How Much Does Boat Insurance Cost? (3 Helpful Examples)

In Boating by Christopher Schopf

Boats can be expensive assets and many finance companies will insist that the new owners get them insured.  Even if people buy their boats outright, they often decide to get them insured anyway.

So how much does boat insurance cost?

 

3 Typical Boat Insurances Cost Examples

As we will look at in a second, there are a lot of factors that go into boat insurance so it is impossible to tell you this without knowing all of these factors.

However, here are a few basic examples I found from other boaters around the web.

  1. 2003 Scout 242 Abaco with a 225 HP Yamaha motor in Northern California.
    Hull value of $70,000.00.
    The owner has full coverage and is paying $658.00 a year for insurance.
  2. 1963 Bertram 25 with two 135 HP motors on Orange Beach Alabama.
    The value is $55,000.00 and the owner is paying $583.00 annually.
  3. 2008 MayCraft 2000cc with a replacement value of $26,000.00
    The boat is located in Delaware and the owner is paying $348.00 a year.

10 Factors That Impact Boat Insurance Costs

Guy doing an inspection of a tiny house on wheels

Boat insurance costs will vary based on many different factors.

These factors include:

  1. The type of boat being insured.
  2. The value of the boat being insured.
  3. The intended use of the boat.
  4. The location of the boat.
  5. The age of the boat.
  6. The size of the boat.
  7. The size of the engine on the boat.
  8. The number of owners of the boat.
  9. How often the boat is used.
  10. The type of policy being purchased.

Let’s dive into each of these.

1) Type of Boat

The type of boat you have will greatly affect how much insurance you need and how much it will cost you.  Unpowered boats without sails are less likely to have issues while out on the water.  This is because they don’t have engines that can malfunction and they’re less likely to head out into rough seas or large bodies of water.

A boat with an inboard engine will be more expensive than a boat with an outboard engine.  This means that all-things-equal, a boat with an outboard engine will cost less to insure.

Boat types that are rarer are also more expensive to insure.  For example, a catamaran will be more expensive to insure than a monohull boat.

2) The Boat’s Value

The more expensive the boat, the more expensive it is to ensure the boat.  This is especially true if you’re financing the boat.  The reason for this is that your financing company will demand that you get an insurance policy that will cover the loan even if the boat is completely destroyed.

Unfortunately, boats depreciate quickly and often-times the value of the boat will be less than what is still owed on the boat line.  As a result, the boat owner will need to get an insurance company policy that will allow for this difference.  Many companies will refer to this as an “agreed-upon price” policy.

This means that the insurance company and the boat owner will agree on a price payout for the boat should it suffer catastrophic damage.  In this case, the owner can have the agreed-upon price match the remaining balance of the loan.

3) The Intended Use of The Boat

A boat’s intended use can also determine how much the insurance company will charge a boat owner.  This is especially true if the boat is being used for commercial purposes.

For example, a commercial fisherman or lobster hunter will usually pay a lot more for insurance than a person who is using their boat recreationally.  This is especially true if the person is using their boat as a charter or ferry boat.

Even the types of activities that will take place on the boat can affect the pricing of the insurance policy.  For instance, a tour boat that serves alcohol will have a higher risk profile than a boat that does not.  In this case, the boat owner may have to add additional insurance riders onto their base plan.

4) The Location of The Boat

Some areas of the world are more dangerous to boat in than other areas.  The insurance plan you get will reflect this.  For instance, a person using their boat off the coast of Alaska is far more likely to suffer damage to their boat than someone who is using their boat in a sheltered inlet in New Jersey.

Even the areas that the boat will be driven through can change the cost of insurance.  For example, a boat owner in Philadelphia who is using their boat in New Jersey will have to drive through the city to get to their destination.  This increases the chances that the boat will be in an auto accident and thus increases the cost of insurance.

5) The Age of The Boat

Insurance companies will always ask you the age of your boat.  They may also ask you the age of the motor as well.  An older boat may not be worth as much as a newer boat, however, it may be more prone to breaking down.  Because of this, you may find that a slightly older boat is more economical to insure than a brand new boat or an older boat.

If you’re wondering why a boat that is more prone to breaking down might cost more to insure, there are two reasons for this.  The first reason is that a boat insurance policy usually includes towing with it.  Towing a boat to safety can become costly.  The second reason is that an older boat may be more likely to sink.  In some areas, the insurance company may cover the cost of recovering the boat from the water.  Boat recovery is often very expensive.

6) The Size of the Boat

In general, a larger boat will cost more to insure than a smaller one.  This is because there are more things that can go wrong on a larger boat.  Also, larger boats are usually more expensive in general, so you’ll need more insurance to cover the boat in case it needs to be repaired or replaced.

On top of this, any boat that is larger than 26’ may be considered to be a yacht.  Insurance companies will always charge more to insure a yacht over a standard boat.

One other thought to keep in mind too is that very large boats can’t be easily trailered or towed.  In this case, the insurance company will want to know where and how the boat is being stored so that they can adjust the cost of the policy they write for you.

7) The Size of the Engine

A boat’s engine size will also dictate how much insurance is needed to cover the boat.  Larger engines cost more to maintain, repair, and replace.  In fact, some boats will have more than one engine on them.

When a boat with multiple engines is destroyed, all of these engines need to be replaced.  Insurance companies will want to take this into account when they write up their policy.

8) The Number of Owners of the Boat

Insurance companies will also ask how many people own the boat.  This is because a boat with multiple owners is more likely to be used.  It is also more likely to be abused as well, which makes it more susceptible to damage.

They’ll also want to look into the history of each owners insurance records.  If one of the owners has made a lot of claims in the past then the insurance policy might increase because of that.

9) How Often the Boat is Used

A boat that is used on a regular basis has more opportunities to be damaged.  For this reason, many insurance companies will want to know how many hours the boat is used each month.  Boats that are used more often may have a higher premium than boats that aren’t.

4 Types of Policy on the Boat

A boat can be insured under a variety of different policies.  Before deciding on an insurance policy, you should carefully consider the different types of policies available.

The main policies that cover boats are:

  1. Homeowner’s insurance policies.
  2. Vehicle insurance policies.
  3. Marine insurance policies.
  4. Umbrella insurance policies.

1) Homeowner’s Insurance

People who store their boat on their property may be able to use their homeowner’s insurance policy to help cover it.  This is especially true if the boat is small and if it is stored inside the house or the garage.

For example, a kayak that is stored in the basement of a person’s house will be covered if the house burns down and the kayak is destroyed.

In fact, some homeowner’s insurance policies may even protect the kayak even if it is chained up at the home’s back dock.  However, the same rule might not apply to a larger boat that is kept down at a home’s back dock.

A homeowner’s insurance policy will often only cover up to $1,000.00.  This means that if your $700.00 canoe is stolen, your insurance company will reimburse you for it.

However, it also means that if your $35,000.00 boat is stolen, you’ll only be reimbursed $1,000.00 for it.

For this reason, most people will get an additional insurance policy to help cover their boat.

On top of this, a homeowner’s insurance policy cannot cover a boat that is out on the water or out on the road.  This means that a person will need to get another policy whenever they intend on using the boat.

Failure to do so will leave them out of luck should something happen to them.

Not only this, but a homeowner’s insurance policy isn’t going to cover things like towing.  Towing a boat that is stranded out on the water can get expensive.  Typically, a boaters insurance policy will completely pay for this service.

It might not always be needed, but it is nice to have when it is.

2) Vehicle Insurance

A vehicle insurance policy may help to cover a boat as well.  However, this only applies to the boat while it is being transported to the water.

For example, a person may get into an auto accident while towing their boat to a boat ramp.  If the person backs their boat into somebody else, the vehicle insurance will cover the cost of repairing the other vehicle that was damaged in the accident.

However, this same coverage will not cover the cost of repairing any damages that were done to the boat.

Some auto insurance policies may not provide any coverage at all for the boat owner.  These insurance companies will stipulate that the vehicle is not covered when a boat is being towed.

This is especially true when the vehicle is not rated to tow the boat they are attempting to tow.

For instance, a person has a small SUV that is capable of towing 3,500 pounds.  This person has a boat and trailer that weighs 4,700 pounds.  While towing the boat, the person loses control of the vehicle and causes an accident.  In this case, the insurance company may not want to pay out anything because they believe that the vehicle was not being used properly.

For this reason, it’s very important that you always use an appropriately sized tow vehicle to tow your boat.  You can get a feel for how much boats and trailers weigh by visiting our page titled, “how much do trailers weigh”.

3) Marine Insurance

The most popular type of insurance for a boat is marine insurance.

This type of insurance will cover a boat while it is on the road, in the water, in storage, or at home.

Location Impacts The Insurance Cost And Coverage

At Home

If your $35,000.00 boat were stolen from your home, a full coverage insurance policy would reimburse you for the $35,000.00 you lost.

In this case, you’d simply file a police report and a claim and you’d have your boat replaced.

On the Road

If you were to back into another car with your boat, a full-coverage policy would help you pay for the damages to both the other vehicle as well as your boat.  Your premium might go up after this accident, but at least you’d be covered.

In Storage

A person’s boat isn’t always kept at home.  Many people store their boats in storage facilities or even at the dock.  Marine insurance will help protect the boat even when it’s in storage.

For example, your boat is stored at a boatyard and the boatyard catches fire.  Unfortunately, the boatyard did not have proper insurance and they end up declaring bankruptcy.  In this case, your marine insurance should help you recover the cost of replacing your boat.

In the Water

A lot can happen to a boat while it’s out on the water.  Boat engines can break down and people will often need to be towed back to town.  As we said earlier, towing is expensive and oftentimes the coast guard will send boat owners a bill for this expense.  Marine insurance will usually cover this for a small fee.

Another situation that often happens is that boats collide with docks, other boats, and even the ground.  This can cause considerable damage to the boat, but luckily marine insurance can cover this as well.

One thought to keep in mind with all of this, however, is that boat owners living in coastal regions will need to have a plan to deal with hurricanes.

n fact, many insurance companies will demand that a person have a hurricane plan for their boat already in place.

For example, a person might say that they’ll put their boat in a storage facility further inland before a hurricane hits.  Alternatively, they may make plans to bring the boat to an area that is not affected by the hurricane.  Either way, the person will need to follow their hurricane plan or they’ll forfeit their right to collect any damages incurred as a result of the hurricane.

As you can see, marine insurance is the most comprehensive insurance that a person can get for their boat.  For this reason, most people with boats valued at over $1,000.00 should get marine insurance.

Umbrella Insurance Policies

Another policy that people can get for their boat is an umbrella policy.

An umbrella policy basically protects anything a person wants to protect.

These policies are usually very specific and everything that the person wants to guard against will need to be negotiated between them and the insurance company.

Self-Insurance

Some people opt not to get any insurance at all.  In this case, they are basically insuring themselves.  This might not be a bad idea for people with inexpensive boats without power.

The average person can realistically expect to be able to replace a $300.00 kayak if it happens to be destroyed or stolen.

This being said, sometimes self-insurance is a bad idea.  For example, a person with a larger boat might hurt someone with it while out on the water.  In this case, they could be open to a high-priced lawsuit.

Having an umbrella insurance policy or a marine insurance policy would help them fight against any potential lawsuits that might come their way.

Final Thoughts

My recommendation would be to call a few places and get quotes for marine insurance.  Ask detailed questions and compare plans and prices until you get the best deal for you and your boat.