Water Sports - 11 min read

Do You Need Boat Insurance When Renting a Boat? (How to Get a Policy!)

Stacy Randall

Stacy Randall, Updated November 2, 2022

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Owning a boat can add lots of opportunities for adventure, relaxation, and recreation to your life. But it also is undoubtedly an expensive hobby between upkeep and maintenance, supplies, storage, and insurance. Many people opt to rent a boat instead to reduce the hassle, but do you need boat insurance when renting a boat?

You have the option to purchase short-term rental liability insurance when you rent a boat. This insurance can protect you if you damage the boat or other property or injure others. You also will have to put down a deposit to cover damages or the insurance deductible. Special insurance is also wise when renting your boat to others.

Before you set sail, make sure you’re prepared for all the unexpected things that can happen out on the water. It’s always a good idea to be informed so you can make decisions that are in your best interests.

What Kind of Insurance Do You Need When You Rent a Boat?

When renting a boat, it’s wise to get renter’s insurance to cover liability risks. You don’t need full coverage since you don’t own the boat. The boat’s owner should have boat insurance that covers damage. However, it’s their responsibility to make sure their coverage allows others to operate the vessel.

Typically, you’ll have the option to get rental insurance but not be required to get it. In some cases, insurance might be provided. Although, the insurance requirements might vary based on where you rent the boat and the owner’s current insurance coverage. 

Most rental companies will have you sign a contract. It includes outlining what damages you would be responsible for if something happens while you have the boat.

For example, if you crash into a dock, you’ll be responsible for the repercussions. Boat renter’s liability insurance can cover you in these unfortunate cases so you aren’t left footing the whole bill.

If the person renting you the boat tells you they have insurance, still ask to see a copy of their policy. You want to make sure their policy covers renters. Don’t be shy and ask for verification in writing.

What Does Boat Rental Insurance Cover When I Rent A Boat?

Rental insurance typically protects you if you damage the watercraft or injure passengers or other people and property on the water. However, not all policies cover the same things.

Therefore, it’s a good idea to make sure you’re protecting yourself from unexpected situations. If the company provides renter’s insurance, ask to see a copy of the policy. 

You want to know exactly what it covers. Short-term renter’s insurance can consist of limited liability risks, so you want to be well informed.

For example, some policies might not cover storm-related damage, accidents that occur at night, or if you disregard any restrictions in the contract. Restrictions could include the number of passengers, where you go, how fast the boat goes, and more.

Who Pays The Deductible?

Many rental agencies have renters put down a deposit that would cover the insurance deductible in case of damage to the boat. Therefore, the owner’s insurance policy would kick in, but you would lose your deposit to cover the deductible.

These types of expectations should be stated in the waiver and contract the rental agency has you sign. 

Does Your Current Insurance Policy Cover Watercrafts?

Some homeowner’s insurance policies can extend limited coverage to watercraft. However, this usually applies to a boat or item you own and is usually minimal. Additionally, it is usually only for damage to the vessel and does not apply to liability claims.

Therefore, if the boat causes damage or injures someone, these wouldn’t be covered under the terms of your homeowner’s policy. It also would not apply to a boat you’re renting.

Does Your Credit Card Cover Boat Rental Insurance?

Your credit card company might provide rental insurance that extends to watercraft if you use the card to pay for the rental. This practice is similar to the perks many card companies offer regarding rental cars. If this applies to you, you wouldn’t need to pay extra for insurance at the rental agency.

This coverage usually covers what renters would typically be responsible for, like damage to the watercraft or injury to others. But it is your responsibility to understand the terms of what your card covers. If it isn’t adequate, you may decide to go with the rental company’s policy option.

Is Boat Rental Insurance Expensive?

Boat rental insurance is relatively inexpensive, with many policies costing just $300 to $500 a year. But you would pay significantly less than this for a short-term policy during your rental.

You’ll usually have a reservation deposit and a security deposit. If the rental company requires you to put down a deposit instead, it could be between $500 to over $1,000. If anything happens, they’ll use your deposits to cover damages or their insurance deductible.

How Far Can I Go on a Rented Boat?

How far you can go on a rented boat depends on the terms of your rental contract. Every company will have different restrictions and parameters regarding distance. The rental agreement should clearly explain these terms, and the boat’s owner should review them with you.

But it’s ultimately on your shoulders to understand the terms of the rental contract. Going against the rules can void any insurance you purchase with the rental. If you end up taking the boat beyond the allowed distance, you could lose your liability protection.

Therefore, specifically, ask where your boundaries are and make sure you read your contract.

Does All Boat Insurance Have the Same Coverage?

Although the specifics of boat insurance coverage can vary based on the insurance company, all cover primarily the same things. Most policies cover things like damage to your boat or personal watercraft (PWC) and offer new boat replacement.

The damage would include problems with the hull, equipment, sails, etc., caused by collisions, storms, fire, or theft. Most policies also offer liability coverage up to a certain amount. 

Liability pays for injuries or damage that occurs from an accident you cause. It could involve another boat out on the water or crashing into property, like a dock or a docked vessel.

Another typical component of most boat insurance policies is medical coverage for you and anyone in the boat with you. Many policies also cover wreckage removal and fuel spill liability. 

So far, these features are very similar to most auto insurance policies. You can even opt for towing assistance should you break down in the water or on the road.

If you were towing your boat with your car and your car broke down, your auto policy might cover the towing of your vehicle. However, your boat would be left high and dry unless you had boat insurance with towing assistance. 

Is GEICO Dropping Boat Insurance?

GEICO marine stopped offering boat and yacht insurance through independent brokers and agents on May 24, 2021. However, GEICO still offers boat insurance directly. The major insurance company offers several different policies, depending on your boat type and your specific needs.

You can also choose from several options: ice or freeze coverage, covering fishing equipment,  and disappearing deductibles. The insurer also offers a discount to those who pass a boat safety course.

GEICO Marine Insurance Company has a partnership with TowBoatUS to provide 24/7 towing assistance. They also offer fuel delivery services and personal watercraft insurance.

What Kind of Insurance Do You Need If You Rent Your Boat to Others?

Although not every state requires boat insurance for renting, you should consider a policy that covers renting your boat to others. This last bit is essential, as only some boat insurance policies cover you if you rent your boat to someone else.

Look for policies that cover damage, sinking, injury to people onboard and to others, and fire damage protection. You can seek out insurance through peer-to-peer rental sites or go to a provider directly.

Also, verify your liability coverage. Many insurers will provide coverage up to $300,000 should you damage someone else’s property or injure someone.

Your policy will also likely have stipulations regarding who you can rent your boat to. For example, they may need to be over a certain age and required to have taken a boat education course. Therefore, when renting your boat, make sure to ask the person for their ID and boater education verification.

If you don’t abide by the stipulations in your policy and something happens, you won’t be covered. To offset the insurance cost, many people who rent out their boats pass the cost on to the renter. (As we previously mentioned, this would be in the deposit you put down to rent the boat.)

Tips for Reducing Your Risk as a Boat Owner

Always maintain your boat and perform regular safety checks, have the renter do a test drive, and be clear on the rules. You can significantly reduce your risk by practicing a few extra steps when renting your boat to others.

Be very clear with anyone renting your vessel on where they plan to go. Make sure they understand the boundaries. Also, verify and make copies of their identification and their boater education card.

You can also put together a safety manual that includes emergency contact info and what to do in basic situations. Have a first-aid kit on board the boat that you update regularly.

Also, perform regular safety checks on your boat and keep up with routine maintenance. You could also require renters to take a quick test drive with you so you can verify they know how to operate the boat.

Do Peer-to-Peer Boat Rentals Include Insurance?

Peer-to-Peer Boat Rental sites, like Boatsetter, charge an additional fee to cover marine rental insurance and require a safety deposit. If you damage the boat, your deposit pays the costs, and the insurance should cover you if there’s an accident. But most peer-to-peer sites do include insurance, depending on the platform.

Different boat rental operations offer different coverage, though. Some of the most common are those that cover fire damage, boat damage, and death. However, the burden is on you to know exactly what coverage you have.

Tips for Reducing Your Risk as a Boat Renter

Know the boat you’re renting, perform an inspection, sail with responsible people, and take a simple boating course to reduce your risk. If you are unfamiliar with or brand new to boating, hiring a captain is the easiest thing to do. Many peer-to-peer sites offer this option for an extra fee.

Always ask to see a copy of the insurance policy so you know exactly what is covered. For example, some policies might only cover four people onboard the vessel, but you have five. Likewise, be crystal clear on how far you can go on the boat and any other restrictions in place.

Rent from someone reputable; read reviews, ask questions, and get trusted recommendations. Know the people who are coming aboard the boat and make sure they all understand the rules. It’s also a good idea to take a boat education course and safety courses if you plan to rent boats.

Summary

Renting a boat is a great way to enjoy this form of recreation without all the expense and hassle of owning a boat. But you still want to make sure you’re protected in case anything happens. Unpredictable things like the water, weather, and others out on the ocean or lake create a perfect storm for unexpected situations.

When you rent a boat, the person renting it to you might have boat insurance that covers renters. In this case, you’ll likely pay a deposit covering damage or deductible costs if there’s an accident. However, make sure to get a copy of the policy, so you know exactly how you’re protected.

Otherwise, you can get a short-term rental policy that covers damage and liability insurance. Peer-to-peer sites often include insurance in the rental. However, it’s always ultimately up to you to ensure you are protected and know the restrictions.

For example, how many passengers can be on board or how far you can go are typical restrictions. Another might be if you must be back by a specific time because the policy won’t cover renters out at night.

So before you rent a boat, make sure you get the down low on insurance. Even though it might not be required, it’s always a good option to protect yourself.

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