What does boat insurance cover and how does it work?

Whether you're fishing, skiing, swimming, or just cruising on the water, boat insurance is just as important as any other policy we have. Like homeowners and auto insurance policies, a boat insurance policy protects you from the unexpected. But how does boat insurance work in Texas? What does it cover? Check out our guide to boat insurance in Texas to find out!

Why boat insurance is so important

Is boat insurance required by law in Texas?

Unlike auto insurance, there are no laws in Texas that require insurance for your boat or watercraft. However, if you're considering purchasing a boat, jet ski, personal watercraft, or any other type of watercraft, having insurance is still essential.

Liability coverage

Some homeowners policies can potentially extend to your boat. However, very few of them have liability coverage. This is one of the biggest reasons having boat insurance is so important. 

Like auto insurance, the liability portion of boat insurance can help cover medical payments and injuries to others. Without it, you could potentially be on the hook for damages or hospital bills as a result of an accident.

Protecting your investment

Beyond liability, boats are a big purchase and a single accident could potentially sink your investment. Even on the water, collisions can happen, and mother nature can be unpredictable. Boat insurance can help you prepare for the unexpected by protecting your investment from potential damage and loss.

Types of boat insurance coverages and policies

Like most types of insurance, boat insurance and the associated coverages and plans will vary from company to company. However, most insurance companies that offer boat insurance provide the following policies and coverages in some form or fashion.

What types of losses does boat insurance cover?

Most boat insurance policies offer protection from many common causes of physical damage, like fires, storms, theft, and collision or accidents. Depending on the type of watercraft, policies can cover damage to your hull, motor(s), permanent fixtures, sails, and furnishings.

As previously mentioned, one of the most important coverages boat insurance offers is liability insurance. This usually includes property damage liability (damage you cause to someone else's property) and bodily injury liability (injuries you may cause to others).

Many policies can extend to cover your transportation trailer, but sometimes, this is an additional feature. Make sure to talk to your insurance agent for specifics about trailer coverage and coverage during transportation.

Lastly, it's also important to consider what body of water your boat is intended for. For example, is your boat strictly used for inland lakes, or do you plan on taking it out on the ocean? Again, talk to your insurance agent as coverages may differ for a watercraft used in the ocean.

Types of boat insurance policies

Replacement cost. This policy allows you to replace or repair your boat in the event that it sustains damage. In the event of a loss, it will reimburse you for the amount required to repair the boat to its original state, or replace it with an identical (or nearly identical) make and model. 

Actual cash value. This policy provides reimbursement based on the current value of your boat by taking depreciation into account. In other words, if you have a ten year old boat, the insurance policy would pay for what it is worth at the time of the claim rather than the value you paid for it initially. 

Agreed amount. For this policy, a reimbursement amount is agreed upon beforehand rather than tying the payout to the value or current market value of your boat.

In addition to those listed above, some coverage options may be outlined in one of the two following ways:

Comprehensive. Comprehensive boat insurance usually covers almost everything, with a few exceptions. Exceptions may include normal wear and tear or intentional damage.

Limited or named-peril. Named-peril insurance policies cover specifically listed losses. These may include fire, vandalism, tornadoes, collisions, and lightning. 

When you're out enjoying yourself on the water, the last thing you should worry about is how to cover damage or loss to your boat. Even though boat insurance isn't required in Texas, it's just as important to have as auto or homeowners insurance. 



Filing an insurance claim isn't always smooth sailing. That's why great customer service is essential! Since 1896, Germania Insurance has been the Insurance Texans Trust for great coverage and outstanding customer service. But don’t take our word for it! Hear what our customers have to say. 

For more information about our insurance products, request a free quote online, or reach out to one of our trusted agents today!

Read more: While you're learning about insurance in Texas, read our blog about auto insurance and homeowners insurance!