Minimum Coverage Requirements
Some states have minimum boat coverage requirements – usually a liability-only policy that pays for damage to another person's boat and injuries sustained due to an accident for which you are at fault. For example, the State of Arkansas mandates minimum liability coverage of at least $50,000 for boats with a horsepower of at least 50. In any case, liability-only plans are the most economical insurance policies, though young drivers under age 25 may pay higher premiums, as they pose a higher risk than older drivers. You should not purchase liability-only boat insurance if you cannot afford to repair, replace or retrieve your boat should the need arise.
Several factors affect the cost of insuring your boat against damage. Expect to pay more to insure a yacht than a small fishing boat. Also, as with other types of insurance policies, the amount of coverage you select and your deductible impact your premium significantly, as does the age of your boat and the number of hours logged on the vessel. Your insurers may also raise your premium if you have a high-powered boat capable of traveling at high speeds, as this could present a potential safety hazard when used inappropriately.
You may be able to curb the costs associated with boat insurance by changing the geographic location of your boat. Insurers offer lower rates to individuals with boats in mainland lakes than those located in coastal bodies of water. Avoid areas prone to hurricanes, and take a boating safety education course. If you pass the course, your insurer may give you a discount on your monthly premiums, in the same way that defensive driving courses yield discounts for auto drivers.
Aside from liability coverage, there are no state or federal laws that require boaters to purchase insurance for their water vessels. You may, however, have to insure your boat if there is a lien against it or if you store it in a private marina. For example, if you obtained a loan to finance your boat or used your boat as collateral to finance another personal loan, your lender may require you to insure the boat until your debts are paid in full. Marinas also impose insurance obligations, though coverage requirements vary according to each marina's policies.