Insurance is not only for your boat, or someonoe else's boat, but also the environmental damage you could do in a grounding- Coral damage or diesel spill in the water. Here in Hawaii boaters have been fined $100's of thounsands of dollars for damage to coral reefs while anchoring (anchoring on live coral).
The other think I found funny, back during the March Tsunami, many boats in Hawaii were damaged or totaled. They were at dock when the Tsunami hit. Many of these boats were live aboard and were sunk. One retired man lost everything and the boat was his house. A few weeks ago these boaters were crying at a meeting with the state (hawaii) asking what the state was going to do to help them! None of the boaters had insurance.
For $500 a year to insure my boat and $300K in liability I think insurance is a good deal. Even if you are in the right someone can still sue you. At least your insurance company will defend you at no cost (you hope at least).