Contrary to popular belief, boating accidents are not a rare occurrence. According to the US Coast Guard, there were nearly 5,300 watercraft accidents in 2020 alone, resulting in over $60 million in property damage and 767 fatalities.
Even though these numbers are little compared to road accidents, no one can predict when a catastrophe will strike. However, this doesn't mean you can't prepare yourself by purchasing the best boat insurance for your watercraft.
Marine or boat insurance is a type of specialty insurance that protects owners from financial losses due to boating accidents or natural disasters. Like car and health insurance policies, marine insurance policies vary widely in terms of cost and coverage. However, every company offers liability coverage and covers any physical damage to your vessel.
In this post, we’ll cover the different types of boat insurance and answer some of the most frequently asked questions regarding insurance factors, boat insurance costs, and the most popular insurance companies in the country.
The best boat insurance companies in the US offer personalized coverage policies. These insurers have been around for a while and have a solid reputation in the market.
More importantly, they have strong financial standing, modernized infrastructure, an in-depth understanding of maritime law, and vast experience in the boating industry.
While there are more than 20 commercial boat insurance companies, we’ve selected eight insurers that offer the best boat and marine insurance policies in the country.
The Markel Corporation is a specialty insurance company that has been in the business since 1930. It’s the go-to choice for professional anglers as it offers comprehensive insurance policies for boats, jet skis, yachts, and other personal watercraft, along with replacement cost coverage for an agreed-upon value of the fishing equipment.
As one of the industry leaders in the market, Markel provides personalized coverage, with policies starting at just $100 per year.
Markel offers several additional perks in the form of discounts for multiple boats, outboard propulsion, diesel engines, and experienced boaters.
Even though the company operates in all 50 states, it doesn't offer the same policies in every location. It also doesn't provide any mobile application, so users have to use the website.
Allstate is one of America’s most popular and largest insurance companies. It’s regarded as the go-to option for cheap boat insurance with multiple discounts, excellent customer service, and a user-friendly website.
The company also offers a variety of payment options that fit your financial situation, with some policies costing as low as $25 a month. Moreover, if you already have a homeowner or car insurance policy with the company, you can bundle it with Allstate boat insurance and save up to 20% on the total amount.
Allstate boat insurance provides excellent customer service through the website or local agents.
In addition, the website contains valuable information for new boaters, including blog posts on maintenance, course of actions after an accident, or offseason paperwork handling.
As far as limitations go, some coverage policies and discounts are unavailable in certain locations, especially those areas prone to hurricanes and storms.
The Nationwide boat insurance company has been in the insurance business since 1926, offering home, boat, vehicle, and life insurance policies.
One of the best features Nationwide offers is bundling discounts as well as optional towing, roadside assistance, and rental reimbursement coverage. It’s also an ideal option for professional anglers with a limited budget as the company allows them to get coverage for fishing equipment from $1,000 to $10,000.
Thanks to its partnership with Plenti, policyholders can earn points and use them to get discounts in multiple stores, such as ExxonMobil, Rite Aid, Southeastern Grocers, etc.
Nationwide has maintained a solid online presence through its website and mobile app, staying ahead of many competitors, especially when catering to a younger audience.
The only major downside is contacting a local agent to obtain a quote, which can take time.
Foremost is a subsidiary of Farmers Insurance Group of companies. It has been in the boat insurance business since 1952.
What makes this company stand out from most competitors is the additional coverage policies it offers on top of affordable general options in all 50 US states. They include enhanced towing services, pollution liability coverage, hurricane haul-out, and fishing tournament fee reimbursement.
Therefore, it’s the go-to option for people looking for the most comprehensive coverage, especially on the East coast, which is more susceptible to hurricanes and storms.
Foremost boat insurance company offers several types of discounts, including:
The only major limitation of the company is that it doesn’t provide its services to applicants with poor credit. As a result, people with average scores usually pay a higher premium than those with excellent scores.
Progressive insurance is among the most popular car and homeowner insurance companies in the US. It also has an excellent reputation for offering a variety of comprehensive boat insurance policies at competitive prices.
What makes this company stand out from the rest is its discounts and reward programs for safe boat owners with different types of personal watercraft, up to 50 feet long and up to $500,000 in value.
The insurer decreases deductibles for every period you remain accident-free. In addition, new policyholders receive small accident forgiveness for Progressive boat insurance claims of less than $500. The forgiveness amount increases for customers who remain accident-free for three years.
The most popular additional perk the company offers is the advanced quote discount that allows policyholders to sign up for coverage at least 24 hours before it goes into effect.
Moreover, unlike most companies, Progressive doesn’t have any restrictions for policyholders regarding where they can or cannot sail their watercraft. The only limitation is that the vessel has to be within 75 miles of the US coast as that is the range of Progressive boat insurance towing and other emergency
State Farm is one of the oldest and most reputable insurance companies in the US, offering homeowners, life, car, and boat insurance since 1922. However, the company has made a name for itself in the industry not for its liability or property damage coverage but its emergency service coverage, protecting policyholders from common risks like hurricanes, storms, collisions, explosions, theft, and more.
More importantly, this coverage doesn't only apply to permanently attached equipment on the watercraft but also the accessories, such as furniture, canopies, seat cushions, and upholstery.
Lastly, the company also takes great pride in providing its services to more types of watercraft than most competitors, including houseboats, kayaks, canoes, bass boats, cruisers, and sport boats.
Additional Perks and Limitations
For policy buyers seeking the best company with the best emergency services in case of an explosion, fire, capsizing, stranding, or sinking, State Farm is the clear winner. The company also offers boat insurance for boats over 30 years old and protects newly-acquired watercraft until you can add all the required policies to it.
United Marine Underwriters is a leader in the marine insurance industry and a subsidiary of Allianz, one of the world’s largest insurance companies. It specializes solely in sailboat, yacht, charter boat, and personal watercraft insurance. As a result, it provides personalized service to each customer.
The company has been in the business since 1990, offering its services in every state except New Mexico. Liability limits are available up to $1 million.
United Marine Underwriters is also the go-to choice for many international boaters as it provides coverage in Canada, the Bahamas, and Mexico.
The biggest additional perk United Marine Underwriters offers is a primary service agent who will take care of all your insurance needs. For customers with high service expectations, this is the company to consider.
As far as limitations are concerned, the company doesn't offer too many additional coverage policies, which can be a deal-breaker for professional anglers and regular boaters.
BoatUS is a recently acquired subsidiary of GEICO that has been in the boat insurance business since 1966. It’s the go-to choice for boaters due to its exceptional claims service.
The company offers policies for different types of personal watercraft and yachts in all states. In addition, by becoming a BoatUS member, you can avail several additional benefits, such as discounts on fuel, slip fees, fishing equipment, and charter cruises.
By purchasing a BoatUS Unlimited Gold Towing membership for $179, policyholders get paid 100% for dock-to-dock tows for repairs. In addition, the policy contains reimbursement of up to $3,000 for tows outside of TowBoatUS coverage area. There are also packages that include saltwater and freshwater towing.
Before discussing the typical boat coverage, you first need to understand what factors can affect your rates.
Although marine insurance is a wide-ranging market, many homeowner policies either provide limited coverage or don’t cover all the marine-specific risks and hazards, such as explosions, sinking, salvage work, pollution, wreck removal, etc. Even those covering these risks limit the policies to smaller boats and motors, usually between 25 to 100 horsepower.
Moreover, companies that offer full coverage can vary significantly in terms of cost, service quality, and customer service. Plus, each insurer considers different eligibility factors, so it's not just about you picking them but also about them picking you.
Here are some of the factors commercial boat insurance companies consider:
Boat insurance can be subcategorized into two basic types:
An agreed value policy is a type of boat insurance where you and your insurer agree on the value of your watercraft when you take out the policy.
An actual cash value policy, in contrast, only pays up to the actual cash value of the watercraft at the time of the damage or any partial loss. The insurers offer this policy to the owners of older boats as it allows them to save money due to depreciation.
Marine insurance covers several types of watercraft, including boats, PWCs, yachts, sailboats, rentals, boat clubs, professional marine services, etc. However, the policy you opt for depends on how and where you boat.
People usually go for minimum liability coverage like car owners. However, it’s recommended to choose an "all-risk” policy that includes all the essential coverage with additional coverage for wear and tear, denting, manufacturer defects, and emergency services like towing and roadside assistance.
Depending on the type of coverage, your policy may cover all physical damages along with theft and loss of items. However, most policies don’t cover the cost of towing a boat if it gets damaged in the water.
Although getting boat insurance isn’t legally required by any state, it’s recommended that you buy at least minimum liability coverage.
Boat insurance also covers property damage, and since it’s affordable, it can save you a lot of money in the long run, especially if you own a boat on the East Coast, where storms and hurricanes are more common.
Yes, boat insurance includes liability coverage, which pays for damages or injuries caused by your vessel to another boat and people on board.
Boat insurance typically covers physical damages to the boat along with property damage, theft, medical payments, and liability. However, each coverage comes with a specified deductible determined by your insurance company. You can also opt for additional coverage, such as towing, fishing equipment coverage, hurricane haul-out, boat lift, etc.
After reading this article, you probably realize that boat insurance is not too different from homeowners, car, or life insurance, as insurers consider many factors before determining your eligibility.
In addition, insurance companies vary significantly in terms of coverage and cost, so it's a smart idea to shop around to get the best boat insurance coverage for your needs.
The best coverage for your boat depends on several factors, including the type and age of the watercraft, boat club memberships, cost, number of owners, overall condition, etc.
For example, Markel boat insurance offers the best coverage for anglers, such as watercraft liability, pollution liability, trailer, crash damage, theft, theft away from home, and discounts on multiple boats, diesel engines, and outboard propulsion.
On the other hand, Progressive boat insurance only covers boats up to 50 feet in length.
The general rule of thumb for insuring your boat is to pay at least 1.5% of its value so you can get a better than a minimum policy. For instance, if your boat is worth $40,000, you’ll need to pay about $600 at this rate. However, if you own a more expensive boat or yacht, you should pay around 2%–5% of the cost.
The two most common other coverages you can find with boat and yacht insurance policies, along with physical damage coverage, are emergency towing & assistance coverage and personal property coverage. Some people also like to buy extra coverage for medical payments, theft, uninsured boaters liability, trailer, and boat accessories.
Many boat insurance companies allow anyone to operate a vessel if the owner has permitted them to do so. However, there are exceptions for sailboats, high-performance boats, and luxury watercraft, so you should always check your policy. Moreover, adding many additional drivers can often result in higher premiums.
In this scenario, you can ask your insurance agent if the company offers “lay-up” discounts. This discount is applicable for months when your watercraft is in dry storage due to winter or any other reasons. This way, you will have year-round coverage while paying less when your boat isn’t running.
Yachts typically fall under the large watercraft category since they can easily be over 27 feet in length. Boats, in contrast, are 26 feet or smaller, and therefore, their coverage isn’t as broad or as specialized since they cost less, travel fewer distances, and carry fewer people on board.
A yacht policy typically comprises two main sections.
The first is hull insurance, which covers all direct risks and damages to the yacht’s hull. This policy includes an agreed-upon amount based on the vessel’s value, which will be paid in case of an accident or damage.
The second type of policy is a true yacht policy, which includes replacement cost coverage on cosmetic or minimal issues. However, it doesn't cover sails, outdrives, batteries, and canvas since these parts depreciate over time.
Regardless of which option you choose, the liability coverage should include protection and indemnity insurance, as an uncovered loss in this area could cost hundreds of thousands of dollars in the event of damage.
A yacht policy generally carries a percentage of the insured value deductible. For instance, if the total amount insured is $250,000, a 1% deductible would equal $2,500. In most cases, lenders will only allow up to a 2% deductible, and you should avoid companies offering 10% or more.
Apart from liability coverage, the other coverages you can expect in your policy include medical payments, personal effects, uninsured boaters liability, towing and assistance, fishing equipment, and hurricane haul-out coverage.
Breach of warranty is another type of coverage that protects the lienholder's interest in your watercraft. However, it will simply pay off the balance owed in the damages and nothing more.
For example, a breach of warranty could include using your boat for commercial purposes instead of pleasure or going outside your navigational limits after promising the insurers you won't. Not only can this take your boat away, but you can end up paying for the boat you cannot use.
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