The Best Boat Insurance

Boat insurance companies stipulate the parameters and premiums of your policy based on you, your boat, and where you’ll take her. General rule: the bigger and more capable the boat, the more treacherous waters you likely enter, and the more detailed the policy. But before a provider can identify your right policy, you’ll need to identify your right provider.

The 3 Best Boat Insurance Providers

Best for Most Boats
American Family Insurance
American Family Insurance
Generous inclusions and plenty of discount opportunities make this high-limit provider a worthy first choice.
Pros
Comprehensive boat insurance
Bundling
Wide coverage margin
Cons
Lacks personalized packages

Why we chose it

Comprehensive boat insurance

American Family Insurance’s watercraft policies are personalized by vessel type and cover all typical perils (physical damage to your boat, liability for bodily injury and property damage, and medical expense coverage), but exceed the typical in just about every category.

Every policy includes emergency roadside and on-water service (typically, an expensive endorsement), even general boat coverage. It also pays medical expenses for you and your family members if injured. Typically, liability policies give financial assistance to those who would feasibly sue — it only kicks in when the damaged parties’ carry a different last name. American Family writes a policy that stretches just a little farther in all the right directions.

Bundling

The average boat insurance company (the ones that underwrite a whole spread of insurance products themselves) offer multi-policy bundling, but these don’t always extend to your boat. American Family, however, offers a bundling discount when you join boat insurance with home or auto.

Wide coverage margin

American Family Insurance has a high liability limit (a hefty $1,000,000), and that’s important if you have a large (over 10m long) or powerful (a high power-to-weight ratio) vessel. Boats answering to these descriptions can potentially wreak more havoc on the water, and on your wallet. You also have a lot of freedom to tailor your coverage amounts.

Core among the added coverage that can be purchased: a physical damage limit that corresponds to an “agreed value” rather than the actual value. While this will marginally increase your premium, it can be applied to both repairs and total losses. Meaning that if part of the boat is damaged, the full price of getting it back up to mint condition will be covered — not just what the insurance company decides that portion of the hull would be worth in today’s market.

In addition to the generous limit provided by an agreed value policy, you can also secure a high liability limit thanks to American Family Insurance’s $1 million high water market. We were impressed to learned that this covers a high pollution liability limit, too ($300,000). Since the max amount you can be fined for environmental liability has been raised, and is likely to be raised again, getting what may seem like an exorbitant amount of coverage is critical.

Points to consider

Lacks personalized packages

American Family Insurance’s organization of policy types by boat model speaks to its conversancy with different perils associated with each, but the delineations seem intended to help them define your risk than help you find your ideal coverage.

Each of the below comes with the same standard inclusions; you’re just charged differently for them and assigned different limits:

  • Bass & fishing
  • Power & speed
  • Personal watercraft
  • Houseboat
  • Yacht
  • Non-motorized
  • Sailboat

While the packages aren’t as personalized as we’d like, American Family Insurance steps up their customer appeal in the discount department by offering the greatest number of ways to save: bundle with home and auto, get rewarded for taking safety courses and keeping on-board safety equipment up to snuff, and sign up to pay in full or automatically and get rewarded even more.

Best for Small Boats
Farmers
Farmers
Customizable and potentially more affordable, with a boater-friendly list of packages and a host of available discounts.
Pros
Complete, smaller policies
Boater-oriented packages
Unique discounts
Cons
Larger limits enlist underwriters

Why we chose it

Complete, smaller policies

If you don’t need anywhere close to a million in liability coverage, Farmers Insurance is another great choice. Farmers checks all the boxes that made American Family our top pick, just its coverage maxes out at $300,000. It offers both agreed value and actual value policies, plenty of discount opportunities, and a reputation for financial strength and claims management that puts trust in our heart.

Boater-oriented packages

Farmers’ organization of policy type is impressively boater-oriented, considering both what the boat can do and what you’ll actually use it for. Rather than divvy up policies by boat type, Farmers offer packages for different priorities: everything from value (Marine Choice Saver Package) to Bahama voyaging (Performance Package). Farmers tags Marine Choice Plus as its most popular policy.

It offers you the agreed value (a.k.a., total value) of your boat as well as other nice perks, like a diminishing deductible (which automatically deducts your deductible by a percentage for every year you remain claims-free) and hurricane haul-out. This last benefit, which means Farmers will foot the bill if your boat needs to be removed from the water pronto or take a beating in catastrophic weather, isn’t an uncommon endorsement, but it is an uncommon inclusion.

Unique discounts

Farmers presents its policyholders with a host of discounts. If you hold more than one policy with Farmers, take a safety course, equip your vessel with safety devices, lay up your boat for at least three months a year, or pay your entire premium in one lump sum, you stand to save.

The company also offers a dry docking discount, which rewards you for taking your vessel out of the water for three or more winter months. And if you take your boating excursions to the next level by entering fishing competitions or setting sail for warmer seas, upgrade to the Elite package. This one pays your entrance fees, extends your navigation area beyond the U.S., and generally beefs up your coverage limits on all counts.

Points to consider

Larger limits enlist underwriters

$300,000 is a big number, but an industry low. As with most boat insurers, you can secure a higher value policy through Farmers, but Farmers will no longer underwrite it. The company transfers the risk over to a third-party underwriter (a confusion and inconvenience that figured as a cut in our elimination process.) If $300k sounds ample for liability coverage, Farmers won’t ask for any other sacrifices.

Best for Large Boats
State Farm
State Farm
A high liability limit and rewards for safety measures and experience make State Farm a good match for the serious boater, but policy information is muddled and there’s a dearth of other discount opportunities.
Pros
Complete, smaller policies
Boater-oriented packages
Unique discounts
Cons
Larger limits enlist underwriters

Why we chose it

Sky-high limits

State Farm offers far and away the most liberal limits of coverage, starting with $2 million in liability. No other provider we analyzed personally accepts risks of that stature without enlisting a third-party underwriter. If you have an especially valuable vessel, State Farm is your best bet.

Discounts for experience

Apart from that huge liability cap, State Farm is a good choice for the power boater for its perks. State Farm offers discounts if you’ve completed Boater Safety courses or have previously owned a boat. State Farm’s seniority-rewarding discount system, plus high risk-tolerance, promises to accommodate seasoned boatowners.

Lots of watercrafts covered

All of the following watercrafts are viable candidates for State Farm’s basic boat policy, which covers the usual physical damage and liability, and can be plumped up with endorsements. However, you’ll have to discuss your boat specifically with a State Farm agent to get insight into what those endorsements look like.

  • Runabout/Sport Boats
  • Cruiser/Yachts
  • Sailboats
  • Bass Boats
  • Jet Skis
  • Houseboats
  • Kayak/Canoes

Points to consider

Need agent for policy info

While not hugely problematic — insurance companies often reserve policy details as “proprietary information” — State Farm’s closed door may make it hard to see exactly what you’re signing on for without involving an agent. Case in point: When we made the rounds calling agencies to verify policy data points, our local State Farm agent stated unequivocally that the company does not offer agreed value coverage, while the official website confirms the opposite.

Our experiences attempting to wrest information from the company’s agents and web pages surfaced conflicting info, but most insurance companies are hesitant to dish out policy specifics (much less furnish a sample policy) until you can tell an agent about your boat in detail and appear ready to buy. State Farm still holds a good reputation for claims management and customer service.

No bundling

Beyond experience and the completion of boater safety courses, State Farm doesn’t offer much in the way of discounts and its biggest omission is probably bundling. Because State Farm uses underwriters for its other insurance products, it’s unable to combine those policies with its own boat insurance for a better rate.

How to Choose a Boat Insurance Provider

See if you can get a better rate with membership

We chose to look at national providers with insurance available to all. Still, just because a provider is regional or members-only doesn’t mean it couldn’t work for you. If your family has military ties, consider USAA. If you’re interested in becoming a member of a boating organization in addition to securing coverage, get in touch with the respected folks at Boat U.S. or NBOA, and take advantage of their extra perks and publications.

Get quotes from several providers

How each providers will assess you and your boat’s risk, and set a premium, depends on a myriad of factors. Some are obvious — do you boat in the stormy Gulf or a placid lake? Others are surprising — do you share ownership?

Our recommendation: Get a boat insurance quote from each of our top picks, plus a couple local options, to see which one will cut you and your particulars the best deal.

Decide whether you want an actual or agreed value policy

There are two basic policy types:

  • Agreed value: Your boat’s permanent value is decided from the outset.
  • Actual cash value: Your boat’s market value is decided at the time of the claim.

Choosing between the two is a matter of opting for a smaller premium and a smaller total payout in the event of a total loss, or a bigger premium and a bigger safety net. Tina Willis, Florida personal injury attorney, points out that it’s the total losses you want to be insuring for: “Property damage is often very insignificant compared to the money needed to adequately cover catastrophic injuries or wrongful death.”

Chris Johnston, Des Moines-based personal injury lawyer, notes that only with an agreed value policy do you know exactly the amount of coverage you have for the life of the policy. “Used boats typically don’t continue to depreciate much after a number of years, while new boats keep getting more expensive,” Johnston explains, “You might be surprised at the difference in your settlement amount versus the cost of replacing the same model” in the event of a total loss.

The pros agree: An agreed value policy offers greater protection. That said, if you have a small or relatively inexpensive watercraft, or boat exclusively in mild waters, it could be overkill.

Know that boat insurance doesn’t cover everything

At the end of the day, you can be more sure of what your boat insurance won’t cover than what it will. A lot of common griefs (wear and tear, manufacturing defects, zebra mussels) are excluded from practically every boat policy.

If some of the common boat insurance exclusions leave you seasick, investigate endorsements. An example: Corrosion to the hull is rarely covered — it’s unavoidable with age. If hull corrosion leads your boat to sink, an endorsement for consequential damage coverage could save you from huge loss (the cost of hauling the wreckage and replacing your boat).

Boat Insurance FAQ

How does boat insurance work?

While its insurance is more nuanced and nebulous than auto insurance, boat insurance covers many of the same categories: liability, property damage, uninsured motorist coverage (in this case, uninsured watercraft), and medical coverage.

Do I have to purchase boat insurance?

Boat insurance is not required by most state laws (Utah and Arkansas are the only exceptions). However, there’s more than a few reasons to insure your vessel. The first is obvious: If your boat incurs or inflicts damage, your insurance provider will take the hit. But there’s a few more: Any lender will require boat insurance to cover its interest in it. And most marinas require at least liability coverage before accepting your boat at their facility.

As Peter Kurki, a yacht broker with Bennett Brothers Yachts points out, “Gone are the days of pulling into a marina, tieing up and forgetting about the boat… Quality coverage maintains the comfort of all aboard and ashore.”

Will a homeowners insurance policy cover my boat?

A homeowners insurance policy, or even an endorsement to it, can’t provide liability coverage for boats bigger in size and / or value. While they can cover boats slow, small, and inexpensive, they aren’t able to foot full replacement or pollution liability costs. If you own other, smaller water vessels — jet skis for example — it’s wise to have those ensured with their own policy as well.

How much does boat insurance cost?

Everything about your boat and how you drive it has bearing on the amount you’ll shell out. Some of these facts driving up costs you can’t change:

  • Your cruising area (Ocean, bays, rivers? A mild lake or the Gulf Coast?)
  • Its boating season (the longer, the costlier)
  • Your boat’s condition and capabilities (a powerful boat can cause a lot of mischief)
  • Whether you’ve previously owned a boat

Other factors are under your control:

  • Have you had any boating safety education? The Coast Guard and the US Power Squadron offer training.
  • Is your boat up to scratch? The same two organizations publish requirements that marine surveyors and insurance companies take into consideration.
  • Do you have good driving records across all vehicles, land and sea?

Another element that decides your premium is how high you set your deductible. The higher it sits, the less you pay month to month. Common deductible amounts are $250 for property damage, $500 for theft, and $1,000 for medical payments, but you could raise the threshold if you’re a gambling man.

What is a boat insurance survey?

If you aren’t able to furnish your boat insurance provider with a recent Bill of Sale (typically, within the past ten years), you’ll have to get a Full Condition and Value survey (FC&V survey).

An independent marine surveyor physically inspects your boat from bow to stern, either in or out of water as your provider specifies. Find one from the Society of Accredited Marine Surveyors or the National Association of Marine Surveyors. A surveyor from either organization will furnish a detailed, written report to the insurance company that documents your boat’s condition, determines whether it’s an acceptable risk, and asses its current market value.

While it may seem like a pop quiz, a surveyor protects the interests of the boat owner. You want to make sure you are insuring your boat for a fair market value, one that includes improvements you’ve made. Attorney Chris Johnston notes, “In many cases the insured will only think about what they paid for the boat and forget about all the items added after the initial purchase.” Peter Kurki also suggests that the FC&V process becomes “a good time to fix what’s broken” and upgrade safety equipment.

The Best Boat Insurance: Summed Up

American Family Insurance
Farmers
State Farm
The best
For most boats
For small boats
For big boats
Liability limit
$1,000,000
$300,000
$2,000,000
Agreed value policies
Actual value policies