Texas Boating Insurance: Do You Need It?

Is Boat Insurance Required in Texas?

Texas state law does not require boat owners to carry insurance to legally operate a recreational vessel on public waters. Unlike automobiles, there is no statewide liability insurance mandate for boating.

However, this does not mean boat insurance is optional in all cases. Boaters often encounter mandatory insurance requirements through private contracts or organizational rules.

When Boat Insurance Is Required in Texas

There are several situations in which insurance becomes a practical or contractual requirement:

1. Marina & Storage Facility Requirements

Many Texas marinas require proof of liability insurance as part of their slip or storage agreements. Requirements typically apply to:

• wet slip storage

• dry-stack storage

• hoist or lift storage

• covered or enclosed storage

Some facilities may require additional riders for:

• salvage/wreck removal

• fuel spill liability

Requirements vary by operator and contract.

2. Lender & Financing Requirements

When a boat is financed through a bank, credit union, or marine lender, the lender will typically require:

• Hull & Machinery coverage (physical damage)

• Lienholder listed as loss payee

This protects the lender’s interest until the note is satisfied.

3. Charter, Rental & Commercial Operations

If the vessel is used commercially, insurance requirements become stricter. Examples include:

• paid passenger charters

• sightseeing or party boat operations

• guide fishing services

• rental fleets

• instructional services

Commercial marine policies often include:

• liability limits appropriate to passenger count

• crew/passenger injury (Jones Act not applicable to inland)

• wreck removal & pollution liability

• commercial hull coverage

4. Competitive, Racing, and Club Events

Yacht clubs, sailing associations, or racing organizations may require coverage to participate in:

• organized races

• regattas

• training events

• cruising rallies

Coverage requirements are defined by the event or club, not the state.

What Boat Insurance Covers (Coverage Types)

Boat insurance is highly modular. Common policy components include:

Liability Coverage

Covers injury or property damage suffered by others if you are found responsible in an accident.

Hull & Machinery (Physical Damage)

Covers damage to the insured vessel from:

• collision

• weather

• theft

• fire

• vandalism

Medical Payments

Covers medical expenses for passengers regardless of fault.

Uninsured/Underinsured Boater

Protects against other operators who carry no insurance — a realistic risk in Texas where no liability mandate exists.

Salvage & Wreck Removal

Pays for recovery and removal of a damaged or sunken vessel.
Note: often not included automatically and must be added.

Pollution Liability

Covers fuel spill clean-up costs. May be required by marinas for environmental compliance.

Trailer Coverage

Can extend to the boat trailer when stored or while being towed.

Coverage varies by insurer and policy type.

Texas-Specific Considerations

Inland vs Coastal Use

Policies are priced and underwritten based on navigation area. Texas includes:

• inland lakes (Travis, Texoma, LBJ, etc.)

• coastal bays (Galveston Bay, Matagorda Bay, Corpus Christi Bay)

• Gulf Coast offshore zones

Coastal and offshore navigation often require:

• higher liability limits

• named storm coverage options

• separate wind/hail deductibles

Storm & Weather Risk

Texas boaters face:

• hail events

• windstorms

• hurricanes (coastal)

• tornado activity (inland)

Many policies may include:

• named storm deductibles

• haul-out reimbursement for storm preparation

Uninsured Boaters in Texas

Because Texas does not mandate liability insurance, collision scenarios frequently involve uninsured operators, increasing the importance of:

• uninsured boater coverage

• medical payments coverage

Are Personal Boat Trailers Covered?

Trailers are generally not covered under auto liability once unhooked, and may require:

• marine policy endorsements, or

• separate trailer insurance

Auto liability may only apply while connected to a vehicle during road towing.

Do Homeowners Policies Cover Boats?

Most homeowners policies limit boat coverage to:

• low-value boats

• low horsepower limits

• limited theft coverage

• no liability on the water

Boats exceeding typical HP/length/value thresholds require a marine policy.

Recreational vs Commercial Coverage 

Recreational boating insurance is not suitable for:

• hire-for-passenger service

• guided fishing trips

• sailing instruction

• party boats

• corporate events

Commercial marine policies are underwritten for:

• passenger injury exposure

• contractual risk

• environmental exposure

• crew liability (when applicable)

Cost Factors 

Boat insurance premiums vary based on:

• vessel value, type, and length

• horsepower and speed capability

• navigation limits

• mooring/storage location

• boater experience

• safety training certifications

• prior claims

Insurance carriers may offer discounts for completing recognized safety courses.

Do You Need Boat Insurance in Texas? Bottom Line

While Texas does not impose a legal insurance requirement for recreational boaters, insurance becomes functionally required when:

✔ mooring at marinas
✔ financing a vessel
✔ participating in organized boating activities
✔ operating commercially

and is commonly purchased to mitigate financial exposure from:

• collisions

• storm damage

• theft

• injury claims

• fuel spills

• salvage costs

FAQ

Is boat insurance required by Texas law?
No, not for recreational boating.

Do marinas require insurance?
Many do. Requirements vary by facility.

Does auto insurance cover a boat on a trailer?
Liability may extend while towing; physical damage usually does not.

Does homeowners insurance cover a boat?
Only limited coverage; most vessels require a dedicated policy.

Where to Buy Boat Insurance

Boat insurance can be purchased through:

• marine specialty insurers

• home/auto carriers that offer marine endorsements

• commercial marine brokers (for charter/guide operations)

Recademics does not endorse any specific insurer or broker.