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

Boats are expensive assets, and many finance companies insist that new owners have insurance.

Even if people buy their boats outright, they often decide to insure them anyway.  

So how much does boat insurance cost?  Let’s find out!

3 Typical Boat Insurances Cost Examples

As we will see in a second, many factors go into boat insurance, so absolutely knowing the costs ahead of time isn’t possible. 

However, you can estimate annual costs based on 1.5% of the boat’s value. 

So a $100,000.00 boat should have an annual insurance cost of $1,500.00.  Individual factors will come into play, but, in general, the 1.5% rule is reasonably accurate for estimation.

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

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.

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.

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.

12 Factors That May Impact Boat Insurance Costs

Guy doing an inspection of a tiny house on wheels

Boat insurance costs will vary based on many factors.  Insurance companies use their own expertise to determine which factors they use and how they are weighted.

These factors may include but are not limited to:

The type of boat being insured.

The value of the boat being insured.

The intended use of the boat.

The location of the boat.

The age of the boat.

The size of the boat.

The size of the engine on the boat.

How often the boat is used. 

The owner’s years of boating experience.

The owner’s credit history

The owners boating safety education

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 cheaper and less likely to have issues while out on the 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. Rarer boat types 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 insure.  This is especially true if you’re financing the boat.

Your financing company will demand that you get an insurance policy that will cover the loan if the boat is damaged or destroyed.

Unfortunately, boats depreciate quickly, and often, the boat’s value will be less than what is still owed.  As a result, the boat owner will need to get an insurance policy that will cover the difference.

Many companies will refer to this as an “agreed value” 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.

Another option is a “market value” policy.

With a market value policy, the insurance company will reimburse you based on the boat’s current market value.  In most cases, the current market value will be less than the value you originally paid.

Make sure you know which type of policy the insurance company is offering before you sign.

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 uses 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 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 reality.

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 uses 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 uses 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 insurance costs.

5) The Age of The Boat

Insurance companies will ask you the age of your boat.  They will also ask you the age of the motor.  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 a much 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.  First, an older boat is more likely to sink.  Second, recovering a broken down boat is expensive. 

Insurance policies normally cover the recovery of broken-down boats, making the policy on older boats more expensive.

6) The Size of the Boat

In general, a larger boat will cost more to insure than a smaller one.  This is because more things 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 if 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 huge 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.

If your boat has multiple engines, this will incur more insurance costs.

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

8) How Often the Boat is Used

A boat that is used regularly 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.

9) The Owners Years of Boating Experience

If you are new to boating, expect to pay more for insurance. 

Unfortunately, new boaters are at higher risk for accidents.  This fact will raise your insurance rates.

10) The Owners Credit History/Insurance Score

The insurance company will do a “soft” credit history check. 

This means that their inquiry will not show up on your credit, but they will know your history. 

They will use this information to determine how much your premiums will be on your policy. 

Any history you have with other insurance companies will also come into play.

11) The owners boating safety education

Taking a boater’s safety course will lower your rates for insurance. 

Make sure that any course you take is accredited.

12) The type of policy being purchased.

We recommend that you buy marine insurance designed to cover property and injury-related specifically to the boat. 

However, your boat may be covered by different types of policies. 

Here are 4 types of policies that may apply:

  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 should the worst happen.

This is especially true if the boat is small and stored inside the house or the garage.

For example, a kayak 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 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.

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 may reimburse you.

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.

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 damaged in the accident.

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

Some auto insurance policies may not provide any coverage at all for the boat owner.

These insurance policies will stipulate that the boat is not covered when being towed.

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

For this reason, you must 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 a 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, depending on the type of policy.

In this case, you’d 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.

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.

However, one thought to keep in mind is that boat owners living in coastal regions will need to have a plan to deal with hurricanes.

In 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 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.

4) 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.  Umbrella policies are normally only offered to loyal customers or people with a long term record of no incidents.

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 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.

Discounts

There are several ways to obtain discounts when shopping for insurance.  Discounts will vary by the insurance provider, but most offer discounts if you bundle, take a boater safety course, or have additional safety equipment installed.

The primary way to obtain discounts is to bundle your boat insurance with your home and car insurance.  Most insurance companies offer discounts to those who have all of their policies with the company.

Another way previously mentioned is to take a boater safety course.  Many courses are offered online and will not only give you valuable information and skills, but they also will give you a discount on your boat insurance.

Many discounts are based on added safety equipment.  From anti-theft devices to depth finders, the equipment you have installed matters, so make sure to tell your insurance agent everything about your boat.

Other discounts may be granted if you are married or own a home. 

Final Thoughts

My recommendation would be to call a few places and get quotes for marine insurance.  It is best to start with the same company that insures your home or car.  Insurance agents are also a great place to get information.  Always ask detailed questions and compare plans and prices until you get the best deal for you and your boat.

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