Does Boat Insurance Cover a Sunken Boat?

July 28, 2025

Unfortunately, your boat sank. You’ll want to know if boat insurance covers a sunken boat. Wreck removal insurance coverage typically helps cover the costs of removing the wreckage.

It’s important to check the details of your boat insurance policy to find out how you would be covered if your boat sank.

How does boat insurance cover a boat that sinks?

Boat insurance policies can pay for the cost of removing the sunken boat from the water, which can be costly. This may be included automatically or require an add-on to your boat insurance, depending on your boat insurer and your boat policy.

The payout for a total loss, such as a sunken boat, will depend on whether your policy is based on agreed value (you receive the amount listed in the policy) or actual cash value (depreciated value at the time of loss).

Wreck removal

Here are some exclusions that would apply to insurance coverage for a boat that has sunk:

A lack of reasonable care in the maintenance of your boat
Intentional misuse
Illegal acts
Wear and tear; gradual deterioration
Faulty design or latent defect except when a reasonably thorough inspection could not have discovered such a faulty design or latent defect
Freezing damage unless you have taken reasonable precautions to protect your boat and its machinery.

Note that reasonable precautions include having your boat winterized by a marine service professional in accordance with industry standards.

What about salvage charges?

When your boat sinks unexpectedly, salvage and recovery costs covered by boat insurance typically include:

Payment for retrieving your boat from the water, whether it is repairable or not. This can involve hiring professional salvage teams, using specialized equipment, and covering labor and material costs.
Wreckage removal: If your boat is a total loss and must be removed to prevent environmental hazards or navigation risks, this coverage pays for the safe removal and disposal of the wreckage.
Towing fees: Costs to tow your sunken boat to a repair facility or safe location if salvage alone is not sufficient.
Environmental cleanup: Expenses related to preventing or mitigating environmental damage, such as fuel spill cleanup or removing hazardous materials from the water.
Associated costs: This may include diver fees, transport, and disposal costs, and any measures required to comply with legal or regulatory mandates for removal.

Exclusions may apply if the sinking resulted from negligence, lack of maintenance, manufacturer defects, reckless operation, or if the incident occurred outside the policy’s navigational limits. Not all policies automatically include salvage and wreckage removal. Always review your policy details to ensure you have insurance protection for a sunken boat.

My boat sank and there was an oil leak

Some policies include coverage for fuel spill cleanup if your boat sinks and leaks fuel. Fuel spill liability coverage helps cover the expenses of cleaning up and limiting the damage caused by a fuel spill from your boat.

How do I make a boat insurance claim?

The claims process starts when you report an insurable loss to your insurance provider.

You will be asked to confirm your policy details and provide up-to-date contact information.

You'll be asked to provide a detailed description, in your own words, about what happened about the sinking of your boat or fuel leakage, for example.

You will likely be contacted by an adjuster, who might also assign an additional expert to assist, such as an appraiser or contractor, depending on the type of claim.

What if I don’t have boat insurance?

Are you comfortable with the potential financial fallout of not having boat insurance? Without boat insurance, you’ll need to be prepared for any financial consequences that you could face such as a sunken boat or a boat accident.

Final thoughts

Boat insurance can help pay for sunken boat, but it’s important to know how much of the costs your policy would cover. You’ll need to know if there are any exclusions in your boat insurance policy and how your boat insurance covers wreck removal.

5 FAQs

Do boat insurance policies automatically include salvage and wreckage removal?

Not all boat insurance policies automatically include salvage and wreckage removal. Some boat insurance policies require you to buy this coverage specifically. You’ll need to review your boat policy details to make sure you have enough insurance protection for these potentially high expenses.

Is it expensive to retrieve a sunken boat?

Yes, retrieving a sunken boat is usually expensive. For small to mid-sized boats (under 30 feet/10 metres), professional salvage companies can charge $3,500 to $7,000 for recovery, depending on the boat's length and where it sank. If fuel or oil need to be cleaned up, you may pay $3,000 or more for environmental cleanup. Towing the recovered boat to a storage facility may cost $300 an hour.