Updated: September 2016
When you plan to spend a day on the water, the last thing you expect to happen is an accident.
But they do occur. In 2015 alone, there were 4,158 recreational boating accidents with 2,613 injuries and $42 million in related property damage, according to the U.S. Coast Guard.
Without boat insurance, you could end up paying out of pocket for damages caused by an accident. 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. Consider also the potential expenses of covering damage to someone else’s property, and even medical bills that may arise when people are injured.
That’s where watercraft liability coverage comes in. It’s typically offered in a standard boat insurance policy, and it generally helps provide protection in two ways:
- Bodily injury: It 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 that you caused.
- Property damage: It may help cover the costs of repairing or replacing another person’s boat or property when you damage it in an accident. 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.
It’s important to know that your watercraft liability coverage — like all insurance coverages — will come with a limit, which is the maximum amount the insurance company will pay toward a covered loss.
The Insurance Information Institute (III) says the watercraft liability limit on a standard boat insurance policy typically starts at $15,000, but you may be able to significantly increase your coverage limit. Your local agent can provide information about coverage limits so you can set the amount that is right for you.
For even greater protection, the III suggests that boat owners consider purchasing what’s called a personal umbrella policy, which not only provides additional liability coverage for your boat, but extends that extra protection to the liability coverage on your home or car insurance policy.
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 and small sailboats or small power boats with less than 25-mph horsepower, according to the III. The property coverage limit that can be as low as $1,000. Liability coverage for a boat is typically not included at all under a standard homeowners policy, the III says.
That’s why a separate boat insurance policy, with watercraft liability coverage, may make sense for you. After all, you’ve invested time and money into your boat — putting the right insurance in place may help protect you and your investment against the risks out on those busy waterways.