Boats need to be insured for a number of reasons;
To cover you, the boat owner, against third-party claims where by accident or negligence you may have caused another person (or another vessel) loss or damage. This aspect of Marine Insurance functions in much the same way as the third-party car insurance, with which we are all familiar.
Third-Party Marine insurance is essential in this day and age and most Harbours and Marinas will not allow you to stay unless they have seen your insurance certificate.
Because of the potential for third-party claims when sailing in crowded modern sailing areas like The Solent, for example, the third-party component of your boat insurance forms the major part of your premium. Generally it is possible to get third party cover temporarily when you purchase your boat, but in order to get fully comprehensive cover you will need a full condition survey on the boat.