How Much Insurance Coverage Should I Have on My Boat?

Unlike automobile insurance,  required by law of all vehicle drivers in North Carolina, boat insurance is not required except for a small fraction of boat owners. This includes commercial fishing and those using their boats for a charter business or for guided fishing tours. Some marinas may require that you have boat insurance in order to utilize their moorage facilities. Additionally, if you've purchased your boat with a loan and the boat is used as collateral, the lending institution will almost certainly require that you maintain a certain amount of insurance on your boat in order to protect their financial interests.

Who Else Should Get Boat Insurance?

Even though not required, it makes good sense to carry insurance coverage for your boat, particularly liability protection. Any type of watercraft can be insured, from the smallest rowboat or canoe to the largest sailboat or motor yacht. Generally speaking, the larger and more powerful your boat the more coverage you should consider. Bigger boats and more powerful boats are associated with higher risk, which should be taken into account when researching your watercraft insurance needs.

Speedboats and watercraft used for pulling water skiers have inherently heightened risk for both accidents and liability incidents and should be covered by enough boat insurance to pay for damages to both properties and for bodily injuries. Some experts suggest that a million dollars of liability coverage should be considered. Typical parts of a boat insurance policy may include:

• Liability for property damage – pays toward repair or replacement of a third party's property due to an accident caused by you or your boat
• Liability for bodily injury damage – pays toward injuries sustained by others in an accident deemed to be your fault
• Collision damage – pays toward repair or replacement of your boat after an accident
• Hull coverage – pays toward damages suffered by your boat and, typically, your trailer, motor, accessories and equipment
• Fuel spillage – pays towards and cleanup of any fuel spills caused by you or your boat

How Much is Too Much?

There are lots of options for boat insurance policies, many of which are written specifically to the insured. Only buy the coverage you need, but make sure you're covering your legal and contractual requirements and enough coverage to satisfy your need to be comfortable to your risk exposure. A qualified agent or broker can help you determine these things.