Is Boat Insurance a Legal Requirement?

At Allegiance Insurance Agency of Richardson, TX, we know Texans love boating and spending time on the lakes in our state. You need to remain protected while boating. That means sunscreen for your face and body, sunglasses to protect your eyes, and insurance to protect your boat.

While the state does not require boat insurance for your watercraft, your bank might. If you obtained a loan to purchase the boat, your financial lending institution can require you to obtain insurance to cover damage to other people’s boats or other property and to cover your liability for bodily injury. If you own a home, thereby have a homeowner’s policy, it covers a limited amount of damages to your boat. You can obtain a boat policy to enhance this coverage though and you really should.

A boat insurance policy varies in its value coverage. You have three types of policy from which to choose:

  • replacement cost which pays to repair your watercraft or replace it.
  • actual cash value which pays a depreciated replacement cost or for repairs.
  • agreed amount value which pays for replacement cost or repairs to the watercraft up to the value specified in the policy.

The actual cash value or agreed amount value costs a little less, but they cover less, too. Replacement cost value costs more in premiums, but it pays the full, original cost of the boat which is what a new boat would probably cost you.

Your insurance policy comes with a few restrictions. If your policy includes a layup provision, that means your coverage gets suspended during certain months. You need to re-activate coverage if you luck into nice weather during winter and decide to take the boat out.

Your policy does not automatically cover ocean voyages. If you plan to boat off of the Texas coast, discuss this with your insurance agent, so you can add coverage. While the state of Texas does not have many limitations to who can propel the boat, insurance policies do. Many policies restrict the age of the boat operator. Carefully read your policy and adhere to any age limits.

Richardson, TX and the surrounding area offer a multitude of boating options. Let Allegiance Insurance Agency help you protect your investment in your watercraft. Call us today to build the right boat policy for you.