The Added Benefits of a Captain’s License for Your Boat Insurance

Pop quiz: If you’re transporting someone’s boat for them, is it the Coast Guard or your boat insurance that requires a captain’s license?

Even experienced boaters may hesitate when answering this question — there are a lot of similarities between Coast Guard requirements and boat insurance requirements regarding captain’s licenses, so it’s easy to mix up the two. 

Knowing your requirements is crucial to ensuring compliance for all mariners. Plus, the more you know about how a captain’s license affects your insurance, the more potential discounts you can claim.

(And if you’re still wondering about our transport question, the answer is probably both!) 

Coast Guard Requirements vs. Insurance Requirements

Coast Guard requirements for captain’s licenses focus on the qualifications and certifications necessary to operate vessels commercially. For example, a captain’s license is required for taking paying passengers out fishing in regulated waters.

On the other hand, boat insurance requirements are more about the coverage and liability involved with owning a vessel. So if your boat is damaged or causes damage, you’re protected financially.

Coast Guard and insurance requirements sometimes align, and sometimes one is stricter than the other. On one boat transportation job, for instance, the insurance company required me to have a Master captain’s license for coverage even though the Coast Guard only required a Six-Pack license.

If You Have a Captain’s License, Do You Still Need Boat Insurance?

The Coast Guard requirements and boat insurance requirements serve two very different purposes, and having one doesn’t remove the need for the other.

So, having a captain’s license may make boating safer, but you still need boat insurance. And having boat insurance doesn’t mean you can skip out on a captain’s license if you’re running a maritime business.

In fact, having a captain’s license may make boat insurance all the more important. If you’re operating commercially, insurance provides much-needed financial protection in the case of injuries or accidents.

Regardless of whether or not you have a captain’s license or operate commercially, boat insurance is essential to protecting yourself, your passengers, and your investment.

Types of Boat Insurance and Which Is Right for You

Choosing which type of coverage is right for you depends on factors like the value of the boat, your personal preference and budget, and local legal requirements. If you’re not sure which type of boat insurance to get, it’s best to discuss the following options with your insurance agent.

Agreed Hull Value

This type of coverage is based on the value of the boat agreed upon by you and the insurance company at the time of purchase. If you experience a total loss — maybe it sinks, or maybe a storm tears a big hole in it — then your insurance company typically reimburses you for the agreed-upon value.

Actual Cash Value

Actual cash value coverage takes depreciation into account. In this case, your reimbursement for a total loss is based on the current market value of your boat. So, if you bought your boat a year ago for $100,000, you might get back $80,000 from an actual cash value policy.

Liability-Only Coverage

Liability-only policies focus solely on protecting you if you cause damage or injury to others while operating your boat. This type of coverage will help you out during a lawsuit, but it won’t cover damage to your boat itself.

How to Lower Your Boat Insurance Costs

There are several ways to potentially reduce your boat insurance premiums — and a few of them may surprise you! In addition to traditional methods like maintaining a clean claims history and choosing a higher deductible, these tips can help you reduce costs while maintaining comprehensive coverage.

Get a Captain’s License

The exact impact of a captain’s license on your insurance cost varies depending on your insurance provider, type of boat, and specific circumstances. Still, Mariners Learning System students typically see their boat insurance rates drop by 10–20% when they get their captain’s license. My own rates went down by 30% the year I got my license! 

Insurance companies tend to offer discounts for captain’s licenses for two reasons. First, holding a captain’s license guarantees that you have a certain amount of experience in operating vessels. This higher level of competence reduces the risk of accidents or mishaps, which insurance companies often reward with lower premiums. Second, the training and experience required for obtaining a captain’s license contribute to a better safety record, which insurance providers take into account when determining rates.

Some people worry that earning a captain’s license will increase their insurance fees, but we can unequivocally say that it does not. However, starting a new commercial venture after earning your captain’s license means you’ll need additional insurance coverage for your business, which of course raises your rates. This is where the confusion comes in.

Move Your Boat to Safer Waters

For coastal boaters, moving your boat to a safer location during hurricane season can lower your premiums. Insurance companies do pay attention to the location of your vessel, and they charge more for increased risk.

To get a lower premium, many Florida mariners have their boats moved to safer harbors during risky months. In fact, some companies won’t insure a boat at all if it stays down in Florida all season! 

Employ Extra Security Measures

Adding security measures to your boat reduces the risk of theft, vandalism, and other potential issues. Because of this, insurance companies often lower rates for boat owners who equip their boats with alarms, GPS tracking systems, and engine immobilizers. Even installing something as simple as a doorbell camera on your boat could make an impact.

Enroll in Usage Monitoring

If you’re not chartering every weekend, why pay rates like you are? Some insurance companies offer usage-based programs that adjust your rates based on how often you actually use your boat. Enrolling in these programs requires you to provide data on when, where, and how frequently you use your boat, but taking that extra step can lead to much lower costs.

Learn Everything You Can

Completing boating safety courses or obtaining additional certifications besides a captain’s license may qualify you for extra discounts on your premiums. Taking such courses demonstrates your commitment to safe boating practices and provides you with valuable safety knowledge, something insurance companies value.

Bundle Your Policies

Insurance companies often offer discounts for holding multiple policies, so consolidating your coverage with one provider could reduce costs across all your insurance policies. Ask your provider about the benefits of bundling your boat insurance with other policies, such as your car insurance or home insurance.

Following State Boat Insurance Requirements

Where you live will impact your boat insurance requirements, as each state has its own rules and regulations. Some states have simple guidelines in place or don’t require insurance at all, while others — specifically Arkansas, Hawaii, and Utah — have stricter mandates. The best way to ensure you’re properly covered and compliant is to speak with a local insurance agent about your state’s regulations.

If you determine that a captain’s license will help lower your costs or achieve your boating goals, don’t hesitate to reach out to Mariners to find the right course!