Your First Boat: Your Guide on Boat Insurance

Congratulations! Your First Boat Adventure Begins

If you’re here, it means you’re buying your first vessel—congratulations! Welcome to the exciting adventure of boat ownership. Whether you’re looking forward to relaxing weekends on the water or exploring new destinations, owning a boat brings a whole new world of experiences. But before you head out on your first trip, let’s talk about something that’s just as important as your new boat—insurance.

As a marine insurance broker, I’ve helped countless new boaters understand what coverage they need. Here’s what you need to know about protecting your new purchase the right way.

Is Boat Insurance Required?

One of the first questions I get from new boat owners is, “Do I have to have insurance?” The answer: it depends. Unlike auto insurance, boat insurance isn’t typically required by law. However, there are situations where insurance might be mandatory:

• If You’ve Financed Your Boat: Lenders will almost always require you to carry insurance until the loan is paid off.
• If You Store Your Boat at a Marina: Many marinas require boaters to have insurance, and they’ll likely ask to be listed as an additional insured. This protects the marina in case something happens while your boat is in their care.

Even if insurance isn’t required, I highly recommend it. Boats are a big investment, and having the right coverage ensures you’re protected against accidents, weather damage, theft, and more.

Boat Insurance vs. Auto Insurance: The Key Differences

If you’ve had auto insurance, you might expect boat insurance to work the same way. There are some similarities, but the key differences can make a big impact on your coverage:

• Agreed Value vs. Actual Cash Value (ACV): With boat insurance, most policies offer agreed value coverage, which is a big advantage for boaters. This means that if your boat is a total loss, you’ll receive the full agreed value, with no depreciation. For new vessel purchases, we can insure your boat for the purchase price, and if it’s a brand-new boat, you may also qualify for replacement cost coverage during the first couple of years. This means that in the event of a total loss, your boat will be replaced with a new one of the same make and model—a huge benefit for first-time buyers.
• On-Water Towing: Just like roadside assistance for your car, boat insurance can include on-water towing coverage. Some companies reimburse you for towing expenses, while others offer no out-of-pocket options by arranging a towing provider for you. Towing a boat can be expensive, so this coverage is essential.
• Specialized Coverage: Boats face unique risks, like environmental damage from fuel spills or marina accidents, that cars don’t. That’s why specialized boat insurance covers things like fuel spill cleanup, on-water towing, and damage while your boat is docked at a marina.

Fuel Spill Coverage: What You Need to Know

Fuel spills are one of the unique risks boaters face. Cleaning up a fuel spill can be expensive, but luckily, most boat insurance policies include fuel spill coverage. However, this coverage can vary between policies:

• OPA 90 Coverage: Some policies cover fuel spills under the Oil Pollution Act of 1990 (OPA 90), with coverage up to $1,076,000.
• Property Damage Liability Limit: Other policies may only cover fuel spills up to your property damage liability limit, which can be much lower. Understanding how your policy handles fuel spills is crucial to avoid unexpected out-of-pocket costs.</li>

Common Mistakes New Boat Owners Make

One of the biggest mistakes I see new boaters make is bundling their boat insurance with their homeowners or auto insurance. While bundling works great for cars and homes, it’s not always the best move for boats. Here’s why:

• Homeowners Insurance Companies Aren’t Marine Specialists: Home insurance providers that offer boat insurance as an add-on typically lack the expertise and specialized coverage that a dedicated marine insurance carrier provides. This can leave you without important protections like proper fuel spill coverage or specialized marine claims handling.
• Work With Specialty Carriers:</strong> Companies that specialize in marine insurance—like Chubb, Progressive, and American Modern—understand the unique risks of boating. They offer more comprehensive coverage, including agreed value, on-water towing, and specialized claims handling, giving you peace of mind on the water.

It’s tempting to bundle your insurance for convenience, but it’s worth taking the extra step to work with a marine insurance expert to ensure you’re getting the best protection for your new boat.

What Does Boat Insurance Cost?

A good rule of thumb for estimating the cost of boat insurance is about 1% of the boat’s value annually. For example:

• If your boat is worth $50,000, your annual premium will likely be around $500.

The actual cost can vary based on:

• The type and size of your boat
• How and where you use it
• Your experience and claims history

It’s important to note that boat insurance prices can vary depending on where you live and where you store your boat, too. Coastal areas tend to have higher rates than inland states. So, it’s always a good idea to compare options and work with a specialist who can guide you through your unique situation.

How to Save Money on Boat Insurance—The Right Way

Now that you know what boat insurance can cost, let’s talk about how you can save money the right way. Here are a few methods to lower your premium without sacrificing coverage:

• NMMA Certification: If your boat’s manufacturer is NMMA-certified, you may qualify for a discount. This certification indicates that the boat meets strict safety and construction standards.
• Pay in Full: Paying your premium upfront for the year can save you money, as many companies offer a discount for avoiding monthly payments.
• Boater Safety Course: Taking a boater safety course not only enhances your skills but can also reduce your insurance rate.
• Lay-Up Period Discounts: If your boat is stored out of the water during the off-season, you could qualify for a lay-up period discount. Just keep in mind that most carriers will suspend in-water coverage during this time, so if you decide to take your boat out on a warm winter day, make sure your coverage is active again.
• Shop Early for Advance Quote Discounts: Many companies offer discounts if you shop early and get an advance quote. It’s a simple way to save by locking in your rate ahead of time.

At the end of the day, saving money the right way means finding the right company and the right coverage without sacrificing protection.

Ready to Get Started?

Buying your first boat is an exciting experience, and I’m here to make sure your insurance process is just as smooth. If you have questions or you’re ready for a quote, give me a call at (513) 653-3800, or request a quote on our website. Let’s make sure you’re fully covered so you can focus on enjoying your new adventure on the water!

Remember to wear your life jackets, and I’ll see you, On The Water!