Liability-only boat insurance coverage is the most affordable policy you can buy. It’s much cheaper than full-coverage boat insurance because it only protects you against damages to others.
It’s important to consider the accompanying financial risk before selecting a liability-only policy. Here are some things to consider before making the switch.
What is liability-only boat insurance?
Typically, liability-only boat insurance will include coverage for bodily injury liability and property damage liability. These will pay for damages for injuries or property damage to third parties for which you are liable. This coverage is often required by lenders, marinas, and storage facilities.
Liability-only notably lacks coverage for some of the most significant risks involved with owning and operating watercraft. That’s why you may want to consider comprehensive coverage to protect your boat or watercraft.
In summary - liability insurance only pays for the bodily injury and property damage to others when you are at fault.
How much cheaper is a liability-only policy?
A liability-only policy is significantly cheaper than comprehensive coverage. At SkiSafe, for example, our liability-only options could cost you as little as $85/year.
A comprehensive liability coverage package may include:
- Property Damage Liability: helps pay for property damage to a third party for which you are liable
- Bodily Injury Liability: coverage for personal injuries to a third party arising from the use of your boat for which you are liable
- Uninsured Boater Coverage: coverage for damage to your craft caused by another boater who is uninsured
- Medical Payments Coverage: provides coverage for medical expenses of third parties injured in an accident involving your boat, regardless of fault.
- Environmental Coverage: coverage for cleanup costs from an accidental fuel spill and more
A comprehensive insurance policy that protects you against these risks and more will also cost more.
Forgoing comprehensive coverage will put you at much greater financial risk if you were in an accident. Opting for liability-only coverage leaves most of the risk involved with owning and operating watercraft with the insured rather than the insurer. Therefore your insurance bill is seriously reduced.
What if my boat is totaled or stolen and I only have liability insurance?
If your boat is totaled - meaning the cost to repair it exceeds its value - or stolen, your liability insurance would not cover such a claim. You will be responsible for paying to replace the watercraft yourself if you were at fault. Liability insurance will only help to cover the costs of other people’s property and medical bills.
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Should I get a liability-only boat insurance policy?
Oftentimes, boat owners with older, less valuable vessels will consider switching to a liability-only policy. As the boat ages, different comprehensive coverages will become less valuable and a liability-only option may make the most sense.
Here are some things to consider before making the switch to a liability-only policy:
- If your boat was stolen or totaled, could you afford to replace it?
- Are you exposed to regular, severe risks when boating?
- How often do you go out on the water?
- Are you boating in a high-risk, accident-prone area?
Keep in mind - you may still be required to hold certain coverages by your lender. Most banks and credit unions will make insuring your boat a condition of the loan as a way to protect their investment.
If you eventually decide to drop certain coverages, we highly recommend having an emergency fund dedicated to your boat. Something that may seem like a minor repair could prove to be quite expensive. If you do not think you can afford these potential out-of-pocket costs, consider a comprehensive boat insurance policy .