How Much Does Boat Insurance Cost (and How to Choose it)

Buying a boat can be an exciting time, but once you've found the right vessel and are ready to make your purchase, you need to protect it. One of the most effective ways to achieve this is through an insurance policy.

Which policy is right for your needs, and what will your boat insurance cost? Here's what you need to know to find a quality policy, answer your boat insurance questions, and travel the waterways with confidence.

What Is the Monthly Average Cost of Boat Insurance?

The answer to the question "How much is boat insurance?" depends on several factors. For smaller boats, insurance costs are typically $25–$75 per month. If you have a larger or high-performance boat, you can expect a monthly cost of $100–$300 or more.

Premiums vary widely based on location, type of boat, and coverage levels, with annual costs totaling 1%–5% of the boat's value.

Boat Insurance Cost Factors (Boat Type, Location, Coverage)

The average cost of boat insurance isn't always easy to determine. For example, the type of boat you own, its size, and its value are significant factors in the cost of insurance, with luxury yachts and speedboats costing more than small fishing boats.

Age and condition also matter, and newer boats or well-maintained vessels might cost less to insure. Location and usage also matter: premiums are typically higher in coastal or hurricane-prone areas, and inland lakes are generally more affordable.

Coverage options also factor into overall boat insurance cost. Liability-only is the least expensive option. Comprehensive, towing, and uninsured boater coverage add to the overall price of your policy.

Your insurer may offer you lower rates if you have GPS tracking and secure storage for your vessel. Taking a boating safety course (like the courses we offer here at Boat-Ed) may also help lower your rates.

Is Boat Insurance Required by Law?

U.S. federal law doesn't require you to have boat insurance, and state laws vary. Some states require proof of financial responsibility, so it's essential to review the rules for your location.

If you take your boat to a marina, you may be required to have liability coverage to protect other boaters. Additionally, if you financed your boat, your lender will generally require full coverage to protect its investment. 

Required vs. Optional Coverage

Required coverage includes liability, if mandated by a marina, lender, or your state. However, optional but recommended coverage includes collision and comprehensive coverage to protect your boat against damage.

Remember: if you financed your boat, these types of coverage may be required.

Other optional but valuable coverage includes uninsured/underinsured boater coverage, medical payments coverage, and coverage for towing and assistance. 

Does Boat Insurance Cover Theft or Damage?

Some comprehensive insurance policies cover theft, while collision insurance covers damage if you have an accident with another boat or strike an object. Comprehensive coverage also helps protect against non-collision damage, such as storms, fire, or vandalism.

Insurance typically does not cover wear and tear, mechanical breakdowns, or improper maintenance. 

Should I Consider Cheap Boat Insurance?

There are pros and cons to choosing cheap boat insurance. Cheap insurance means a lower upfront cost, and this can be a good option for older, lower-value boats.

However, the most significant downsides to cheap insurance are limited coverage and higher deductibles. An inexpensive insurance plan may not include coverage for theft, storms, or towing.

Your best approach is to strike a balance between affordability and sufficient protection for your boat, location, and usage.

What Are the Types of Boat Insurance?

Your boat insurance cost is related to the type of coverage you choose.

The main options include:

• Liability: Often required by lenders and marinas, liability insurance protects you against bodily injury or property damage you may cause to others.
• Collision: This pays for repairs or the replacement of your boat if it is damaged in an accident, and it typically comes with an out-of-pocket deductible.
• Comprehensive: Comprehensive coverage protects you from non-collision risks, such as theft, fire, vandalism, storms, and sinking.
• Uninsured/Underinsured Boater: This covers injuries or damages if you're hit by a boater who doesn't have sufficient insurance. 
• Medical Payments: This helps pay medical bills for you and your passengers, regardless of who's at fault.
• Towing and Assistance: This coverage pays for towing, fuel delivery, or emergency labor in the event of a breakdown.
• Personal Effects: You can protect items on board—such as fishing gear, electronics, and safety equipment—with this coverage.

You'll also need to choose between agreed-value and actual-cash-value policies.

An agreed-value policy offers a set amount of money that's agreed upon at the policy's creation, and it is generally better suited for newer boats. An actual-cash-value policy will pay the current market value of your boat minus depreciation, which means a lower payout (but also lower premiums). 

How to Choose the Best Boat Insurance for My Boat

To choose the best insurance policy for your boat, you first need to assess your needs. Consider where you use the boat, its age, value, and whether you need liability-only or full coverage. Then, compare coverage options and look beyond price. 

Getting boat insurance quotes can help you find the best coverage, and it's a good idea to get three to five quotes for a solid comparison. For example, Progressive makes it easy to get a quote online in just a few minutes. 

Look at limits, options, and exclusions, and ensure you have the types of coverage that are important to you (as well as those required by your lender, state, or local marina).

Additionally, consider the insurer's reputation by examining its financial strength ratings and customer reviews. Look for gaps where coverage might be limited or unavailable, and balance the costs of your premiums with an affordable deductible. 

If you own a home or vehicle, you may be able to bundle your policies and save money. Other effective ways to save on boating insurance include taking safety courses, installing GPS tracking devices, and utilizing anti-theft devices. 

Learn More About Safe Boating Practices Through a Boater Education Course

We hope the insights we shared today help you choose a policy that makes sense for your budget while protecting your boat!  

However, knowing "how much does boat insurance cost" is only one aspect of protecting your vessel and staying safe on the water. Before you purchase your boat and its insurance policy, take the time to complete a boater education course.

You'll not only be taking a step that could lower your insurance premiums—you'll also gain valuable knowledge about emergency procedures, navigation, and etiquette, helping you boat with confidence. Plus, most states and Transport Canada require motorized boat operators to pass a course (like Boat-Ed) and carry a safety certification on the water. 

Whether you plan to be on the water soon or next season, now is an excellent time to make sure you can do so safely and legally!
In the U.S., take the Boat-Ed course for your state.
In Canada, take our Transport Canada-approved course. 

Frequently Asked Questions (FAQs)

We have answers to your questions about how much does boat insurance cost!

Q: What is the average monthly cost of boat insurance?

A: The average monthly cost of boat insurance ranges from $25 to $75, depending on the boat’s type, value, location, and coverage level.

Q: Is boat insurance required by law?

A: Boat insurance is not required by federal law. However, some states, marinas, or lenders may require proof of coverage.

Q: Does boat insurance cover theft or damage?

A: Yes. Most policies cover theft, vandalism, collision damage, and storm-related losses. However, coverage varies by provider and policy.

Q: How to calculate boat insurance?

A: Boat insurance costs are typically calculated based on the boat’s value, size, age, use, storage location, and owner’s boating history.

Q: What does boat insurance not cover?

A: Boat insurance generally does not cover wear and tear, mechanical breakdowns, animal damage, or improper maintenance.

Q: Does my homeowner's insurance cover my boat?

A: Homeowners insurance may provide limited coverage for small boats (like canoes or small sailboats) but usually excludes larger or motorized boats.

Boat legally and safely in your area!
In the U.S., take the Boat-Ed course for your state.
In Canada, take our Transport Canada-approved course.