Is Cheap Boat Insurance Worth The Disadvantages?

Some people opt for cheap boat insurance, hoping to save money on the cost of owning a boat. However, while there are a number of advantages to having inexpensive insurance for your boat, there are drawbacks as well.

You may find that in the long run, the costs of cheap boat insurance may actually be higher than purchasing a more expensive policy in the first place.

Using Homeowners Insurance to Save

Some boat owners choose to use their own homeowner’s insurance for their boat and not add any extra liability or personal injury coverage.

Your homeowners policy will generally have liability coverage and personal injury coverage, and these policies will generally kick in when you have hurt someone or something else with you boat.

While using the existing homeowners policy will be cheaper, it may also cause problems. If you have a claim because of your boat, for instance, your premiums are very likely to rise on your homeowner’s policy.

Additionally, your homeowner’s policy may not have adequate or appropriate coverage for marine accidents. There may be exclusions and limits built into your homeowner’s policy won’t cover all the claims. This could leave you personally liable for any additional claims.

Agreed v. Actual Cash Values

Another way boat owners get cheap boat insurance is to opt for the less expensive actual cash value option on the damage coverage portion of boat insurance.

Actual value means that when there is a loss, the damage is only covered up to the actual market value of the boat, minus depreciating and deductions for any damage to the vehicle.

Although these policies save some money upfront, making them good for cheap boat insurance, they can also leave you exposed to a great deal of risk. In the event of an accident, theft, hailstorm, or any other loss, you may get so little in coverage from the insurance agency that the costs leave you unable to repair or replace your boat.

However, with agreed value insurance for your boat, the underwriter and you, the boat owner, agree on a value for the boat when you first insure it. Then if there is ever a need for you to file a claim, you do not worry about depreciation or deductions for damage.

If your boat is a total loss, then you will recover the agreed upon value of the boat, without quibbling.

Small Agencies

Sometimes small agencies offer cheap boat insurance, and sometimes they do offer really great deals.

However, be sure that the value of the insurance is good before simply jumping at a lower cost.

Talk to other boat owners and read reviews online. Be sure that the company has a good reputation for being fair and for paying claims honestly.

Also look the insurance company up on the Ambest insurance rating page to be sure the company has an A rating or better.


With cheap boat insurance, many people forego the riders for wreck removal, towing, electronic equipment, freeze damage, and hurricane haul out.

While it may save money at the first, if any of these problems did arise, the savings could quickly be offset by the cost of the task.

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