It is my opinion that overpowering a boat is perfectly fine. That is, when done sensibly, and carefully.
Belief: Recreational Boats must be Coast Guard Approved (or certified).
Not True: The Coast Guard does not certify or approve recreational boats. The terms US Coast Guard Certified and US Coast Guard Approved have specific meanings defined by law. Recreational boats are certified, but it is the builder or manufacturer who must certify that their boats meet the requirements of the Federal Regulations. See https://newboatbuilders.com/pages/certified.html for more information.
The manufacturers do NOT write laws. Therefore for a recreational boat, YOU CAN exceed the rated HP. At least as far as the coast guard is concerned. Again, the manufacturer may not be OK with it, but the coast guard is....Because they are not coast guard certified.
Belief: It is illegal to exceed the horsepower rating on my boat:
Maybe; Why maybe? This is a gray area. The Federal regulation requires boat manufacturers to post a label with the recommended maximum safe horsepower for outboard powered boats. It only applies to mono-hull boats under 20 feet in length. Horsepower is determined using a formula contained in the regulation. Under Federal law a boat owner can put any size engine they want on their boat. However, the catch is, some states have passed laws making it a violation to exceed the values on the capacity label. Insurance companies also may cancel your insurance if they discover the boat has an engine that exceeds the horsepower rating. If you have an accident and an investigation shows it was related to overpowering then the owner could be held liable in a law suit by the injured parties.
If your local laws are OK with it, and your insurance company it is perfectly legal.
I am going to double check progressive. They DID want to know how fast the boat would go, and if it was used for racing. But NOT HP rating. I'll call and double check if they do care about the HP rating, and the installed HP.
As for local laws. Here in Michigan, there is NO law against overpowering. There is a speed limit on the water though. It is 55mph. It is apparently widely ignored as almost all larger glass bass boats are able to exceed that. I've never talked with anyone receiving a ticket for it.
All Great Lakes waters do not have the 55mph speed limit.
Blanket statements about it being illegal to overpower a boat are FALSE