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What is Watercraft Liability Insurance?

Updated: May 2017

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 watercraft insurance, you could end up paying out of pocket for damages 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. Consider also the potential expenses of covering damage to someone else's property, and even medical bills that may arise when people are injured. A watercraft insurance policy may help with these types of expenses, as well as provide some protection for the boat itself.

Small speed boat.


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How Does Watercraft Liability Coverage Help?

That's where watercraft liability coverage comes in. It's typically offered in a standard watercraft 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.

How Much Coverage Do I Have?

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 liability limit on a standard watercraft 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.

Don't Rely on Homeowners Insurance

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 watercraft insurance policy, with 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.

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This content is for informational purposes only and may not be applicable to all situations.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2019 Allstate Insurance Company, Northbrook, IL.
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