Staying Afloat With Boat Insurance: What Determines the Cost?

How Much Is Boat Insurance?

When it comes to owning a boat, there are several more financial considerations than just looking at used and new boat prices and picking one that falls into your budget. You also have to keep in mind long-term costs, such as maintenance and boating insurance rates.

Just like with your car or your home, having a boat insurance policy will help protect your investment in the event of an accident. And while you can be optimistic about your chances of staying safe on the water, there's still a chance that you'll encounter problems, even on the most peaceful of days.

Why You Need Boat Insurance

When financing a boat, you may not want to think about adding any other costs to your budget. After all, a ship can be a hefty purchase. However, it's because ships can cost so much that you should invest in an insurance policy to protect it.

In 2017, the US Coast Guard reported over four-thousand recreational boating accidents in the year, amounting to roughly 46 million dollars in property damage between collisions, falls overboard, flooding, swamping, and other incidents. No matter the cause of the accident, having insurance can help you pay for damages you may not be able to afford out of pocket.

In some cases, your homeowner's insurance policy may cover part of your boat; however, relying entirely on this coverage can be risky, as it may not give you everything you need to protect your boat in all potential situations. It's much better to purchase a separate policy specifically for your ship to have the best results.

Factors That Impact Insurance

Different boats will potentially require different amounts of coverage depending on many factors—and these aspects can also impact how much you'll pay for your policy. Some of the most common variables with determining the best plan for you are:

● Length. The length of a boat can impact size and ease of control on the water, as well as affect its likelihood of being in certain kinds of accidents.

● Type. Sailboats, pontoon boats, utility boats, bass boats, ski vessels, cabin cruisers, utility boats, and deep-sea fishing boats have different builds and equipment, creating different insurance needs.

● Horsepower and Speed. The faster a boat can go, the higher the risk it has for an accident. Expect a quicker motor to cost a bit more to insure.

● Value. More expensive boats tend to be costlier to cover. Just like sailboat prices and power boat prices will differ as you shop for them, you can expect to see comparable differences when it comes to insurance premiums. Knowing your boat's worth can help you estimate your insurance costs.

● Age. Similarly, older boats tend to have less value than newer ones, which will impact what it costs to insure them.

● Cruising area. The risks you'll encounter on an ocean are likely to differ from those of sailing on a river. Depending on where you plan to sail, you may need different coverage options.

● Accident history. If you've been in a boating accident before, you can expect to pay more for your policy than someone with the same coverage on the same boat with no incident history.

Insurance policies often have different types of coverage that you can add on to what's available, which will, in turn, impact your premium. For example, increasing your out-of-pocket deductible in an accident will decrease your bill amount. Other factors such as limits, accessory coverage, and choosing between liability and comprehensive insurance can all impact your final cost.

Some companies will also offer a chance for discounts. Standard options include covering multiple boats, packaging your boat insurance with other policies (such as your homeowners/renters or auto insurance), and boat safety course discounts.

Average Costs of Boating Insurance

So how much does boat insurance cost? With so many factors playing a role in determining the price of insurance, it can be hard to tell what you'll have to pay at a glance. However, for the most part, boaters tend to pay anywhere between three-hundred to five-hundred dollars per year on their insurance costs.

Where you live can also impact your costs; states like Alabama can fall below this average, while areas susceptible to risks of hurricanes can have higher premiums because there is a higher risk of damage for these vessels. In any event, you can expect to pay between twenty-five and fifty dollars per month on insuring your boat.

If you have a larger, more expensive boat and you wish to have complete coverage, it's even possible to see monthly insurance premiums of up to one-thousand dollars, though this wholly depends on the options available and the other factors we've discussed above.

Saving Money on Boat Insurance

Some of the factors that determine the cost of insurance are out of your control, while others you can pay attention to and help yourself get a better deal. Just like with shopping for your boat, you should be sure to research different companies and compare their offers. While you'll get what you pay for when it comes to insurance, it's worth it to choose a cheaper policy if it provides similar coverage.

You should also pay attention to optional insurance coverage. Many companies will allow you to tweak your deductible for a lower premium, but that's not your only option. Look at your policy carefully and consider removing options that don't apply to your regular boating conditions, but be sure you won't put yourself at higher risk without them.

If you have a new boat, you'll likely want comprehensive coverage to protect against all types of accidents. However, as it gets older and depreciates, you can change to just liability coverage, which is often far less expensive. You'll still need to consider maintenance costs, but saving a bit of money can go a long way.

Taking boating safety courses and being careful to avoid accidents may give you a safe boater discount. Don't be afraid to ask what else you can recieve as a discount or a bonus.