A Complete Guide to Boat Insurance

boat insurance guide

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Summer has arrived in full swing in central Texas and Lake Travis is nearly at full capacity. Outings on the lake with family and friends are favorite summer pastimes, and responsible boat owners should have insurance to protect their passengers, boat, and assets. Fortunately, boat insurance is relatively inexpensive and very similar to auto insurance. In fact, many insurance companies offer bundling discounts on boat insurance if you have multiple lines of insurance with the same insurance carrier.

Basic Boat Insurance Coverages:

Liability Coverage

Similar to auto insurance, liability coverage is a the most important coverage of your boat policy, and will protect you when you are responsible for bodily injuries or damages from a boat accident.  For example, if you damage someone’s boat, or if someone on either boat is injured, your liability insurance will kick in and cover the damages (after you pay your deductible).

Full Coverage

The term “full coverage” is misleading, as there is no such thing as being “fully covered” in every situation. “Full coverage” typically means that you have collision and comprehensive coverage on your policy, and once you pay your deductible, your insurance will repair your watercraft and bring it to the condition prior to the loss.

Related Article: The “Full Coverage” Myth

Comprehensive and Collision Coverage

If you have collision coverage, your insurance company will repair your boat or watercraft after an at-fault accident after you pay your deductible.  Comprehensive coverage protects your boat if it is damaged by a peril other than collision, such as hail, theft, or windstorm.  Once again, you are responsible for your deductible, and your insurance company will pay the remaining balance to repair your boat.

Optional Watercraft Coverages

There are also a few insurance coverages you can add to your policy that are optional, such as towing. You could think of towing coverage as the boating version of roadside assistance; this coverage will cover the cost of a tow or boat-side assistance. You may also choose to insure specific valuable items that are stored or installed on your boat in the case of damage or theft.

A common misconception is that if you own an inexpensive boat, you don’t really need boat insurance; however,  if you care about passengers and boat and have assets to protect, you should have liability coverage, as you could be held personally liable for injuries caused from an at-fault boating accident.

Uninsured Watercraft Coverage

Uninsured watercraft coverage is comparable to uninsured motorist coverage.  If you do not have uninsured watercraft coverage, you and your passengers will not have bodily injury coverage if injured by an uninsured boater.

Related Article: Uninsured Motorists

If you are considering getting your boat insured, it is also good to know which companies will insure your specific boat. For example, many insurance companies will not cover a boat that is over 20 years old. Generally, insurance companies place watercraft(s) into three categories:

  1. Boats: under 25 feet, 11 inches in length
  2. Yachts: generally 26 feet or more in length
  3. Personal watercraft: jet skis, wave runners, etc.

All of these categories require different insurance policies. Of course, the policies themselves depend on the insurance company.


It is important to have boat insurance to protect yourself, your property, and anyone in your boat who might be injured. Boat insurance and auto insurance are similar, and if you understand the basics of your auto policy, you will understand the basics of boating insurance.

Once you know you are protected, you can relax on your boat and catch some rays!

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Cheri Roman
Cheri Roman
I’m a graduate of the University of Texas & have a master’s degree in Business Administration from Texas A&M University, Corpus Christi. As a former teacher, I believe in educating my clients about insurance and investment options, and partnering with them to protect their family and achieve their financial goals.

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