Boat insurance: Benefits, cost, and ways to save | PEMCO

With its wild coastlines, pristine rivers, and tranquil lakes, the PNW is home to plenty of boaters, with Oregon ranking 13th among states with the most boats and Washington not far behind at 18th.  

Yet despite all those watercraft bobbing at marinas and dotting driveways, heatherowners aren’t always sure about the best way to protect their recreational investments. For the love of prevention, we asked our experts to weigh in on what you need to know about safeguarding your boat, what boat insurance covers and how it works, and how PEMCO’s  straightforward Mariner Policy (that doesn’t factor in depreciation after a total loss) helps you enjoy the freedom you crave on the water.  

Why would I need boat insurance? 

As a point of law, you don’t. Neither Washington nor Oregon requires boaters to carry insurance to legally operate a vessel. As a practical matter, though, you can put yourself at serious financial risk if you own a boat without adequate insurance – think damage to your boat or someone else’s (even when it’s docked) or, worse, injuries for which you might be liable if you’re found responsible for a boating accident.  

Marinas almost always require boaters to carry liability insurance, sometimes with substantial limits, before they can dock at their facilities. If you’re paying for your boat with a loan, your lender will require insurance coverage for the boat, the same as when you finance a car. 

Standard homeowners policies sold in the United States offer *limited* coverage for boats – generally, $1,000 for things like damage from wind, theft, or fire. But since many homeowners policies have deductibles of $1,000 or more (the amount you agree to pay out of pocket before coverage kicks in), filing a claim may not be worth it. If personal property is stolen from your boat, you also may be able to file a claim under your homeowners or renter coverage. 

Generally, homeowners or renter policies also offer some boat-related liability protection. However, they restrict the watercraft covered, for example, typically limiting the length of the boat (sailboats up to 26 feet, for example) and horsepower of the motor (less than 50 for an inboard or inboard/outdrive). They exclude personal watercraft like Jet Skis. Check your policy for specifics on how your home insurance provider handles boat claims or talk with your agent. 

Insurance experts usually recommend that you strongly consider boat insurance for watercraft other than small vessels like canoes, kayaks, and rowboats. 

How does boat insurance work? 

Similar to most boat insurance, PEMCO’s Mariner Policy is like a hybrid of car and home insurance, with some important differences. Like your car insurance, it covers the vehicle itself (which can include a power boat, sailboat, personal watercraft, motor, or trailer) as well as liability for its operation. And like your home policy, it provides protection for some of the belongings you carry onboard as long as you select that coverage option. However, it doesn’t handle depreciation the same way as either your car or home policy. 

PEMCO’s boat coverage is valid on inland water, lakes, or rivers within the lower 48 states of the United States or Canada. You’re also covered 75 miles off the Pacific coast (excluding Alaska) and up to 12 miles off the Queen Charlotte Islands’ western shore. 

How much does boat insurance cost?  

Boat insurance is surprisingly affordable – sometimes less than $1 per day for a typical pleasure boat. As with car insurance, rates depend on factors including but not limited to the type and value of your boat, where and how you use it, the coverages you select, and discounts for which you qualify. (More on that below.) 

PEMCO’s Mariner Policy is different from some other companies’ boat insurance because we insure your boat using “agreed-value coverage.” That means if your watercraft package (boat, motor, trailer) is destroyed or stolen, the amount we pay is determined by the value you and PEMCO agreed to when you bought the policy. That gives you peace of mind because your benefit doesn’t decrease because of depreciation. Compare that to car insurance, where available total-loss coverage declines over time along with your car’s value. 

What does PEMCO’s boat insurance cover? 

PEMCO’s Mariner Policy starts with the basics, similar to car insurance. It covers your boat, motor, and trailer for damage or theft, and it pays if you cause damage or injury to others (including legal defense costs). Just as with car insurance, you choose your coverage limits and deductible: 

• Physical damage. This coverage protects your boat and equipment and furnishings permanently attached to it. The damage may occur from an accident on the water, while towing on the road, or from weather if, for example, your boat gets pummeled at the dock during a storm. It also covers your boat if it’s vandalized or stolen.   

• Bodily injury liability. If an insured person is deemed responsible for injuring someone else on the water (whether they’re in your boat, their boat, swimming, diving, or waterskiing), your policy will pay up to the limits you choose. Your policy also picks up defense costs if you must go to court. 

• Property damage liability. Similarly, if an insured person is responsible for damaging someone else’s boat or the dock, ramp, or other property, this coverage will pay up to your limits, including court costs. 
   
  If your boat damages someone else’s property while it’s being towed, the insurance for the tow vehicle would pay the other person. If you tow frequently, you’ll want to make sure your auto policy is up to the job. 

Beyond the basics, you can customize your policy with three optional, additional coverages, which we highly recommend: 

• Underinsured boater coverage. This is similar to the coverage you have with your auto policy. If you or your passengers are hurt or your boat is damaged by another boater who has little or no insurance, you can count on this coverage to help. 

• Medical payments coverage. This protects you and your passengers if an accident on your boat results in an injury or fatality. It kicks in regardless of fault or other coverage you may have through your health insurance. 

• Replacement coverage for fishing gear. Get up to $10,000 in replacement coverage if your fishing gear is accidentally damaged or stolen.  

Insurance really is meant to take care of the big hits. But if it’s in your budget, these peace-of-mind optional coverages can go a long way in making a bad situation better: 

• Emergency service coverage. Get coverage for labor at the site of a breakdown, towing to the nearest repair facility, and delivery costs for fuel, oil, or a battery. 

• Mechanical breakdown coverage. This pays for certain parts of your outboard or the outdrive unit of your inboard/outboard boat if the breakdown is caused by normal wear and tear. 

• Replacement coverage for personal belongings. Add up to $5,000 to protect your gear (like clothing and sporting equipment). 

Save on boat insurance with bundling and discounts 

Since you already have a PEMCO policy for your home or auto (maybe both!), you can save by bundling your boat coverage with our Mariner Plus Discount. Besides saving money, bundling simplifies your life. You can contact us once for changes like updates to your address or bank account numbers for automated billing. You can easily add an extra layer of liability protection on top of the coverage you already have with an Umbrella Policy. You also can use the convenient PEMCO app for all things insurance – less clutter on your phone – with a “one-stop shop!” 

You’ll trim your cost for boat insurance further with discounts for: 

• Owning a home (whether or not you insure it with PEMCO) 

• Boating for three or more years without a claim 

• Insuring two or more watercraft (like your boat and Jet Ski) on the same policy 

• Taking a Coast Guard or Power Squadron safety course 

• Buying at least one day ahead of the policy’s effective date 

• Having an automatic fire extinguisher system 

• Using diesel fuel 

• Having a VHF radio. 

We’re all in on prevention because we’re all in on you  

Like most insurance, boat coverage isn’t one-size-fits-all, and if you’re buying it for the first time, it pays to talk with an expert rather than going DIY. Your local PEMCO agent or a representative at 1-800-GO-PEMCO can help you find peace-of-mind protection. 

And to fuel your love of prevention, be sure to check out our tips for boating safely, maintaining your boat, and protecting your boat from theft. Wishing you fair winds and calm seas as you enjoy the Northwest’s breathtaking waterways!