What Is Boat liability insurance?

By Allstate

When you plan to spend a day on the water, the last thing you expect to happen is an accident. But they do occur, and without boat insurance, you could end up paying out of pocket for damage caused by an accident involving your boat or personal watercraft.

If you think about it, the financial burden of a boating accident isn't just limited to the cost to repair or replace your own boat. You should also consider the potential expenses of covering damage to someone else's property, and even medical bills that may arise when people are injured. Boat liability insurance, a common coverage in a boat insurance policy, may help pay for these types of expenses.

What does boat liability insurance cover?

Boat liability insurance, which also may be called watercraft liability coverage, typically contains two types of coverage:

  • Watercraft bodily injury liability coverage:
    May help prevent you from paying out of pocket for medical bills and other related costs — like loss of income — when someone is injured in an accident you caused with your boat or personal watercraft.
  • Watercraft property damage liability coverage:
    May help cover the costs of repairing or replacing another person's boat or property when you damage it in an accident with your boat. This type of coverage typically kicks in after a collision, but it may also help in other scenarios. For instance, if you have an accidental fuel spill that damages someone's property, watercraft liability insurance may help cover clean-up costs. Liability insurance may also help pay for wreckage removal if a covered boat accident requires raising, removing or towing your watercraft from the water.

It's important to note that boat liability insurance does not cover your medical bills or your boat repairs after an accident. You may want to look into medical payments coverage or boat property coverage for help with your own expenses after a boating accident.

How much boat liability coverage do I need?

Boat liability coverage — like all insurance coverages — comes with a limit, which is the maximum amount an insurance company will pay toward a covered claim. When you're selecting your boat liability coverage limits, you may want to consider the following:

  • Could you afford to pay out of pocket for someone else's medical bills if you cause a boating accident that injures them?
  • If you accidentally damage someone's boat or other property with your own boat, could you afford to pay for their repairs?

Check with your insurance agent to see what liability coverage limits are available on your boat insurance policy. They can help you purchase the right amount of liability coverage for your situation. Keep in mind that higher boat liability coverage limits will likely increase the premium amount you pay.

For even greater protection, boat owners may want to consider purchasing a personal umbrella policy, which provides increased liability limits for your boat, beyond what's offered by a standard boat insurance policy. Umbrella coverage typically starts with a $1 million coverage limit.

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Don't rely on homeowners insurance to protect your boat

You may think your homeowners policy covers your vessel — but it typically doesn't. And when a homeowners insurance policy does offer coverage, it's usually limited to small boats, like canoes, small sailboats or small power boats with less than 25-mph horsepower, according to the Insurance Information Institute. The personal property coverage limit for physical damage to small boats may be as low as $1,500, according to the National Association of Insurance Commissioners (NAIC). Liability coverage for a boat is typically not included, or is limited, under a standard homeowners policy, the NAIC says.

You've likely invested a decent amount of time and money into your boat. Having the right insurance coverage in place can help protect you and your investment against risks while on the waterways.