Articles and Guides.

Do You Really Need Boat Insurance?

For when the unexpected happens on the water, every boatie should consider an appropriate level of boat insurance to help protect themselves and their watercraft.

Boat insurance

Owning a boat is not always smooth sailing. One day, when you’re out on the water without a care in the world, the conditions get rough and suddenly you’re wondering why you haven’t taken out boat insurance. 

As you face the impending storm, some big questions might cross your mind. Does your home insurance cover your boat? What does boat insurance cover you for? How much loss or damage might be covered? When you make it home safely, consider getting a quote on boat insurance.1  

A nation of boaties 

In Australia, we love getting out on the water. The Boating Industry Association puts the number of Australians with a boat licence at more than 2.9 million, and there are around 905,000 registered vessels plying our waters.2 That’s not counting the many non-motorised watercraft.   

Not surprisingly, Queensland leads the way in both boat licences (1,267,000) and boat ownership (276,000 registered boats), with New South Wales sailing behind at 549,000 boat licences and 243,000 registered boats.2  

Mervyn Hartley, Youi’s Head of Product – Specialist Lines, says everyone who owns a watercraft, no matter what size or value it is, might want to seriously consider their insurance needs. 

Why is it so important to have boat insurance?  

Life on the water isn’t without risk. Whether you own a jet ski for zooming around on the river, a tinny for taking the kids fishing, or a pleasure boat for getting away from it all, looking after yourself, your passengers and your boat will no doubt be a priority.  

While boat insurance isn’t a legal requirement in any state of Australia, Hartley says most state governments strongly recommend it – and with good reason.  

“Owning a watercraft isn’t just an important part of your lifestyle, it’s usually a major financial investment,” he says.  

A useful summary of the boat registration requirements across the states can be found on our watercraft insurance page.1 Alternatively, check the following links for your state or territory:

Does my home insurance cover my boat?

While some home insurance policies may offer minimal coverage for small non-motorised boats, it’s generally uncommon for household insurance to also cover your watercraft.  

Even if you do have some coverage, it might only for be damage while the boat is stored at your home. The type of damage will usually be limited, and you may generally not be insured on the water, so you might want to consider taking out a separate policy for your boat if you’re looking for a higher level of coverage.

How much boat insurance do I need?

Only you can really decide how much insurance cover you need. Some of the factors you might want to consider when deciding which policy could be best for you are how you use your boat, the value of it, and your budget. Understanding the different types of boat insurance and their inclusions is the best place to start when determining the levels of cover that might suit your needs.  
If you want a bit of added reassurance both on and off the water, consider following this quick guide for determining what kind of Youi boat insurance might be right for you. 

Our Comprehensive Boat Insurance includes cover for accidental damage, most severe weather events, fire and theft, plus damage your boat or tender causes to someone else’s property.3 
Our Third Party Fire & Theft Boat Insurance includes cover for fire, theft and damage your boat or tender causes to someone else’s property.4 It also covers towing costs to get your boat or tender to a safe place and emergency accommodation if you need it, after an insured event.5  

Our Third Party Property Only Boat Insurance includes cover for damage caused to someone else's property by your boat or tender.6

After you've decided on the boat insurance product that most suits your needs, you may also want to consider any optional covers that could be useful. For example, with a Youi Comprehensive policy, you may want to upgrade your level of cover for contents, or insure your boat for sailboat racing.7 

What factors might affect my boat insurance rates?  

Some of the same factors outlined above can influence your insurance premium, including the value and age of your boat, what kind of boat it is, and where and how you use it.  
Other factors that might be considered include your boating history and claims history – is this your first boat or have you claimed against your insurance before? The level of cover that you choose and any additional options you add will also affect the premium. 
“The most important thing for Youi is that you find a policy and premium that is right for you,” says Hartley. “It’s all about you selecting a product offering that suits your needs.”  

Do I need boat insurance even when it's not on the water? 

If you only use your boat a few months out of the year, you may wonder whether or not it’s worth insuring in the ‘off-season’. Even though it’s not in the water, you might still want to consider protection for when it’s in storage, whether that’s at home or somewhere else. Not all policies will cover your boat for damage, vandalism, theft or other events when it’s off the water, so always check the relevant product disclosure statement and talk to Youi about your options.  

How much should I insure my boat for? 

Insurers may allow you to nominate an insured value for your hull and tender, and depending on the watercraft type, there may be additional sums insured for your outboard motor(s), sails, masts, booms and rigging, and trailer. Remember, your boat is a lot like a car in that it starts depreciating over time.  

What kind of costs might a boat owner incur if there is major loss or damage? 

When the worst happens, it can be very expensive if your boat is not insured.  
“A very bad day on the water could mean you may be liable to pay a substantial amount for damages to a third party,” says Hartley.  
“For example, you might think that it’s not worth insuring your $10,000 tinny, but if you crash into a much more expensive boat and cause $60,000 worth of damage to it, you’ll be glad you were insured.”  
Youi boat insurance can also offer cover for costs you mightn’t immediately think of, such as salvage in the case of a major accident.5 “Sometimes the cost of necessary salvage might be greater than you expect,” says Hartley.  

“Then there are things like cleaning up oil or fuel spills, cancelled mooring fees, and even counselling services.”1

Youi boat insurance offers you that bit of extra confidence, and the right policy can help look after you, your passengers and your boat, and get you back enjoying the water as soon as possible.

Start a quote with us today so you can relax when you’re out on the water and know you’ve got the cover to help if things go wrong.



1 Limits apply. See our Watercraft PDS for full details
2 Source: Boating Industry Association, July 2023 – Industry Data (subject to change)
3 Available with Comprehensive policies. Limits apply. For more details, see the PDS
4 Available with Comprehensive and Third Party Fire & Theft policies. Limits apply. For more details, see the PDS
5 If your watercraft is unsafe to use after an insured event and you’re more than 100km from home, we’ll reimburse you up to $1,000 for combined emergency transport, accommodation, storage and/or repairs. Available with Comprehensive and Third Party Fire & Theft policies. For more details, see the PDS 
6 Available with Comprehensive, Third Party Fire & Theft, and Third Party Property Only policies. For more details, see the PDS
7 An additional cost applies and is available with Comprehensive policies. Limits apply. For more details, see the PDS