Despite the remarkable development in its fishery sector, the penetration rate of fishery insurance in China is considerably low. This paper examines the key factors that contribute to the poor performance of fishery insurance, in particular aquaculture insurance, in China. The doublebounded dichotomous choice contingent valuation method (DB DCCVM) is used to investigate fish farmers' willingness to pay (WTP) for insurance, based on a survey of 1,280 fish farmers in three coastal cities in China. The results indicate that fish farmers' decisions on adoption of an insurance scheme depend on various factors, among which magnitude of financial loss, fish farmers' awareness toward insurance and their education all have a positive effect on the WTP. However, household income and farming experience are found to have a negative effect. Furthermore, the mean WTP for aquaculture insurance is estimated to be CNY579 (US$90.05) 1 per household, which is equivalent to 1.5% of mean annual household income. These results provide several policy implications for the Chinese government, insurance companies as well as researchers.