Watercraft & Boat Insurance

Everything you need to know about Personal Watercraft (PWC) Insurance

June 10, 2021

You may hear the term ‘watercraft insurance” thrown around when you’re talking about boats, yacht, Jet Skis, WaveRunners, and other water-based recreational vehicles. However, there are a few different types of watercraft insurance and they cover specific circumstances. Most of the time, coverages differ based on the size of the vehicle and, thus, the amount of damage and liability they can cause.

So where does Personal Watercraft Insurance come into play?

Personal watercraft insurance encompasses smaller powered watercraft like Jet Skis, Sea-Doos, and Wave Runners that can operate at high speeds. These are differentiated from low-speed craft like canoes, rowboats, and small sailboats that can't go above 25mph. Why? Because theoretically, higher speeds leave you at higher risk of causing damage to yourself, others, or other peoples’ property.

Personal watercraft insurance is not required by law in most states (as opposed to something like auto insurance) but is highly recommended. We don’t say this just because we’re an insurance agency! Without insurance, you’re leaving yourself incredibly vulnerable to financial loss. It’s not just about having to pay to repair your Jet Ski if it’s damaged. If you don’t have watercraft insurance, you’re also vulnerable to a lawsuit if you injure someone with your watercraft or damage someone else’s property.

(That said, even if your state doesn't require PWC insurance, if you’re storing your watercraft in a private marina or dock they may require you to have insurance.)

Having insurance isn't just about paying for damage to your watercraft. PWC Insurance will also cover liabilities like if you also damage someone else's boat, or if you injure someone on a crowded day at the lake.

What does personal watercraft insurance cover?

A typical personal watercraft insurance policy includes both property and liability coverage. What’s the difference between the two? Property coverage will include damage to the craft itself, including if the vehicle is stolen. Liability coverage comes into play when you injure someone else, or have an accident with another watercraft or dock.

Here are a few examples of when a Personal Watercraft Insurance policy will come into play:

Example 1:

You and a passenger are riding your Jet Ski and collide with another watercraft. Your passenger is seriously injured and decides to sue for negligence or medical expenses. Even if you are not deemed at-fault for the accident, you may still be held responsible for the expenses (especially if the other operator isn’t insured). Your Personal Watercraft Insurance policy would kick in to help cover court costs, legal fees, and a settlement.

Example 2:

You lose control while unloading your Wave Runner off the trailer. It hits another car and causes damage to both the car and your Wave Runner. Your insurance would cover both the damage to the car and the Wave Runner.

Example 3:

You’re finished for the day and park your Sea-Doo while you make a quick run to the restroom. While you’re gone, someone sees the opportunity to steal it. Personal watercraft insurance will cover the costs to replace your Sea-Doo. Depending on your insurance policy, it may also replace the trailer.

Example 4:

You are storing your watercraft in the garage for the winter, but a nasty storm causes the roof to collapse and causes damage. Depending on your homeowner’s insurance policy, the watercraft may be covered up to a limit. Personal watercraft insurance would pick up where the homeowner’s insurance ends.

You can also purchase additional coverage for accessories, like winterization covers and the trailer you use to tow it. If any of these items were damaged, the insurance would cover them as well. Some carriers will build these accessories into their standard PWC policies, but we recommend asking your agent to be sure.

What ISN'T covered by Personal Watercraft Insurance?

There are of course limitations to what watercraft insurance will pay for! Here are some things that aren't covered by PWC Insurance:

  1. Transportation of the watercraft. If you're towing it to a dock and get into a car accident, your auto insurance would kick in to handle the claim.
  2. Renting the watercraft or charging for rides. If you are found to be making income off of your watercraft, then your insurance will probably not cover you if there's any kind of property or liability claim. That's because you're operating at a higher risk. What you really need is a commercial policy. Commercial policies are more expensive for a reason!
  3. Using the watercraft outside of a designated geographic area. Some policies will state that they only cover you if you're operating in certain types of waters, such as lakes, rivers, and inland waterways like a bay or sound. If you're riding on the open ocean, there may be limitations on how far out you can go from the shore when the policy will no longer be valid.

What types of watercraft are included in the Personal Watercraft Insurance category?

Watercraft insurance covers a wide array of watercraft types, from Jet Skis to yachts. The coverages depend on the size of the watercraft. PWCs fall into the "Class A" category, which is the smallest segment of watercraft insurance. These include the common Jet Skis, Sea-Doos, WaveRunner, as well as other brands.

Basically, anything less than 16 feet in length and that can go more than 25 MPH will fall into Class A and will likely need PWC insurance.

It can get confusing because some small craft, like canoes, rowboats, kayaks, and small sailboats that can’t exceed 25 MPH may be covered under your homeowner’s or renter’s insurance policies. That’s because these types of craft are most likely to be stored in your garage or outbuilding and the risk they present is usually minimal. These types of craft are typically not considered to be in the "personal watercraft" category. But don't be mistaken - your Jet Ski is probably not covered by your homeowners insurance.

How much does Personal Watercraft Insurance cost?

As usual, it's hard to say an exact number you can expect to pay because it depends on a lot of different factors. We can give you averages here, but your final price might be different.

With that said, an average annual premium for personal watercraft insurance ranges between $150 to $500/year. The premium will depend on a few different factors, like the brand or model of your watercraft, how fast it can go, and its value (including any modifications you may have made to it that could increase its value). You can sometimes reduce your rate by taking a safety course, but this will vary by carrier.

Am I still covered if I let someone else operate my Jet Ski?

The answer to this is completely dependent on the terms set by your watercraft insurance carrier. We recommend never letting anyone operate your personal watercraft unless you are either willing to take on the risk of a denied insurance claim, or you are 100% sure your carrier will cover you.

Does watercraft insurance also include my trailer for towing it?

This is something you'll want to ask your agent about, and it's also a great example of why it's never a bad idea to have a personal agent instead of blindly purchasing insurance from a website.

Often, your personal watercraft insurance will cover physical damage to your trailer if you're involved in an accident on the road. However, if there are any liability claims, that's where your auto insurance might take over (for example, if the trailer caused any injuries).

Some personal watercraft insurance policies have limitations on where you'll be covered. For example, some carriers won't cover you if you're more than a mile from the shore in the ocean. Make sure you understand your policy before assuming you're covered everywhere.

What else should I know about PWC Insurance?

Ask if your coverage protects you from uninsured motorists. It may be something you need to add. PWC insurance is not required by most states, and it's safe to assume that most other folks out on the water aren't insured. Many times, even if you're determined not at fault for an accident, you'll be on the line for repairs or replacement of your watercraft if the other person doesn't have insurance. Your PWC insurance will kick in if that's the case.

Got more questions?

We are here to answer them! We can help you protect your assets so you can go out on the water with something invaluable - peace of mind. Get in touch with us here.

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