When you drive a car on Minnesota public roads, the state requires that it be insured. Minnesota also requires proof of insurance when registering an automobile. So you may be surprised to learn that the state does not require watercraft coverage. You can register your boat and use it on public lakes and rivers in our state with no insurance protection at all.
But while it is legal to skip Watercraft insurance, this is probably not be wise. While most boats are operated safely on Minnesota waters, each year there are dozens of boating accidents and a number of boating fatalities. If the worst happened and you were found legally responsible for a serious injury out on the water as the boat operator or owner, you could face a financially catastrophic loss if you weren’t carry Liability coverage on your boat.
The good news is that many owners of outboard-powered boats might have Liability coverage and not even be aware. This is because many Homeowners and Renters policies automatically extend Liability coverage to watercraft with outboard motors up to a certain horsepower, even while away from home out on the water. The maximum horsepower varies depending on the policy; a 50 horsepower limit is fairly common, but we also see policies with cut-offs as low as 25 and as high as 100 horsepower. We even represent one carrier offering Liability coverage to all outboard-powered boats, regardless of horsepower.
This automatic Homeowners coverage usually extends to most non-motorized boats as well, such as canoes, kayaks, row boats, paddle boats and small sailboats. However, generally speaking, your Homeowners policy won’t provide any protection for boats powered by inboard, stern drive or jet engines.
If you find that your boat is not automatically covered for liability by your Homeowners policy, you might be able to add this coverage to your policy for a small additional charge, depending on the type of engine and what your carrier offers. However, if this is not an option under your Homeowners policy, then your only course of action may be to buy a separate Watercraft policy.
Speaking of a separate Watercraft policy, this is a good option to consider regardless of whether your Homeowners policy provides any coverage or not. Because a good Watercraft policy can provide a lot of other worthwhile coverage beyond just basic Liability.
For starters, if your boat has value, you probably want to buy physical damage coverage. (And you won’t have any choice if you have a loan.) While you can sometimes watercraft physical damage coverage this to your Homeowners policy as well, we find that a separate Watercraft policy is usually a better value to fully insure your boat. Not only are the rates typically lower, but coverage terms are often better as well. For example, some of our policies offer Agreed Value coverage for most watercraft and replacement coverage if you just purchased your boat new. These are not options offered by most Homeowners policies.
In addition, a specialized Watercraft policy may allow you to choose from a number of other valuable coverages for your boat, such as financial protection if you were injured by an uninsured boater, fuel spill cleanup, basic medical coverage if there is an accident on your boat, on water towing and roadside assistance, coverage for personal effects and fishing equipment and more.
In summary, you may find the basic, built-in coverage under your Homeowners or Renters policy to be a good fit for an outboard-powered, occasional-use boat without much horsepower or value. In most other situations, a separate Watercraft policy is usually the way to go. Often starting at as little as $100 to $250 per year, Watercraft policies are usually quite affordable as well.
Because Homeowners and Watercraft policies vary from carrier to carrier, it is important to read your own policy carefully. Not all residential policies provide coverage for any outboard-powered watercraft. While this post summarizes coverage frequently found in many cases, it does not fully detail all the terms and conditions of your policy.
Ken Cobb is owner of Pine Country Insurance and has been active in the insurance industry for over 15 years. Meet Ken.
Coverage descriptions found in this blog are summaries provided for general educational purposes and cannot fully detail the terms, conditions, limitations or exclusions of a specific insurance policy. Please read your policy carefully.