fault, your boat’s liability coverage will pay for the repair costs of the other boat. If your boat gets damaged, the collision coverage will bear the repair and replacement costs.