Boat Insurance Requirements by State: Complete Guide (2025)

Quick Answer: Is Boat Insurance Required?

Most states don't legally require boat insurance—but lenders, marinas, and federal regulations often make it mandatory.

Bottom line: While not legally mandated in most states, you'll likely need boat insurance to legally operate, dock, or finance your vessel.

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States That Require Boat Insurance

Arkansas (Only State with Universal Requirement)

Arkansas is the only state that requires all boat owners to carry liability insurance.

Arkansas Requirements:

• Minimum coverage: $50,000 liability
• Applies to: All motorized boats operating on Arkansas waters
• Proof required: Must carry insurance documentation on vessel
• Penalties: Fines up to $1,000 and potential boat impoundment

Arkansas Statute: Ark. Code § 27-101-104

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States with Limited Requirements

Several states require insurance only for specific boat types:

Utah - Personal Watercraft (PWC)

• Requirement: Liability insurance required for Jet Skis and PWCs
• Minimum coverage: $25,000 per person / $50,000 per accident
• Applies to: Personal watercraft only (not regular boats)

Hawaii - Thrill Craft

• Requirement: Liability insurance for personal watercraft
• Minimum coverage: Similar to auto insurance minimums
• Registration: Must show proof at registration

Minnesota - High-Powered Boats

• Requirement: Liability coverage for boats over 50 horsepower in some counties
• Local ordinances: Check county-specific rules
• Applies to: Primarily motorboats

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Federal Boat Insurance Requirements

While states rarely require boat insurance, federal regulations sometimes do:

U.S. Coast Guard Regulations

Charter boats and commercial vessels:

• Liability insurance required for commercial operations
• Minimum coverage varies by vessel size and passenger capacity
• Must file proof with Coast Guard

Recreational vessels:

• No federal insurance requirement for private use
• However, must meet safety equipment requirements

Boat Registration Requirements

Most states require boat registration but NOT insurance:

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When Boat Insurance Is Mandatory

Financed or Leased Boats

Lenders always require comprehensive boat insurance:

Required coverages:

• Hull coverage (physical damage to boat)
• Liability coverage (typically $300,000 - $500,000)
• Lender named as lienholder on policy
• Deductible limits (usually max $1,000-$2,500)

Until the loan is paid off, you cannot drop coverage.

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Marina and Dock Requirements

Most marinas require proof of insurance before allowing docking:

Typical marina requirements:

• Liability coverage: $300,000 - $500,000 minimum
• Hull coverage: Replacement value of boat
• Marina named as additional insured on liability policy
• Certificate of Insurance provided annually

Why marinas require insurance:

• Protect against damage to docks and other boats
• Liability for injuries at the marina
• Environmental damage (fuel spills)

Without insurance, you won't get a slip.

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Boat Club and Rental Requirements

Boat clubs and rental companies always require insurance:

• Clubs typically provide coverage in membership fees
• Renters must show proof of insurance or purchase coverage
• Peer-to-peer rental platforms require verification

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Types of Boat Insurance Coverage

Hull Coverage (Physical Damage)

What it covers:

• Collision damage
• Fire and explosion
• Theft and vandalism
• Storm and weather damage
• Sinking

Coverage types:

• Agreed Value: Pays agreed-upon value regardless of depreciation (best option)
• Actual Cash Value: Pays current value minus depreciation
• Replacement Cost: Pays to replace with new boat (rare, expensive)

Typical deductibles: $500 - $2,500

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Liability Coverage

What it covers:

• Bodily injury you cause to others
• Property damage (other boats, docks, piers)
• Legal defense costs
• Medical payments for injured passengers

Recommended limits:

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Medical Payments

Covers medical expenses for:

• You and your passengers
• Injuries while boating (regardless of fault)
• Typically $1,000 - $10,000 per person

Why you need it: Health insurance often excludes boating injuries or has high deductibles.

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Uninsured Boater Coverage

Covers you when hit by:

• Uninsured boaters (those with no insurance)
• Underinsured boaters (insufficient coverage)
• Hit-and-run boating accidents

Recommended: Match your liability limits (if available)

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Additional Coverages

Personal Effects

• Covers fishing gear, water skis, electronics
• Typically $1,000 - $5,000 limit

Towing and Assistance

• On-water towing to nearest repair facility
• Similar to auto roadside assistance
• Typical limit: $500 - $1,500

Fuel Spill Liability

• Cleanup costs if your boat spills fuel
• Environmental fines and penalties
• Recommended: $50,000+

Trailer Coverage

• Physical damage to boat trailer
• Often included or available as add-on

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Boat Insurance Requirements by Boat Type

Sailboats

Requirements:

• Hull coverage based on value
• Liability: $300,000 - $1,000,000
• Haul-out coverage (for repairs ashore)
• Racing coverage (if you race)

Special considerations: Mast and rigging coverage, canvas and sails, dismasting coverage

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Motorboats and Powerboats

Requirements:

• Hull coverage for vessel
• Liability: $300,000+
• Engine coverage (outboard theft common)

Horsepower affects rates: Higher HP = higher premiums

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Yachts (40+ feet)

Requirements:

• Higher liability limits: $1,000,000 - $5,000,000
• Agreed value hull coverage
• Navigational range (coastal vs. offshore)
• Professional crew coverage (if applicable)
• Comprehensive coverage mandatory

Specialized yacht policies required for vessels over $500K or 40+ feet.

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Personal Watercraft (Jet Skis)

Requirements:

• Hull coverage: $5,000 - $20,000 typical
• Liability: $100,000 - $300,000
• Mandatory in Utah and Hawaii

Why PWC insurance is expensive:

• Higher accident rates than boats
• Younger operators
• Frequent theft

Average cost: $200 - $500 per year per PWC

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Fishing Boats

Requirements:

• Hull coverage based on value
• Fishing equipment coverage ($5,000+ often needed)
• Trolling motor coverage
• Liability: $300,000+

Tournament anglers: Consider higher equipment limits ($10,000-$25,000)

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State-by-State Boat Insurance Summary

States Requiring Insurance

States with NO Requirement (47+ States)

Most states don't require boat insurance, including:

• California
• Florida
• Texas
• New York
• Michigan
• Minnesota (except some counties)
• All other states not listed above

However: Even in states without requirements, you'll likely need insurance for lenders, marinas, and practical liability protection.

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How Much Does Boat Insurance Cost?

Cost varies widely based on boat type, value, and usage:

Average Annual Premiums by Boat Type

Rule of thumb: Boat insurance typically costs 1-1.5% of boat's value annually.

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Factors That Affect Boat Insurance Rates

Boat factors:

• Age and condition of vessel
• Value and replacement cost
• Type of boat (PWC costs more than pontoon)
• Engine size and horsepower
• Safety features (GPS, fire suppression)

Usage factors:

• Where you boat (coastal vs. inland)
• How often you use boat
• Storage (marina vs. trailer vs. dry stack)
• Navigational range (how far offshore)

Operator factors:

• Boating experience and age
• Boating safety course completion (10-15% discount)
• Claims history
• Number of operators

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Ways to Reduce Boat Insurance Costs

1. Take a boating safety course - 10-25% discount
2. Increase deductible - $2,500 deductible vs. $500 saves 15-20%
3. Bundle with auto/home - Multi-policy discount 10-25%
4. Install safety equipment - GPS, VHF radio, fire suppression
5. Lay-up period - Suspend coverage during winter storage
6. Pay annually - Avoid monthly financing fees
7. Join boat owner association - Some offer group insurance rates

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What Happens If You Boat Without Insurance?

Legal Consequences (Arkansas Only)

Arkansas penalties:

• Fine: Up to $1,000
• Boat impoundment
• Registration suspension
• Criminal charges possible

Other states: No legal penalty (except Utah/Hawaii for PWC)

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Practical Consequences (All States)

If you cause an accident without insurance:

• Personal liability for all damages and injuries
• Medical bills: Can reach $100,000+ per person
• Property damage: Yachts can cost millions
• Legal defense: $50,000+ for serious injury lawsuits
• Wage garnishment and asset seizure possible

Example: You crash into a docked yacht worth $500,000 and injure two passengers requiring $150,000 in medical care.

• Total damages: $650,000+
• Your liability without insurance: $650,000 out-of-pocket

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Marina and Lender Consequences

• Cannot dock at most marinas
• Cannot finance boat purchase
• Existing loans may be called due
• Eviction from current slip

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Frequently Asked Questions

Is boat insurance required by law?

Only in Arkansas (all motorized boats), Utah (PWC only), and Hawaii (PWC only). However, lenders and marinas almost always require it, making it practically mandatory even where not legally required.

Does homeowners insurance cover my boat?

Partially. Most homeowners policies cover small boats (under 25 HP or under $1,000 value) with limited liability. Larger boats, motors, and trailers are typically NOT covered. Dedicated boat insurance is needed for most boats.

Do I need boat insurance if I don't have a loan?

Not legally (except Arkansas, Utah, Hawaii for certain boats). However, you need it to dock at most marinas and to protect yourself from liability. One serious accident could cost hundreds of thousands in damages.

How much liability coverage do I need on my boat?

Minimum $300,000, but $500,000 - $1,000,000 is recommended for most boats. Boating accidents can easily exceed $300,000 when multiple people are injured or expensive boats are damaged.

Does boat insurance cover damage from hurricanes?

Yes, if you have hull coverage (physical damage). However, there may be special requirements like timely haul-out (removing boat from water when hurricane warning issued) and securing the vessel properly.

Can I insure a boat that's not registered in my name?

Generally no. You must have insurable interest in the boat, meaning you own it or have financial interest in it. Some insurers allow co-ownership coverage.

What's the difference between agreed value and actual cash value?

Agreed Value pays the agreed-upon amount regardless of depreciation (better option). Actual Cash Value pays current market value minus depreciation, which decreases each year. Agreed value costs 10-15% more but provides better protection.

Do I need boat insurance in the winter when it's stored?

Yes. Comprehensive coverage protects against theft, fire, vandalism, and weather damage during storage. Some policies offer "lay-up" periods with reduced coverage and lower premiums during storage months.

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How to Get Boat Insurance

Step 1: Gather Boat Information

• Make, model, and year
• Hull identification number (HIN)
• Length and engine size
• Purchase price or current value
• How boat is stored
• Where you'll operate boat

Step 2: Get Multiple Quotes

Contact:

• Boat insurance specialists (BoatUS, Progressive, Geico Marine)
• Your auto/home insurer (bundle discount)
• Independent insurance agents (access to multiple carriers)

Get at least 3 quotes to compare.

Step 3: Compare Coverage

Don't just compare price—review:

• Agreed value vs. actual cash value
• Liability limits
• Deductibles
• Navigational limits (where you can boat)
• Lay-up credit availability
• Towing and assistance coverage

Step 4: Purchase and Maintain

• Purchase before taking delivery of boat
• Provide proof to lender and marina
• Update policy when value changes
• Complete boating safety course for discount
• Review annually and shop around

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Key Takeaways

• Only Arkansas requires boat insurance for all motorized vessels statewide
• Utah and Hawaii require insurance for personal watercraft (Jet Skis)
• Lenders always require comprehensive coverage for financed boats
• Most marinas require $300,000 - $500,000 liability coverage
• Recommended coverage: Hull (agreed value) + $500,000 liability + uninsured boater
• Average cost: 1-1.5% of boat value per year
• Boating safety course can save 10-25% on premiums
• Without insurance you risk financial ruin from one serious accident

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Important Disclaimer

This guide provides general information about boat insurance requirements based on state laws and industry practices. This is not legal or insurance advice. Requirements can change, and local ordinances may impose additional requirements.

Always verify current requirements with your state's boating agency, marina, and lender. Consult with a licensed marine insurance professional for advice specific to your vessel and situation.

Last verified: December 2025

Sources: State boating agencies, U.S. Coast Guard, National Association of State Boating Law Administrators (NASBLA), marine insurance carriers