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The personal property coverage of your homeowners policy might cover a small boat, motor and trailer (usually for $1,500 or less in physical damage). It should be noted that coverage for your liability risk is limited. Insurers generally provide liability insurance on small sailboats (26 feet or less) and powerboats with small motors (50 hp for inboard and inboard/outboard and 25 HP for outboard motors).

However, a boat of any significant size will be excluded from your homeowners policy for both property and liability coverage. In certain situations liability coverage can be added as an endorsement to a homeowners policy. 

Larger and faster boats, yachts, and personal watercrafts such as jet skis and wave runners require a separate boat insurance policy. For yachts, damage to the craft, including the hull, may be covered. These policies also provide broader liability protection. A boat insurance policy may cover:

  • Bodily injury - for injuries caused to another person

  • Property damage - for damage caused to someone else's property

  • Guest passenger liability - for any legal expenses incurred by someone using the boat with the owner's permission.

  • Medical payments - for injuries to the boat owner and other passengers.

  • Theft

Most companies offer liability limits starting at $15,000 and can be increased to $300,000. Typical policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Additional coverage can be purchased for trailers and other accessories. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.

The type of vessel, the horsepower of the engines, the value of the vessel, and the location where it is kept are all factors in determining coverage and premium.

Another variable influencing the cost of boat insurance is the water where it's used. Sailing in the Caribbean is generally riskier than sailing a quiet lake. The Insurance Information Institute suggests that boat owners discuss this with their insurance agent or company representative to protect their boat and determine their coverage needs.

Boat owners should also find out about the following discounts:

  • Diesel powered crafts. It is less hazardous than gasoline since it is less likely to explode.

  • Coast Guard approved fire extinguishers.

  • Ship-to-shore radios. 

  • Two years of claims-free experience. 

  • Multi policy with the same insurer, such as a car, home or umbrella policy. 

  • Safety education courses, such as those offered by the Coast Guard Auxiliary (, U.S. Power Squadrons (, and the American Red Cross (

To be a safer boater, the U.S. Coast Guard suggests that you:

  • Get a free vessel safety check by calling 1-800-368-5647 or visiting

  • Monitor the weather forecast and let someone know where you're going and when to expect you.

  • Check engine, fuel, electrical and steering systems, especially for exhaust-system leaks.

  • Keep marine-type fire extinguishers accessible and in condition for immediate use. Make sure they are matched to the size and type of the boat.

  • Equip the vessel with required navigation lights and with a whistle, horn or bell. Consider additional safety devices, such as a paddle or oars, a first-aid kit, a supply of fresh water, a tool kit and spare parts, a flashlight, flares and a radio.

  • Make sure that every person on board the boat wears a life jacket and don't permit riding on the bow, seatbacks or gunwales. Every year, 80% of boater fatalities are attributed to a missing life jacket.

  • Never boat under the influence. In 2001, alcohol was involved in more than one third of all boating fatalities.

Some other questions to ask your agent before putting your boat in the water:

  • Does my policy have adequate liability limits?

  • Who does the policy cover to operate the boat or personal watercraft?

  • Is the towing of skiers or tubes covered by my policy?