Boat Insurance Basics: What’s Covered?

Boat Insurance Basics: What’s Covered?

Boat Insurance Basics: What’s Covered? Learn about boat owners’ insurance and what coverage means to you.

Did you know that boat insurance is one of the oldest forms of insurance known? The ancient navigators knew from their own experience the risks that life at sea entails and they tried to insure their boats against hurricanes and other unpredictable factors such as the weather and the waters. And this is still true today.

Boat insurance policies can vary widely in what they do or do not cover, based on a number of considerations, including the type of boat, the waters it will be transiting, and how many months of the year the boat will be used. However, there are some basic types of coverage you can expect to receive, as well as some possible discounts for safe boaters.

physical damages

This coverage insures your boat against loss and damage caused by common risks, such as sinking, fire, storms, theft, and collision. Covered property can vary, but the policy will generally cover the hull and other components, such as:

  • engines
  • additional fuel tanks, batteries, etc.
  • anchors and
  • safety equipment on board, such as flotation devices and fire extinguishers.

The boat trailer may or may not be covered, depending on the policy. Talk to your agent to determine if your boat insurance policy covers your trailer.

When choosing your policy, be sure to ask if you will be insured for the replacement cost of the boat or its actual cash value. The replacement cost policy will reimburse you for the cost of repairing the boat to return it to its original condition or the cost of replacing it with one of the same or similar model. The current cash value-based policy will reimburse you for the current market value for the boat’s repair or replacement (that is, the original price less depreciation). Some insurance policies may include settlement of losses at agreed value for situations involving total loss claims. This ensures that you will receive the policy coverage limits if your boat is determined to be a total loss.

Liability coverage

This coverage applies if your boat causes injuries to third parties or damages to other boats, docks or structures. Please note that injury or damage may be due to direct contact with your boat or situations caused by your boat, such as large wakes. Boat liability coverage generally protects you against covered claims and lawsuits, including expenses such as paying settlements and legal fees. Be sure to talk to your agent about your needs and potential risks so you can purchase the coverage that’s right for you.

Other Coverage

Your insurer may offer additional types of coverage with your basic boat insurance. The State Farm®Boat Insurance Policy provides coverage for medical payments for covered injuries sustained by the insured or their guests. If you have other needs, ask your insurance agent what coverage is available.


The best way to lower your boat insurance premiums is to become a safer boater. For example, many insurers offer discounts to boaters who have completed an approved boating safety course. You may also be eligible for a lay-up discount if you don’t use the boat year-round or a discount for sailing in freshwater instead of saltwater. Check with your agent for more information.

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