No single number fits every boat, and whether the law sets a minimum varies by state. Utah, for example, requires liability insurance on motorboats and personal watercraft operated on its waters, with exemptions for engines under 50 horsepower and airboats. Maryland requires nothing. The demands you are more likely to run into come from a marina slip agreement or a boat loan. Past those, the right limit depends on what you own, who runs the boat, who rides along, and whether you carry an umbrella, because the umbrella expects the boat policy underneath it to carry the limit it names.
Does the law require it?
It varies by state. Maryland’s insurance regulator says plainly that no Maryland law, regulation or rule requires you to buy insurance for a boat or personal watercraft. Utah goes the other way: each motorboat and personal watercraft operated on Utah waters has to carry owner’s or operator’s liability insurance of at least $25,000/$50,000 for bodily injury or death and $15,000 for property damage, or $65,000 combined per accident. Motorboats with engines under 50 horsepower and all airboats are exempt, and proof of insurance has to be on board whenever the boat is running. Utah’s boating agency says that beginning January 1, 2026, uninsured motorboats receive a notice from April to October to provide proof of insurance, and failing to comply with the notices results in revocation of the registration.
A state minimum like Utah’s is a floor written for the state’s purposes, not a measure of what a serious accident can cost you. If you keep your boat in California, here is whether boat insurance is required in California.
Where the real requirements come from
- Marinas. Slip agreements commonly spell out insurance. The Louisiana Office of State Parks’ 2022 slip agreement for its Poverty Point Reservoir marina, for example, requires a certificate or policy of liability and full marine coverage with limits of at least $100,000, with the boat owner as named insured and the liability coverage reaching injury and property damage anywhere in the marina. If proper certificates aren’t furnished, the state gives written notice, and the owner has 10 days to fix it before the state may terminate the agreement. Read the minimum, the named-insured or additional-insured wording, and the cure period in yours.
- Lenders. If you financed the boat, Maryland’s regulator notes the lender may require insurance, and if your policy lapses the lender can force-place coverage that protects only its interest while you pay for it.
- Paying passengers or business use. Maryland’s regulator lists damage from business pursuits among the typical exclusions to the physical-damage coverage in boat owner’s policies. If you plan to charter the boat or carry people for pay, raise it before you bind and ask how the liability coverage treats that use.
If you keep a boat at Marina del Rey, Newport Beach or San Diego, those pages cover local slip and mooring points.
What boat liability is designed to pay for
The liability part of a boat owner’s policy is designed to pay for bodily injury and property damage to others that you become legally responsible for while operating the boat. A boat owner’s policy may also offer wreck removal, emergency services and towing, and Maryland’s regulator suggests checking for each one when you compare policies.
Two federal rules show why those details matter:
- Wreck removal. Under 33 U.S.C. 409, if your boat sinks in a navigable channel you have to mark it and start removing it right away. Failing to do so is treated as abandonment, and the United States can remove it.
- Fuel spills. Under the Oil Pollution Act, anyone owning or operating a vessel that discharges oil into navigable waters is a responsible party, liable for removal costs and for damages such as injury to natural resources and to other people’s property. EPA’s Discharge of Oil regulation under the Clean Water Act requires the person in charge of a vessel to report a discharge that leaves a sheen on the water to the National Response Center as soon as they know of it.
How to size the limit
Start with what a lawsuit could reach: your home equity, savings and income. Then think about how the boat is used. A boat that tows people, carries guests who aren’t family, or is run by teenagers or friends carries more liability exposure than one that idles to a fishing spot with one person aboard.
If you want more than the boat policy offers, an umbrella is the usual next layer, but it sits on top of the boat policy rather than replacing it. On the published personal umbrella form I read, watercraft liability is excluded except to the extent the underlying insurance covers it. If the underlying policy has lapsed or carries less than the required limit, that form pays only as though the underlying coverage were in force at the required amount, and the gap is yours. The same form excludes pollution liability, cleanup costs included, with no exception for underlying insurance, so on that form any fuel-spill protection has to come from the boat policy. Match your boat limit to the umbrella’s schedule of underlying insurance. More on sizing an umbrella.
Personal watercraft and towing skiers
Jet skis and other personal watercraft get their own treatment. Utah names them in its insurance requirement. Maryland’s regulator says a homeowners policy may provide some coverage for smaller boats, such as sailboats under 26 feet or power boats with outboard engines under 25 horsepower, and even then the coverage may be very limited. Larger boats need a watercraft endorsement or a separate boat policy.
Personal watercraft coverage can also carry a passenger hazard exclusion: when the schedule shows it excluded, there is no liability coverage for injury to anyone riding on, or being towed by, that craft. If you pull skiers, wakeboarders or tubes, ask an underwriter directly whether towed riders are covered.
Common questions
Is boat insurance required by law?
It varies by state. Maryland’s insurance regulator says no Maryland law requires it, while Utah requires liability insurance on motorboats and personal watercraft operated on its waters, with exemptions for engines under 50 horsepower and airboats.
What are Utah’s minimum limits for boats?
On Utah waters, motorboats with engines of 50 horsepower or more and personal watercraft need at least $25,000/$50,000 for bodily injury or death and $15,000 for property damage, or $65,000 combined per accident. Proof has to be carried on board while the boat is operating.
Does my homeowners policy cover liability for my boat?
Sometimes, for small boats. Maryland’s regulator says a homeowners policy may provide some coverage for smaller boats, such as sailboats under 26 feet or power boats with outboard engines under 25 horsepower, possibly on a very limited basis. Larger boats need an endorsement or a separate boat policy.
Will my umbrella cover my boat?
Only on the umbrella’s terms. The umbrella form I read excludes watercraft liability except to the extent underlying insurance covers it, so the boat needs to sit on the umbrella’s schedule of underlying insurance at the limit it requires.
Who pays if my boat spills fuel?
Under the Oil Pollution Act, the owner or operator of a vessel that discharges oil into navigable waters is a responsible party, liable for removal costs and certain damages. Whether your boat policy responds depends on its wording, so ask before you need it.
Sources
- Utah Division of Outdoor Recreation: boating registration and insurance
- Maryland Insurance Administration: A Consumer Guide to Insurance for Boats and Personal Watercraft (PDF)
- Louisiana Office of State Parks: Poverty Point Reservoir State Park Marina Slip Rental Agreement (2022 term, PDF)
- 33 U.S.C. 2701 (Cornell LII): Oil Pollution Act definitions, responsible party
- 33 U.S.C. 2702 (Cornell LII): Oil Pollution Act elements of liability
- 33 U.S.C. 409 (Cornell LII): marking and removal of sunken vessels
- EPA: When are you required to report an oil spill and hazardous substance release?
- 40 CFR part 110 (Cornell LII): Discharge of Oil (Clean Water Act), sections 110.1, 110.3 and 110.6
- USAA Limited personal umbrella policy specimen, form PU2009L (02-14) (PDF)
- FC&S (National Underwriter, via PropertyCasualty360), June 25, 2018: Watercraft endorsements
General information about boat liability insurance and related state and federal rules as of October 2026, not legal or tax advice; your state’s boating law, your slip and loan agreements, and your policy wording control. Coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.