How Does It Work?

This type of insurance is often required by law, and the laws may specifically state coverage requirements for specific sizes and types of vessels as well as for the type of waterway that the boat is used on. All boaters should understand the legal coverage requirements in their area before getting on the water. Be aware that some boat lenders also have additional insurance requirements that you may need to meet if your boat is financed. These requirements set a minimum threshold for the amount and type of insurance that you should purchase, and many boat owners take the additional step of buying extra coverage.

When you use your boat, you must take financial responsibility for any damages or expenses that you create for others. This includes boat and property repair costs, medical expenses for injuries, and more. To ensure that you have the financial means to pay for these expenses, many local laws require a boat insurance policy to include liability insurance. Liability coverage only pays for others’ expenses that you are liable for. On the other hand, boat lenders usually require coverage that pays to repair or replace your boat. This is because they want to protect the value of the loan collateral. Some of the other types of coverage available for your boat include towing or trailering insurance and coverage for the personal contents on your boat.

After you set up coverage that meets the minimum requirements in place, you can opt to increase coverage limits or buy additional coverage types. You also can select a reasonable deductible amount. Remember to review and update your coverage periodically to confirm that your boat is always adequately insured.