Is Boat Insurance Mandatory in Colorado? | Badger Insurance Advisors

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Is Boat Insurance Mandatory in Colorado?

Jul 13, 2022

BY: KEVIN VOLZ | INSURANCE AGENCY PRINCIPAL

PERSONAL INSURANCE

Short answer: No.

You are not legally required to have boat insurance to operate a boat in Colorado. However, if you finance your boat, your lender will require you to purchase insurance.

Just because boat insurance isn't required in Colorado doesn't mean you shouldn't have it. We recommend all boat owners carry at least basic liability coverage. Even the safest boaters can make mistakes that result in serious accidents and costly damages.

If you cause an accident while operating your boat, liability coverage will help pay for the other party's medical bills, repair costs, and legal fees (up to your policy limits). Without insurance, you could be on the hook for these expenses out of your own pocket.

The Basics of Boat Insurance

Boat insurance is similar to auto insurance in many ways. Both cover your liability for damage you may cause to others, and both protect your investment in the event of an accident or theft.

Like auto insurance, you cannot purchase boat insurance if your vessel is not registered. To register your boat in Colorado, you'll need to submit the proper paperwork to the Colorado Parks and Wildlife office.

Types of Coverage

There are several types of boat insurance coverage:

Liability Coverage: This type of coverage protects you financially if you're found at fault for an accident that causes injuries or property damage. It will help pay for the other party's medical bills, repair costs, and legal fees (up to your policy limits).

Collision Coverage: This type of coverage will help pay to repair or replace your boat if it's damaged in an accident with another vessel or object.

Comprehensive Coverage: This type of coverage protects your boat from damage caused by non-collision events, such as fire, theft, and vandalism.

Uninsured/Underinsured Motorist Coverage: This type of coverage protects you if you're in an accident with a driver who doesn't have insurance or doesn't have enough insurance to cover the cost of the accident.

Medical Payments Coverage: This type of coverage helps pay for your medical bills and your passengers' medical bills if you're injured in a boating accident, regardless of who is at fault.

Why You Should Consider Boat Insurance

Even though boat insurance isn't required in Colorado, there are several good reasons to purchase a policy:

It will protect you financially if you cause an accident.
It will protect your investment in the event of an accident or theft.
It will give you peace of mind knowing you're covered in the event of an accident or other mishap.

Imagine this scenario: You're out on the lake enjoying a beautiful day of boating. Suddenly, you hit a wave, and your boat capsizes. Luckily, everyone on board is okay – but the boat is a total loss. If you don't have insurance, you'll be responsible for the entire cost of replacing your boat.

Now imagine you have comprehensive collision coverage with a $500 deductible. Your insurance company will pay to replace your boat up to its actual cash value, minus your deductible. So if your boat is worth $10,000, you'll receive a check for $9,500 for a new vessel.

As you can see, boat insurance can be well worth the cost in the event of an accident or other mishap.

The How Much Does Boat Insurance Cost in Colorado?

The cost of boat insurance in Colorado is an average of $256 per year. This cost will vary depending on factors such as:

The type of vessel you have: The type of vessel you have will affect your premium. For example, a small fishing boat will cost less to insure than a large yacht.

The value of your vessel: The value of your vessel will also affect your premium. A more expensive vessel will cost more to insure than a less expensive one.

Your coverage limits: The higher your coverage limits, the more you'll pay in premiums.

Your deductible: Your premium will be lower if you choose a higher deductible.

Your driving record: A clean driving record will help reduce costs.

Your claims history: If you have a history of filing claims, you can expect to pay more for your coverage.

To get an accurate quote for boat insurance in Colorado, be sure to compare rates from multiple insurers.

How Much Insurance Do I Need In Colorado?

The amount of insurance you need for your boat in Colorado will depend on the value of your vessel and the coverage options you choose. Since a boat is an expensive investment, you'll want to ensure you have enough coverage to protect it.

For big boats, we recommend an insurance policy with a limit of at least $1,000,000. This will give you enough coverage to protect your investment and cover the cost of damages and injuries. For smaller boats, a policy with a limit of $500,000 should be sufficient.

The coverage limit is the maximum amount your insurer will pay for damages. It's important to select a high limit to protect your boat, but not so high that you're paying for coverage you don't need.

How Many Passengers Does Boat Insurance Cover?

Your boat insurance policy covers family members who live in your household. You should always check with your insurer to see how many non-family members are covered under your policy. Some policies have limitations on the number of non-family members who are covered, and some exclude coverage for passengers altogether.

While comprehensive coverage covers damages to your boat that are not the result of an accident, it does not cover injuries to passengers. You'll need to purchase medical payments coverage or personal injury protection (PIP).

Boat insurance is an important investment for any boat owner. It can protect you from financial ruin in the event of an accident. The cost of boat insurance is a small price to pay for the peace of mind it provides. Call your insurance agent today to get a quote for boat insurance in Colorado. You might get a discount if you insure multiple boats or use the same insurer you use for your other insurance needs.

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