The Best Boat Insurance
How We Found the Best Boat Insurance
7 Insurance Experts
3 Top Picks
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. A lot goes into deciding coverage and price, but before a provider can identify your right policy, you’ll need to identify your right provider.
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.
There’s just a whole slew of coverage options and insurance stipulations depending on your boat and what it can do. General rule: the bigger and more capable it is, the more treacherous waters it likely enters — and therefore the more detailed the policy.
With an insurance type so varied, we dialed in on what’s essential long-term. The best boat insurance providers boast a strong financial outlook and write their own generous, Agreed Value policies.
Our top pick: American Family Insurance. The same company that scores high customer approval for its mainstream insurance products also writes a stellar boat insurance policy. Its watercraft policies are personalized by vessel type and cover all typical perils, but all of them include emergency roadside and on-water service (typically, an expensive endorsement).
Most preferred insurance companies (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.
American Family Insurance also has a high liability limit (a hefty $1,000,000), and that’s important if you have a large or powerful vessel. If you don’t need anywhere close to a million, Farmers Insurance is another great choice; its coverage maxes out at $300,000.
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). Like American Family, Farmers offers a bundling discount when you go through them for auto and boat. 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.
If you have an especially valuable vessel, or have plenty boating experience under your belt, consider State Farm. Its $2 million liability limit, plus the fact that State Farm offers discounts if you’ve completed Boater Safety courses or have previously owned a boat, make it a great fit for the power-boater.
How each of these three 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 to see which one will cut you and your particulars the best deal.
How We Found the Best Boat Insurance
We started by looking at all the boat insurance providers that cropped up on boat insurance buying guides from research sites like NerdWallet, boat insurance exchanges on the lively boating forum The Hull Truth, and popular maritime blogs. That gave us a total of 28 companies to appraise.
This list contained a far ranging mix of regional, specialty insurance firms, national providers, and global corporations that primarily serve big commercial accounts, but can insure your personal pleasure boat, too.
We cut providers whose policies aren’t available to everyone
We focused our search on providers licensed to provide coverage in all 50 states. Larger, multi-product insurance companies typically offer lower rates, greater discounts, and opportunities to bundle and safe.
We also cut companies that have special requirements for membership, or levy membership fees on top of the premium. Extra red tape ups the potential you won’t be able to obtain or keep your boat insurance long term (for instance, if you move).
Still, just because a provider is regional or members-only doesn’t necessarily make it a bad fit 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.
We held the rest to a high standard of financial health
With 12 remaining boat insurance providers, we turned our attention to financial stability. An insurance company is only as good as its continued ability to pay claims. That’s what financial ratings from Standard & Poor, Moody’s, and A.M. Best surface: A company’s long term financial health.
Insurance experts repeatedly point to these ratings as the top consideration for stack ranking providers, since all policies are largely flexible, and premiums too personalized to globally compare.
We retained companies boasting an “A” (Strong) rating or better from one of three bureaus, and lost two more small players in the process: Global Marine Insurance Agency and SkiSafe.
We wanted providers that underwrite their own policies
It’s important that the company you insure with has the financial muscle to pay out on claims for as long you own your boat. It’s also important that it’s easy to communicate with that company, pay bills, file claims.
When a provider hands your policy over to a third-party insurer after making the sale, those key lines of communication tend to get crossed.
To keep the relationship between insurer and insured as straightforward as possible, we cut providers that don’t underwrite their own boat insurance policies. This took three big names out of the running: Geico, Progressive, and Safeco.
We consulted experts about coverage
To help pinpoint the essential elements of a great insurance policy, we got in touch with the pros: maritime lawyers, marine surveyors, marina management, and, of course, insurance brokers.
Their input guided us to the theory that the best boat insurance plan is an Agreed Value policy with generous inclusions. Something that falls on the All-Risk side of the insurance spectrum.
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.
Agreed Value policies are more expensive, but Chris Johnston, a Des Moines based personal injury lawyer, recommends them exclusively. It’s the only way to 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.
And it’s the total losses you want to be insuring for. Tina Willis, a Florida personal injury attorney, points out that “Property damage is often very insignificant compared to the money needed to adequately cover catastrophic injuries or wrongful death.”
The unpredictable is often the unstated. While a Named Perils policy stringently limits a provider’s liability for the unpredictable by covering only what is explicitly stated, an All-Risk policy lives up to its name. It covers everything not explicitly excluded.
This typically includes consequential damages, a key consideration given that lots of common griefs (wear and tear, manufacturing defects, zebra mussels) are excluded from practically every boat policy.
For example, corrosion to the hull is probably not covered — it’s an unavoidable with age. But if this corrosion leads to catastrophic loss (i.e., your boat sinks) and you have consequential damage coverage, the cost of hauling the wreckage and replacing your boat would be covered.
The best write generous policies and back them with robust finances
Through these cuts, we landed on 6 outstanding providers:
- American Family Insurance
- State Farm
Then we distinguished between them based on customer service channels, customer service scores for auto insurance on Consumer Reports (boat insurance’s most equivalent product on dry land), potential discounts, and coverage options. All our top picks offer 24/7 claims service and convenient online payment.
Our Picks for the Best Boat Insurance
A watercraft insurance policy from American Family Insurance perfects the basics. Its standard policy, like most, covers physical damage to your boat, liability for bodily injury and property damage, and medical expense coverage. But it maximizes its value in just about every category.
The company includes emergency on-water assistance and towing even in its 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.
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.
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
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.
Farmers Insurance checks all the same boxes that made American Family our top pick. 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. The main difference between the two, and the consideration that makes American Family a more universal top pick, is that Farmers caps its liability at $300,000. A big number, but an industry low.
Now, as with most insurance providers, 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 it sounds like an ample limit for the liability coverage you’re looking for, Farmers won’t ask for any other sacrifices.
And its organization of policy type is more boater-oriented than American Family. Farmers’ packages consider both what the boat can do and what you’ll actually use it for. The perfect example: The Performance plan is intended for a high-performance boat, but doesn’t actually come with the souped-up limits and exotic inclusions necessary for the high seas adventurer.
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.
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 out your coverage limits in all directions.
Farmers also 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.
State Farm checks all the right boxes: High max liability, all typical coverages available, a strong financial outlook, and a good reputation for claims management. But our experiences attempting to wrest information from the company’s agents and boat insurance web pages surfaced very little info — and what we did find was conflicting. Still, State Farm’s high risk-tolerance, plus its seniority-rewarding discount system, promises to accommodate seasoned boatowners.
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 website confirms the opposite.
Not offering Agreed Value would be a big issue, but if the website’s word holds, 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.
State Farm also offers a unique discount for previous boat-owners. Anyone with a boat powerful enough to need a multi-million liability policy probably has a fair amount of experience under its belt; we appreciate that State Farm acknowledges that.
Beyond experience and the completion of boater safety courses, State Farm doesn’t offer much in the way of discounts (its biggest omission is probably bundling).
While State Farm’s boat insurance homepage links out to a number of articles (mostly revolving around safety practices), there isn’t much hard information about the inclusions and exclusions of its boat policy. The extent of specification is this list of covered vessels:
- Runabout/Sport Boats
- Bass Boats
- Jet Skis
All of the above are viable candidates for State Farm’s basic boat policy, which comprehends 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. Like most insurance companies, State Farm is 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.
Boat Insurance FAQ
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 are facts you can’t change, even if it does drive up costs:
- 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)
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?
- Have you previously owned a boat?
Another element that decides premium is how much you choose to set your deductible. The higher it sits, the less you pay month to month. Common deductible amounts sit at $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 on from the Society of Accredited Marine Surveyors or the National Association of Marine Surveyors. They furnish a detailed, written report to the insurance company that documents the 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.
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.