In some areas, boat insurance is mandatory. In other areas, it's not required, but it's still a good investment. If you're shopping for a boat, you should also be shopping for boat insurance. But what exactly should you look for in a boat insurance policy? And how much can you expect to pay for a typical premium?
The Average Cost of Boat Insurance
Let's start by looking at the average cost of boat insurance, applied broadly.
Progressive calculated average boat insurance premiums in the United States using data from 2020 and 2021 – which is still fairly accurate for getting an initial estimate.
Overall, you can expect your boat insurance premiums to amount to between $245 and $652 every year, which equates to about $20 to $54 every month.
If you live in a high-cost state, you can expect an annual premium of $527, or $44 a month. Alabama, Alaska, Connecticut, Delaware, Florida, Hawaii, Louisiana, Maryland, Massachusetts, Mississippi, Nevada, New Jersey, New York, South Carolina, Rhode Island, and Texas.
If you live in a medium cost state, you can expect an annual premium of $344, or $29 a month. These states include Arizona, California, Georgia, Idaho, Kentucky, Maine, Michigan, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Tennessee, Virginia, Washington, West Virginia, and Wyoming.
If you live in a low-cost state, you can expect an annual premium of $263, or $23 a month. These states include Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, New Hampshire, Ohio, Pennsylvania, South Dakota, Utah, Vermont, and Wisconsin.
What accounts for the differences here?
Obviously, cost of living plays a bit of a role here, but you've also likely noticed something similar about the states that are grouped together. States that are closer to accessible water, and those with more aquatic options, tend to be more expensive, for understandable reasons.
In Europe, you may have to consult some conversion tables, but the rates are somewhat similar. The average annual premium of comprehensive boat insurance for a yacht in the UK, for example, is £380, putting it somewhere between a medium cost and high cost U.S. state.
Variables That Influence Your Boat Insurance Costs
There are many different variables that are going to influence your boat insurance costs. The estimates in the preceding section can help you get a baseline for the premiums you can expect, but only by factoring in these variables will you be able to get a more accurate estimate.
- Location. Where you live matters. Some areas are home to highly popular, densely packed oceans, lakes, and rivers, where you can take your boat out frequently at a moment's notice. But if you live 100 miles away from the nearest body of water, and you're only going to take your boat out 2 or 3 times a year, you're going to pay much less for your insurance.
- The nature of your boat. The manufacturer and type of boat that you have is also going to influence your insurance costs. As you might imagine, bigger boats are more expensive to insure. More expensive boats are also more expensive to insure. And if your type of boat is associated with more accidents than other types of boats, you can expect your premiums to increase.
- Boat age. Insurance companies will also consider the age of your boat. The older the boat, the riskier the asset becomes, and the more expensive it becomes to insure.
- Boat horsepower. Boat horsepower can also influence the cost of your premiums. The faster and more powerful the boat is, the more damage it can do if it's ever involved in an accident. Fast boats are often highly correlated with accidents in general, since the people driving them may be looking for a thrill and may be more tempted to engage in risky activity.
- Personal boating history. Of course, that can be mitigated by your personal boating history. If you've owned and operated boats for 25 years, and you've never had to make an insurance claim, your premiums are going to be less expensive than someone who's completely new to boating, but they've already been in three boat accidents.
- Driving record. Many insurance companies will also take your driving record into account, as an indicator of your level of safety and responsibility. If you have a long history of automobile accidents, you can expect your boat insurance premiums to be higher.
- Safety equipment present. You can get a discount on your insurance policy, in many cases, simply by having more safety equipment onboard. Your insurance agent will ask you lots of questions about your safety equipment and safety precautions – just be sure to answer honestly.
- Other risk factors. Insurance underwriters often look at other risk factors as well, hoping to accurately estimate your risk of being in an accident. The higher the risk, the higher the premium.
What Should Your Boat Insurance Policy Include?
The two main types of boat insurance are agreed value and actual cash value policies. Agreed value policies are based on the value of the boat whenever the policy was written; it doesn’t factor depreciation into the equation, but you’ll typically pay more upfront. Actual cash policies are based on the current value of your boat, even as it declines through depreciation.
Many boaters choose an “all risk” policy, which covers many – but not all – types of losses. In this type of policy, the policy will cover anything that’s not explicitly omitted. Frequent omissions here include things like marring, denting, ordinary wear and tear, damage from animals, manufacturer defects, and ice damage.
You can also choose additional coverage for things like medical payments, coverage for uninsured boaters, liability coverage, and coverage for towing and assistance.
No matter what, it’s important to read your policy carefully to make sure you understand what it covers and what it doesn’t.
Thankfully, most boat insurance policies are relatively inexpensive. Even at the upper end of the spectrum, with annual premiums exceeding $500, the fact that a robust policy can save you tens of thousands of dollars or more makes it more than worth it. If you’re looking for your next boat to insure, check out our vast selection of new and used boats for sale today!