What Kind Of Insurance Coverage Do I Need?

A quick guide to PWC insurance basics

Buying insurance for your PWC can be daunting at first, since there are so many new terms to understand. Understanding the basics is the first step in determining what kind of coverage you need.

Loss or Damage

Where coverage of a personal watercraft is concerned, the three terms you will most-often hear are “agreed value,” “actual cash value” and “replacement cost.”

As implied, an agreed value policy insures the PWC to a value that is agreed upon between the owner and the insurer. In the event of a total loss, the policy will pay the full insured amount. If your unit has appreciated in value, you still get what you agreed to and not a penny more.

Actual cash value coverage means the insurance company will pay the actual cash value of the watercraft on the day it was lost. In other words, the value of the unit, less depreciation.

Replacement cost coverage means that the insurance company will pay the cost to replace your machine regardless of whether its value has gone up or down.

Replacement cost coverage is generally considered to be the best type of coverage, since there is no haggling about the unit’s value. It’s also the best type of coverage if the PWC needs to be repaired, rather than replaced. If you damage your five-year-old machine, for example, an actual cash value policy will only cover the cost of five-year-old replacement parts. New parts would be considered an upgrade, since they’re not depreciated. However, since aged parts are almost impossible to find, the shop will most likely install new ones, leaving you to pay the difference out of pocket.

Personal Injury

Marine policies often extend to cover any passengers as well. Your policy may include a provision to cover your medical bills, lost wages, and pain and suffering if you’re hit by another boater who doesn’t have their own insurance, for example.


Personal injury liability coverage protects you from being sued or having to pay out of pocket if you hurt someone else during an accident. The coverage typically includes medical bills, lost income, pain and suffering, and legal expenses.

Property damage liability offers similar protection against the cost of any damage you cause to other boats, docks or property. Another kind of coverage to look for is guest passenger liability, which means you’re covered when someone else is using your PWC.

Additional Coverage

Apart from insuring the machine itself, most PWC policies will also provide coverage for a number of other things we might not think about at first. Most policies will cover the cost of an emergency tow, for example, or provide coverage for personal effects like cell phones or cameras that are damaged or lost in an accident. Some policies will even offer a loss-of-use option, which allows you to rent another machine while yours is being repaired.