Two Risks to Insure a Boat Against

If you own a boat — whether it’s a canoe, personal watercraft like a jet ski, a powerboat or sailboat — do you need insurance on it?

It all depends on the type of boat, says Jeff McCarthy, an insurance agent with Harrington Insurance Agency’s Woburn, Mass., office.

You’re insuring against two risks, he points out. First, there’s your liability, in case you or someone in your family injures someone else while boating. Second, there’s the risk that the boat itself could be damaged, stolen or destroyed.

The good news is that your homeowners or renters policy typically gives you full liability coverage for watercraft with up to a 25 horsepower outboard and sailboats less than 26 feet long.

Additionally, many policies provide $1,000 of coverage for the boat, outboard and trailer once your deductible has been met. But it’s only good for specified perils — for instance, sinking isn’t covered.

“If you have a small, inexpensive boat, you don’t need extra insurance if you have a home, renters or condo policy,” McCarthy says.

But if your boat or engine is too big to be automatically covered under basic homeowners insurance or is worth a lot, you’ll definitely need boat insurance. Without it, you risk taking a crippling financial hit if you cause injury or death on the water or damage your boat.

If your boat is modest-sized, you can normally buy a watercraft endorsement from your home insurance company, McCarthy says. The endorsement is an add-on that provides both liability and property insurance. If your boat is eligible, this is usually the cheapest, easiest route to take.

But if your boat is high-powered or is big and expensive, your home insurer probably won’t be willing to underwrite it, he adds.

Then, your agent will need to work with a carrier that specializes in boat insurance. Besides being willing to cover larger boats, these insurers also offer much more extensive coverage for watercraft.

For instance, most boat policies cover pollution, McCarthy says. If your boat sinks and leaks gasoline into a lake, you might be responsible for environmental cleanup costs if you’re not insured.

Additionally, you can get coverage for the personal property on your boat, such as equipment, clothing and fishing gear.

If you do buy boat insurance, check on how much liability insurance you need, he advises. For instance, some marinas require boaters to have $500,000 of liability insurance. If you have a personal umbrella policy, you’ll probably need $500,000 of liability coverage, he adds.

While boat insurance protects you financially, it’s wise to take other steps to protect you and your family.

“Anyone who spends time on boats should take a boating safety course,” McCarthy says.