How Much Does a Boat Insurance Cost?

In the United States, private ownership of boats is obviously not as crucial and ubiquitous as owning cars. However, the interest of Americans in recreational boating is also difficult to ignore, considering that over 87 million adults participate in any of its related leisurely activities (e.g. cruising, water skiing and fishing). Recent statistics have counted up to 13.28 million American households owning boats.

While 2.65 million American families are planning to buy a boat, it is also important for prospective owners to be aware of its potential dangers. The US Coast Guard submitted a report concerning the fate of unfortunate boat owners (pilots) in 2016 – counting a total of 4,463 accidents that incurred up to $49 million worth of property damage. The need for boat insurance is predicated by these frequencies, especially given the fact that open motor boats account for 47% of these accidents.

Modern boat illustrated

Average Cost of Boat Insurance

Current estimates have reckoned the national average is around $300 to $500 per yearly premium. In some cases, the annual percentage could increase up to $1,000. While anyone can take a good guess between these numbers, there is a precise way of determining the exact price to insure a boat.

According to boat insurance experts, a good ballpark figure for the annual premium is 1.5% of the vessel’s market value. Take, for instance, an entrepreneur owns a 30-foot long schooner that is worth $39,000:

39,000 x .015 = 585

Judging from this calculation, the estimated cost of the annual boat insurance premium for a $39,000 schooner is $585. Any insurance premium that costs a thousand bucks must have owned a luxury vessel that is worth a fortune. While this calculation is practically infallible, it is also important to consider other factors that can marginally increase the premium.

boat parked at the shore

What Is Included

Considering the relatively costly price to insure a boat, it truly pays to know the true value of the expensive premiums. Just like car insurance, the objective of boat insurance is to cover the essential costs that are incurred by accidents or loss. Fortunately, unlike car insurance, the boat insurance has a slightly broader scope in terms of the overall financial protection. These are the things included in any standard boat insurance:

  • Property Damage – this coverage deals with the cost of material destruction of another boater’s vessel, one’s own, or any important object at the site of the accident (e.g. marina’s planks).
  • Medical Costs – since accidents often cause serious injuries, the boat insurance will cover a huge portion of the medical fees regardless of who caused the accident.
  • Liability Expenses – every incident involving a disastrous seamanship is bound to incur legal costs and the liability coverage can help shoulder dispute settlement fees.
  • Personal Effects – most policies also include financial assistance for lost personal belongings in a damaged boat such as fishing gear, navigation equipment, computer, phone and/or jewelry.

According to the Insurance Information Institute, most policies entail a liability coverage limit of $15,000 to $300,000. It is also important to take note that a boat insurance holder/subscriber can temporarily hold the coverage for as long as an entire season (e.g. winter).

As for the deductibles (out-of-pocket fees often paid at the event of an accident); property damage costs as low as $250, theft at around $500, and medical expenses at around $1,000. Insurance holders can choose to increase their deductibles to potentially lower their premium costs.

Additional Expenses

Boat owners often know that it is a smart decision to invest in insurance. However, a meticulous plan often takes more than dealing with the basic boat insurance cost. In fact, strategic additional spending (such as the marginal increase of deductibles) may be necessary to lower the annual premiums. Here are the following areas one can spend in order to make the most out of their boat insurance policies:

Extra Coverage

The basic coverage of standard boat insurance policies is enough to provide financial protection for boat owners. However, there are certain limitations to the benefits that a basic insurance policy can provide. To expand the scope of financial safety net, meticulous boat owners would pay for the following examples of policy add-ons:

  • Reasonable repairs: reimbursement for expensive structural upgrade and maintenance.
  • Emergency services: reimbursement for emergency services (e.g. rescue and pollution control).
  • Umbrella coverage: extra financial protection for the insurance holder’s various assets (e.g. real property, car, future income, and/or retirement account)

Safety Equipment

One of the effective ways for potentially reducing premium costs is to convince insurance providers that the holder/subscriber is a responsible boat owner and that his/her vessel is less likely to run into costly accidents. A precise way to accomplish it is to designate a budget for safety equipment. $500 is enough to pay for the security inventory that includes the following:

  • horn
  • 5 life jackets
  • visual flares
  • fire extinguisher

Education Courses

Another way to convince insurance providers of one’s commitment to safety at sea is to enroll at boat courses certified by the US Coast Guard. An average cost of a boating seminar is roughly around $30 to $40, while easier courses are either free or only costs less than $10.

Shopping for Boat Insurance

The prospective insurance holder must know his or her boat truly requires financial protection. The US Coast Guard reported that, in 2016, around 8 out of 10 boaters who drowned were using vessels measuring less than 21 feet in length.

Granted, not all seaworthy crafts that fall short of the prescribed measurement need boat insurance. Anyone looking into acquiring financial protection should check if their boats fit the following profiles:

  • Yacht
  • Jet boats
  • Huge sailboats
  • Wave runners
  • Anything faster than 25 miles per hour

As of 2017, there are up to 14 highly recommended insurance providers in the United States. One should check out these following names:

  • Allstate
  • Boat US
  • Charter Lakes
  • Foremost
  • GEICO Marine Insurance
  • Hanham Insurance Agency
  • International Marine Insurance Services
  • Mariners General Insurance Group
  • NBOA Marine Insurance
  • Nick Rose Insurance
  • Pantaenius Yacht Insurance
  • Pegasus Group
  • Progressive
  • Topsail Insurance

Factors Affecting Boat Insurance Costs

Previous parts of the article have partially touched on specific ways to reduce the overall price to insure a boat. These are among the following important factors one should consider in order to broaden one’s budget strategy:

  • Age & Gender

It is interesting to take note that women beyond aged 27 tend to be offered better quotation rates than men of the same age group, regardless of the comparative piloting skills. Couples could leverage from naming the insurance under wives than husbands.

  • Boat Specs

Apart from the measurement, it is important to bear in mind that the vessel’s horsepower has a direct impact on the premium cost. The faster the boat runs per hour, the more expensive the premiums tend to be.

  • Location

Higher premiums are charged for boat owners who live in coastal areas that are plagued by hurricanes. Furthermore, some places in America that have harsh winters can have the advantage of temporarily halting their insurance coverage.

  • Seafaring Frequency

In connection to the previously mentioned factor, the number of times the boater heads to open sea could directly impact premium costs. After all, the likelihood of the vessel getting into accidents is reflected by relative to its exposure. It is best to limit sailing or cruising in order to reduce the cost of the insurance premium.

  • Credit Score

Just like any kind of insurance, providers are keen about reviewing the financial attitude of their clients. Avoiding bad credit scores (e.g. huge debts + late payments) is a key to getting a better deal.

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