Am I required by law to insure my boat?

The simple answer to whether boat insurance is mandated by law is “no.” However, the overall legal aspects of boating and boat insurance are far more complex. Though boat insurance is not currently required by law in any states, that does not diminish the importance of carrying adequate coverage. Likewise, even though boating laws do not yet address insurance matters, they do contain other provisions that can affect boaters in other ways. Read on for more information about the legal matters related to boat insurance and why coverage is imperative regardless of the law.

Laws vs. Lenders

Your state’s laws may say you can boat without insurance coverage, but your lender will say otherwise. Almost all boat loan lenders require borrowers to demonstrate proof of boat insurance coverage before they will close on the loan. The boat must be insured for its full value before the borrower will be able to take ownership. In other words, unless you pay for your boat in cash, you will have to purchase boat insurance in order to satisfy your lender’s requirements.

A Valuable Asset

You wouldn’t leave expensive assets like your home or your car uninsured, so why would you consider leaving your boat without coverage? Boats are valuable assets, and you would have full financial responsibility for any damage to your vessel if an unfortunate event occurred. One storm, collision, or theft could mean the loss of the entire value of your boat. If you can’t afford to absorb that cost, you need to purchase insurance even though it’s not legally required.

Liability Protection

Losing your boat looks like nothing compared to what a liability claim could do to your assets. If you cause injuries or property damage to another with your boat, you could face a legal judgment that might put all of your assets up for grabs. If you were found legally responsible, your home, car, personal savings, investments, retirement funds, and more would all be fair game to cover the settlement. By not carrying boat insurance liability coverage, you are literally risking everything you have every time you go out on the water.

Protect Yourself When the Law Doesn’t

Because liability coverage is not required for boaters, there is a good chance you might be hit by an uninsured boater. If the boater does not have the assets to pay for the ensuing damages or injuries, you would have nowhere to turn unless you carried uninsured boater coverage. This is an optional coverage on most boat policies that is strongly recommended. Typical uninsured boater coverage would reimburse you for the injuries and/or damages that the uninsured boater caused.

Medical Expenses

If you have adequate health insurance, you probably don’t need to worry about adding medical payments coverage to your boat policy. However, if you do not have health insurance or you have a minimalist policy, you might consider including medical payments to your coverage. This coverage will pay for your medical expenses and those of your passengers if you are injured.