What boat insurance covers

Physical damage to the vessel

Often called hull cover. It responds to damage to the boat itself, and depending on the policy to the motor, the trailer and the permanently attached equipment.

How it is valued matters more than the limit: agreed value pays the figure written on the policy, while actual cash value pays that less depreciation. On an older boat the difference is substantial and it is decided when the policy is written rather than when the claim is made.

Check what is included rather than assuming. Motors, trailers and electronics are sometimes covered as part of the vessel and sometimes listed separately.

Liability on the water

This responds if you are held responsible for injuring someone or damaging their property — another vessel, a dock, a moored boat, a person in the water.

It generally covers the defence as well as the claim. It is the section a marina or a lender is usually asking about, and the section most worth setting deliberately rather than accepting a default.

Passengers are the exposure owners tend to underestimate. A boat carries guests in a way a car rarely does, and an injury to a guest is a liability claim like any other.

Wreck removal

If a vessel sinks or grounds, the owner can be required to remove it, and that cost is unrelated to what the boat was worth. Removing a sunk boat from a channel can cost more than the boat did.

This is why it is insured separately rather than out of the hull limit, and why a policy that settles the hull generously can still leave an owner badly exposed if this section is thin.

It is one of the two covers on a boat policy with no personal-lines equivalent, and it is worth asking about by name.

Fuel spill liability

The other one. A discharge of fuel or oil can make the owner responsible for the clean-up and for the consequences of it, again regardless of the vessel's value.

It arises from ordinary incidents rather than exotic ones — a sinking at a mooring, a grounding, a fuel system failure — and the response is generally a matter for environmental authorities rather than a negotiation.

Standard policies commonly include a limit for it. Whether that limit is adequate is a question worth asking rather than assuming.

The rest of the policy

Several smaller sections do a disproportionate amount of the day-to-day work.

• Uninsured or underinsured boater — injury caused by an operator with no cover or not enough of it, on the same logic as the auto equivalent
• Medical payments — modest medical costs for people injured aboard, without needing to establish fault
• Personal effects — belongings carried aboard, usually to a limited amount and frequently with category caps
• Towing and on-water assistance, which is the section most often actually used
• Fishing and diving equipment, sometimes covered and sometimes an addition
• Trailer cover, where the trailer is not already part of the vessel cover

What it generally does not cover

• Wear, gradual deterioration, corrosion and osmosis — the marine version of the maintenance exclusion
• Mechanical or electrical breakdown that is not caused by a covered peril
• Damage from marine life, and infestation
• Racing, unless the policy specifically allows it
• Chartering or any commercial use, which needs commercial cover
• Damage occurring outside the policy's navigational limits, or during a lay-up period