Boat Insurance: The Basics

boatUnless you’re moving to the middle of the dessert, boat owners should understand how marine insurance differs from that of your car. Thought one goes by land and the other by sea, there are variations beyond the basic coverages common to both. In fact, “boat and yacht” policies can even vary between companies that specialize
in marine insurance.

Liability and physical damage coverage form the core of any policy.

Liability Coverage
Covers legal obligation to third parties due to injury, loss of life or property damage.

Physical Damage Coverage
Reimburses for damage to the boat and its machinery. The best physical damage policy is an “all risk” whichcovers any cause of loss not specifically excluded in the policy, like wind storms, vandalism and collisions with the dock. It is recommended selecting a policy that continues to cover your vessel even when it is stored or being transported by trailer.


When comparing physical damage coverage you should know whether an insurance settlement is based on “agreed value” or “actual cash value”.

Agreed Value
Reimburses the insured for the amount listed on the policy in the event the vessel is a total loss.

Actual Cash Value
Takes into account depreciation and the condition of the boat at the time of loss. The latter option provides less coverage but the premium is usually reduced.


Additional Marine Coverages:

Medical Payments
Pays your first aid, ambulance and hospital bills in case of accident. Also covers any passengers injured on your boat.

Towing and Assistance
Pays for emergency assistance such as boat towing, emergency repairs while underway or fuel delivery at sea.

Personal Property
Reimburses for loss of personal personal effects, clothing, fishing gear and more.

Uninsured Boater
While not mandatory, this coverage compensates you and your passengers for injuries caused by another boat owner who carries no liability insurance.


How much your insurance will cost depends on several factors, including the value of the boat, it’s length, age, the type (sail or power), mooring location, intended area of navigation and how high a deductible you choose.

Methods of reducing your premium include accepting a higher deductible, reducing your area of navigation, installing safety devices (like a fire extinguishing system in the engine compartment or a vapor detector in the bilge) and making sure the policy provides for “lay up” periods when your vessel is out of the water.

For More Information

Contact an AEGIS Personal Lines Representative at 718-353-3800.