Do You Need Liability Insurance on Your Boat?

We all know that liability insurance is necessary for cars, trucks, and other street-legal vehicles, but what about water-faring vehicles? One could argue that the open sea (or your local lake) is just as dangerous as the highway, but many people don't buy liability insurance for their boats because it isn't required by law.

This is often a mistake.

A Serious Error in Judgment

My father-in-law purchased a sailboat several years ago, eager to realize a childhood dream of sailing the open water of Lake Conroe. A few weeks after he bought it, he took it out after dark one night, and he accidently crashed with another boat who didn't see him.

Since he hadn't yet gotten around to pricing liability insurance for the boat, he was responsible for the entire cost of fixing both vessels. Not only did this result in a serious tongue-lashing from my mother-in-law, but it taught a very valuable lesson about insuring one's assets.

Why Liability Insurance for Boats is Important

As you are probably aware, liability insurance protects a boat owner from damage he or she causes to someone else or his property. If you crash into a boat dock, for example, or take out another boat on the water, liability insurance will pay for that damage-up to your limits, at least.

Many people avoid buying liability insurance for their boats because, after all, it doesn't pay for damage to their own property. What they don't realize, though, is that you don't get to choose whether or not to repair the damage you cause to someone else. If you don't pay for it, you'll probably find yourself on the wrong end of a civil lawsuit.

Not as Unlikely as You Think

It's easy to hear about a boating accident and say snidely to yourself, "I would never be that stupid." And maybe you wouldn't. But not all boating accidents are avoidable-or even the fault of the offending party.

What if you experience some type of mechanical failure while boating that causes you to hit someone else? You didn't do anything wrong while you were out sailing with the family, but your negligence in keeping the boat in good repair results in your culpability. This is why it is a good idea to buy liability insurance for boats.

This also makes a good case for other types of boat insurance. If you damage your own vessel (even through no fault of your own), you will have to cover those expenses out of pocket. Insurance is designed to protect you from financial hardship as a result of an accident.

Talk to your insurance agent about the costs, features and benefits of liability insurance for boats, and while you're at it, get a quote for comprehensive and collision coverage. This way you can use your boat without worrying about potential hazards.