Texans love boating. The state ranks sixth in the nation for the most boats totaling 624,390 registered watercraft, and with over 150 lakes, thousands of streams, 15 major rivers, and the Gulf of Mexico, it is clear to see why the Lone Star State is filled with boating enthusiasts.
Owning a boat leads to many joys in life. There is fishing, recreational activities, hunting, and simply taking your watercraft out for a ride which can create lasting memories for you and your family. But with the joys of boat ownership come the responsibilities including upkeep, safety measures, and protecting yourself and your finances. Boat insurance is an important tool to ensure that a day out on the water doesn’t end in financial hardship for you and your family.
Boat insurance can be intimidating for boat owners of any experience. From a first-time boater to an experienced captain, it doesn’t matter where you fall, you are bound to have questions about your protection and the value a policy can bring to you. Navigate these murky waters below through our helpful guide on all things boat insurance to understand how you are protected and where to obtain coverage that won’t break the bank.
Is Boat Insurance Required in Texas?
No, there is no law mandating boat insurance in Texas; however, there are still many benefits of coverage. Freedom Insurance Group always recommends carrying a boat insurance policy to protect against losses involving physical damage to property and potential liability issues.
How Much Boat Insurance Do You Need?
The amount of boat insurance you’ll need will vary from boater to boater. Insurance is built to protect you against losses. You’ll want to be sure that you carry enough protection to protect your assets and fully restore damaged property. Many industry experts recommend holding $1 million in liability coverage, though your coverage needs may vary.
What Boat Insurance Covers
Understanding what boat insurance in Texas covers and how it reimburses you after a loss is the first step for determining which policies you need. Boaters have many concerns starting with property and injury liability and extending to much more, including the unexpected. Boat insurance helps mitigate such losses and protect your finances. Explore your coverage options below and how your reimbursement works depending on your policy.
Actual Cash Value (ACV) vs. Agreed Amount Value
Boat owners need to understand how they are compensated for a loss after filing a successful claim. When it comes to boat property policies, there are two options for policyholders:
- Actual Cash Value (ACV)- Factors in depreciation when reimbursing you for repairs.
- Agreed Amount Value- Will pay for your repairs based on the agreed-upon valuation by you and your insurance provider at the time of purchasing your coverage.
The type of coverage you choose will affect how much you pay for your boat insurance premium and the amount you receive in compensation after a claim.
There are two types of property coverages available for boat owners. A property liability policy will protect your finances should you cause an accident and cause damage to another boater’s watercraft. Boat property coverage helps protect your watercraft from damage from accidents on land or water. Depending on your policy, you’ll also receive protection against boat theft. You’ll need to choose between ACV or an Agreed Amount Value basis for your coverage.
Bodily Injury Coverage
Instead of paying out of pocket for medical expenses or loss of income for another party that may occur after an accident you’ve caused, this coverage will provide financial protection to restore the loss.
Medical Payments Coverage
Your medical payments coverage will pay for the medical expenses of your passengers in the event there is an accident.
Just like an auto policy, but for watercraft. Your comprehensive coverage is there to protect you from losses involving the unexpected that aren’t connected to accidents including fires, weather-related damage, damage from natural disasters, etc.
Protection against collisions involving objects as opposed to other watercraft. For example, if your watercraft were to hit a submerged dock or tree that would cause damage, your coverage would help you pay to restore the damages.
Uninsured Watercraft Coverage
A coverage option built to protect you if someone without insurance were to cause damage to your watercraft during a crash.
Your Boat Insurance Policy Protects Various Watercraft
When considering boat insurance, it can be easy to think of a fishing boat and call it a day, but there is a variety of watercraft that can benefit from your coverage. Different watercraft will come with different coverage needs and premiums, but all of them deserve protection, as a loss can cost you a considerable amount to restore alone. Take a closer look at some of the many watercraft in Texas eligible for boat insurance:
- Personal Watercraft (PWC) such as jet skis.
- Dinghies and Tender Boats.
- Professional/Charter Boats.
Boat Insurance Cost in Texas
Determining the cost of your boat insurance will mean looking at a variety of factors. Insurance companies compile various data points and will calculate these figures based upon their own algorithms and metrics to create a premium for your coverage. In Texas, the average boat insurance policy can range from $300+ per year to up to around $1,000 per year. Here are some of the important factors insurance companies will assess before determining your premium*:
- The age of your watercraft.
- The length of your watercraft.
- The type of watercraft you are insuring (fishing boat, sailboat, yacht, jet ski, etc.).
- The speed of your watercraft/if your watercraft has a motor or not.
- Where you live and where the boat will primarily be used (Ex: in a lake, ocean, or river).
- How and where you are storing your watercraft when it is not in use.
- Personal factors such as your age, marital status, and claims history.
- Your driving record.
- The number of safety features on your boat/if your boat meets U.S. Coast Guard Standards at the time it was built.
- The type of coverage you choose, the amount you enroll in, and your policy’s limits.
- Homemade boats without serial numbers.
- If your boat has more than two owners.
- Houseboats lacking a motor.
- Your deductible.
*Some information sourced from Discover Boating.
As you can see, some of these factors are within your control, while others are not. Controlling what you can control by practicing safe boating habits and proper maintenance can help you reduce your risks and your rates.
Boat Insurance Discounts
Boat owners have several options at their disposal when it comes to receiving a discount on their insurance policies. Not everything will apply to everyone, but these are some of the most common ways you may qualify for boat insurance discounts*:
- Bundling your boat insurance policy with another insurance policy, such as your home or auto policy, provides some of the best opportunities for savings.
- Having safety equipment on board helps lower your rate and keep you and others safe. Some common examples include fire extinguishers approved by the U.S. Coast Guard, radio equipment, and personal flotation devices (PFDs).
- Taking boating safety courses can lower your monthly premium.
- Storing your boat securely during the offseason is another trick for paying less in boat insurance premiums.
- Freshwater usage will lower your rate as compared to a watercraft that is primarily used in saltwater.
- Going claims free for a prescribed period may present discounts depending on your insurance provider.
- Diesel watercraft are less likely to explode than gasoline-powered watercraft and may also receive a discount on their coverage.
*Some information sourced from theInsurance Information Institute (III).
Where to Get Boat Insurance in Texas
Since 2005, Freedom Insurance Group has served the state of Texas by providing affordable coverage options built to protect you. We work with 25+ top-rated insurance brands, allowing our team of agents to compare your coverage needs among reliable, financially strong insurance brands to find the lowest rate on the market.
Each person’s coverage needs are different, but the goal is the same for all boaters. Finding the lowest possible price without cutting coverage. By taking a personalized approach to your needs, we can help you save money. Our average customer saves around 40% when switching, and we can even bundle your coverage with your home and auto insurance policies for more savings. Speak with one of our agents today to learn more about finding the right boat insurance for your needs without overpaying.
Additional Boat Insurance Coverage Options
Depending on your risks and the level of protection you feel comfortable with, many different options can help cover things not included in a standard boat insurance policy. Speak with your insurance agent and assess your coverage needs to find any additional boat insurance options you might benefit from.
Trailer and Boat Accessory Coverage
Protection for your boat trailer and the various accessories on your watercraft. Simply put, covering the items on your boat can fall under many different categories including homeowners insurance, your boat policy, and more. This coverage helps non-permanent instruments/machinery which may require additional coverage when facing a loss. For boat owners with specialized equipment, speak with your insurance provider about the coverage options available to you.
If you need to tow your watercraft, the costs can add up. Depending on your vessel and your distance, it can cost you hundreds of dollars if not more. Towing coverage is an affordable option to help offset these costs to help alleviate an already stressful situation.
Salvaging a vessel can exceed several thousand dollars even if you undertake this exhausting task without professional help. Doing it alone can also lead to more damage and costs, however, as you risk damaging your watercraft and personal items. Protect your finances with this unique coverage to help you restore a major loss with less of a headache.
Consequential Damage Coverage
Boat insurance does not cover wear and tear and considering watercraft spend a substantial amount of time in potentially damaging environments, there is a lot of damage that can occur. Both salt and freshwater vessels have to deal with potential water damage, mold, rotten boat components, rust, and more. Consequential damage is a policy built to help boat owners prepare for such losses and offset some of the costs of restoration.
Cruising Extension Coverage
Your boat insurance policy will protect you from many different perils…so long as you are in the United States. For boaters looking to enter international waters or those of another country such as Mexico, cruising extension coverage is highly recommended. There’s no point in purchasing protection if it can’t follow you where you need it. International boaters should consider this insurance option to avoid coverage gaps.
Boat Theft Coverage
Not all boat property policies come with boat theft protection. For boaters looking to protect against such perils, additional coverage may be available. This is a particularly attractive option for boaters who are unable to store their watercraft in a more secure area, though, higher premiums will apply.
Personal Property Protection
Your boat insurance policy may cover personal items damaged or stolen while on your boat. Your insurance provider may also offer additional coverage options to protect against such losses as well. But in most cases, you’ll need to refer to your homeowners insurance policy and rely on its protection regarding personal belongings.
Water Sports Coverage
Protection against injury or damage caused while participating in water sports including skiing, wakeboarding, tubing, etc. Activities that include pulling someone through the air by a boat, however, will not be covered by your policy.
Boat Insurance Coverage Questions (FAQs)
Owning a boat is a rewarding endeavor, but comes with many additional responsibilities. Among these challenges is protecting your watercraft and your financial future in the event of a loss. We here at Freedom Insurance Group understand the different challenges that are facing boaters and are here to help. Please feel free to contact us about all of your boat insurance coverage questions, or, refer below to some of the more common questions we receive regarding protection.
It depends. Some boat insurance policies do offer protection for blown motors; however, this varies by insurance brand and policy. You’ll also note that your boat insurance policy will not cover a blown motor that is caused by neglect from you, the owner.
Most boat policies aren’t going to cover this loss and you may either be relying on a warranty or be forced to restore the loss out of pocket. Because each policy is different, we recommend consulting your insurance agent to review your policy for the best understanding of your protection.
Sudden and accidental damage to your boat’s transom may be covered depending on your boat insurance policy. If the transom is damaged from wear and tear causing a crack and additional water damage, you’ll likely have to restore your loss on your own. Some policies may only repair cracked transoms as opposed to replacing them, and the entire claim is a complicated issue at best. Be sure to speak with your insurance agent and review your individual policy to best understand your coverage.
Yes, your boat insurance policy will likely help you restore your loss by covering damage from storms. Some policies may also include protection for things such as fishing gear, but each policy is different. It is always best to review your policy with your insurance agent to best understand how you are protected, understand your deductible, and gain knowledge regarding your policy’s coverage limits. Common storm-related perils watercraft are protected by boat insurance in Texas against include damage from lightning, wind/hail storm damage, and even flood damage.
Note: Depending on the size of your boat and the terms of your policy, you may have a responsibility to move your watercraft from a designated area experiencing or expected to experience tropical storm-like activity. Failure to do so could mean that you are not covered against any losses that occur during a storm.
Marine surveys are commonly needed for obtaining insurance, however, owners of new watercraft may be able to skip this step. The bottom line? It all depends on the insurance brand that takes you on as a client.
Boat insurance, like most policies, isn’t blanket coverage. Some many exclusions and terms will apply to your coverage, and the best way to know what isn’t covered is to refer to your boat insurance policy. However, here are some of the more common scenarios which may cause a gap in coverage as a standard boat insurance policy doesn’t typically cover the loss:
- Damage related to wear and tear or issues that fall under general maintenance, including infestations or defective machinery, aren’t covered.
- Blown motors may also be excluded from your coverage depending on the terms and conditions of your boat insurance policy.
- Personal items and custom equipment are often excluded without additional coverage. This includes your transom.
- Boat trailers are not covered, nor are damages that occur during travel if it is done incorrectly.
- Your boat isn’t covered during storage if it is not kept in a secure location.
- High-risk behaviors, including high-speed boat races, aren’t covered.
- Traveling outside of the country without Cruising Extension coverage can also result in a coverage gap should a loss occur.