A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 19, 2021

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Here's what you need to know...

  • Auto insurance protects you when you’re operating a covered auto and while you’re towing other vehicles
  • If you’re towing a boat, your Personal Auto Policy has provisions that extends some coverage from your personal auto policy
  • While the boat is hooked to your auto and in tow, your personal liability coverage from your car insurance will
  • Even though the boat has liability coverage while in transit, your Personal Auto Policy doesn’t provide physical damage coverage even when towing a vessel that you own
  • If you want coverage to pay for damage to your boat while it’s stored, in transit or on the water, you’ll need a Boat Insurance Policy
  • It’s important that you consider raising your third-party liability coverage when you’re towing your boat to better protect your finances and your assets

When you’re in the market for a boat, you need to think of more than just size and propulsion. While the boat length and the motor type are two important details to consider when you’re finding the boat of your dreams, it’s also important to focus on how you’ll protect that vessel when you take ownership. Boats aren’t just expensive to maintain, they also cost money to protect. From your initial trip home with your boat in tow, to the moment you take the boat for its first launch, there’s risk at every turn. Learning how to minimize the potential for loss will make you an intelligent boat owner. Compare car insurance rates now by using our FREE tool below!

If you’re like most boat owners, you tow your personal vessel with your own personal vehicle. When you’re towing a recreational vehicle or vessel that you own, your auto insurance does surprisingly offer you some coverage. Unfortunately, coverage at its broadest form isn’t provided under the policy. This is your guide to car insurance and how it protects you as a boat owner.

If you’re towing a boat, is coverage afforded under your auto policy?

The insuring agreement that you receive when you sign up for a Personal Auto Policy (PAP) includes very detailed information about what is and what isn’t covered. Under this agreement, you will find that there are provisions that extend coverage to more than just the listed or ‘covered’ autos on your declarations page.

Under the standard agreement, auto insurance provides coverage when you’re pulling a trailer that you own that’s designed to be towed by private passenger autos, pickups or vans.

This includes a trailer that’s designed to carry a boat that you own. Even though policy provisions and definitions extend coverage to trailers, policies with more than just basic liability coverage have restrictions you should be aware of.

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What type of coverage is provided under your PAP?

All standard auto insurance policies will provide third-party liability coverage while you’re towing a boat trailer that’s registered in your name. Check the fine print of your policy to check for unusual restrictions. Here’s a breakdown of how the coverage extends when your boat is hitched to your car and in transit:

  • Bodily Injury Liability: Bodily Injury Liability, which is often called BI, is a form of third-party liability coverage that pays for someone else’s medical bills and their lost wages. BI also kicks in to pay if there’s a lawsuit for medical bills or pain and suffering and the case is settled in the claimant’s favor.
  • Property Damage Liability: Property Damage Liability, which is called PD, is also a form of third-party coverage. This coverage pays to repair or replace real property that you damage while you’re driving your auto or towing a boat. PD doesn’t pay to repair or replace your vehicle, your boat, your trailer or anything that you or your family members own.
  • Uninsured Motorist Protection: Uninsured Motorist (UM) is a coverage that pays for your medical bills when someone hits you and they don’t have coverage. UM also pays when the at-fault driver has low limits and you need more coverage to pay off your medical bills. This first-party coverage will activate even when you’re in a loss while you have your boat in tow.

Why does auto insurance provide liability coverage while towing your boat?

Boat insurance isn’t mandatory as far as the state is concerned. One of the main reasons the state hasn’t made boat insurance mandatory is because there’s liability coverage provided by the auto towing the boat while it’s in transit.

Even though it seems as if extending coverage would put the auto insurer at a greater risk, when you really analyze losses you can understand why the carrier pays for boat in tow claims.

If you’re towing a boat, you’re still operating the covered auto. When a loss happens, it’s still the actions behind the wheel of the auto that could lead to a pileup or to the trailer jackknifing. Since it’s user error, the carrier needs to protect their policyholder’s assets by affording the same liability coverage that would be afforded even if a trailer wasn’t being towed.

What type of coverage isn’t provided by your auto policy?

If you have a newer boat or your financing the vessel, you need to look into buying a separate boat policy for damage coverage. Auto policies provide liability coverage but any physical damage coverage carried under the PAP won’t extend to a trailer or a boat. This is why there’s property insurance specially designed to protect your vessel while it’s in transit, in storage or in the water.

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Is there coverage when the boat is in the water?

You have liability coverage while your boat is in transit, but auto insurance doesn’t protect you when you’re liable for injuries caused by navigating your boat in the water. You’ll need boat insurance with separate personal liability limits for liability protection as you enjoy the lake or the sea. It might even be wise to purchase a Personal Umbrella Policy so that you have blanket liability protection.

What is covered by a boat insurance policy?

You will need different types of coverage depending on what kind of boat you have. Larger boats will come with different insurance needs than ski boats, for instance. However, we can go over the standard coverages you might find on a boat policy.

  • Property coverage – This protects your boat itself, generally while it’s on land or in the water. If it’s damaged in a collision or some other mishap, or even if it’s stolen, you’ll be covered with property coverage.
  • Liability insurance – Just like the liability insurance on your auto policy, this coverage pays for other parties’ damages from an accident you caused.
  • Medical payments coverage – Pays for medical expenses for you and your passengers if you are injured in a boat accident.
  • Uninsured boater coverage – Pays for damages if you’re in an accident with someone who doesn’t have boat insurance.
  • Personal property coverage – This would pay to replace personal items you keep on your boat. If you have expensive fishing equipment or something similar, it’s a good idea to invest in this coverage.

You can add additional coverage options like boat towing coverage (similar to roadside assistance service on your auto insurance) and mechanical breakdown coverage as well.

Make sure to shop around for quotes from different insurance companies before choosing a policy. A good rule of thumb is to get at least three quotes.

Does your homeowners insurance cover your boat?

If you tow your boat home and it’s sitting on your property in storage, your home policy may provide some damage coverage. It’s important that you know the limitations. Under the standard home policy, you may have up to $1500 in coverage to pay for a boat that is damaged or totaled while it’s on the premises.

The homeowners policy doesn’t pay beyond the limit defined in the policy or while the boat is away from the home.

Buying a boat can expose you to a whole new set of risks. It’s important that you’re prepared to deal with these risks and to mitigate them. If you’re sold on owning a boat, it’s time to price the cost of boat insurance. You should also price the cost to raise your auto liability limits for added protection in transit. Use an online rate comparison tool to see how much higher limits will cost and you may even decide that it’s best to go with a new carrier with better insurance rates. Enter your zip code in our FREE tool below to get instant car insurance rates from multiple insurance companies.