It takes a very significant investment to own a boat or a yacht these days. So protecting the same from theft, fire, damage or an accident is very important. The best way to safeguard these interests is to have adequate liability coverage or in other words, procure boat insurance.

Though it is not mandatory in the U.S.A. as no state or federal laws require a boat owner to have insurance on a boat, it is better to have a boat insurance to cover all the risks such as damage, theft, corrosion, hurricane hazards, fire, accidents etc.

However, if the boat owner has a loan using the boat as collateral, the bank will require insurance coverage listing them as a loss payee to cover their interest in your boat. Also, most marinas (a dock or basin providing secure moorings for pleasure boats and often offering supply, repair, and other facilities)

Insist on boat insurance in order to keep the boat at their facility.

There are many factors that go into determining the premium for your boat - its location, use, size, age, power type along with the ownership and operating experience. Unlike auto or home insurance where most companies offer the exact same coverage, boat insurance varies between companies. While the amount you pay for insurance has to be a factor in the selection of your protection package, it is more important to consider the types of losses covered, how much you will collect in the event of a loss, what assistance is available in an emergency, and what level of service you will receive. The boat owner should select a carrier, agent, and policy that meet their specific needs.

First and foremost, choose a policy that best fits your boating needs. Some factors that can influence your premium:

Cruising area : Where you cruise and when. It costs more to insure a boat in coastal waters than inland lakes and rivers, especially in areas exposed to hurricanes.

Boating safety education: You'll receive a discount from many insurance providers if you complete a safety course that's been approved by the National Association of State Boating Law Administrators (NASBLA).

Good driving records: Premium discounts are applied for clean driving records because many insurance companies believe that if you are responsible behind the wheel of your automobile, you will also be responsible at the helm of your boat.

Liability limits: The higher the limit, the higher the cost.

The size of your deductible: The higher your deductible the lower your premium.

Keeping your boat safe: If your boat is maintained in a particularly secure location - secure from extraordinary weather patterns such as hurricanes, tornados, floods, etc. and/or secure from theft or vandalism. Catastrophic loss from weather or thieves is a significant cost factor in boat insurance.

Premium discounts are available with successful completion of any safe boating courses approved by the National Association of State Boating Law Administrators (NASBLA). These include courses by the Coast Guard Auxiliary, Power Squadron, and Red Cross etc.

• Most of the insurance companies have an ‘All Risk' policy which covers all external causes of loss except those specifically excluded. Coverage includes losses caused by hurricane, theft, flood, fire, sinking, and collision, etc.
• For Agreed Hull Value Policies (Yacht Policy and Bass Boat Program), the insurer will be paid the Agreed Hull Value in the event of a total loss. Repairs for Partial Loss are covered on a "new for old" basis, although specific items are subject to depreciation.
• For Actual Cash Value Policies (PWC and Boat Saver), all covered property losses are subject to depreciation.

There are hundreds of Insurance providers in the United States of America who provide Boat Insurance and there are several types of policies to suit each individual. When looking for boat insurance the cost is not always the most important thing. Make sure you have the full cover you require and that you are insured whether your boat is on or off the water. If you take part in water sports such as water skiing then that will require additional insurance cover.