In shallow water, downwelling light is refracted from surface waves onto the substrate creating bands of light that fluctuate in both time and space, known as caustics. This dynamic illumination can be a visual hindrance for animals in shallow underwater environments. Animals in such habitats may have evolved to use polarization vision for discriminating objects while ignoring the variations in illumination caused by caustics. To explore this possibility, crabs (Carcinus maenas) and cuttlefish (Sepia officinalis), both of which have polarization vision, were presented with moving stimuli overlaid with caustics. Dynamic caustics inhibited the detection of an intensity-based stimulus but not when these stimuli were polarized. This study is the first to demonstrate that polarization vision reduces the negative impacts that dynamic illumination can have on visual perception.