Boat Insurance: Getting the Right Policy
The sun is out. The skies are clear. Summertime is here. Many boaters are heading out on the St. Lawrence River for some summer fun. From sailboats to speed boats, we have all the boat insurance options you need.
Did you know there is a special type of coverage that boaters need? It’s called Watercraft Insurance and it’s something all boat enthusiasts should know about. Watercraft Insurance is available if your boat is financed, docked at a local marina, or stored in your private boathouse.
What are the options?
Most insurance companies offer two options for boat insurance: You can add your watercraft to your home insurance policy or you can purchase a separate, stand alone policy for your watercraft. Although simply adding your boat to your home insurance policy can be convenient and inexpensive, it may not properly cover your boat and could result in a nasty surprise should you need to submit a claim.
Adding your watercraft to your home insurance means that:
- Depreciation will be deducted in the event of a total loss (Actual Cash Value)
- Restrictions on other coverage such as emergency towing or loss of use
- Claims on your boat will be considered the same as a claim on your home insurance policy. If you have too many claims, your home insurance policy may be cancelled.
Although small watercraft like canoes, kayaks, or paddle boats can possibly be included in your home or seasonal home insurance, larger boats with big motors and personal watercraft vehicles like (Jet Skis or Sea-Doos) should be covered with their own separate policy. A standalone boat insurance policy may cost a little bit more, but the coverage is vastly superior and a claim will not affect your home insurance policy.
What Insurers Will Need to Know
Many factors will affect the price of your watercraft insurance policy. These include things like its size, the location that you use it, its motor size and top speed, etc. Premiums increase as the value of the boat, trailer, equipment and accessories increase.
Before providing an insurance quote for your watercraft, insurance companies will likely ask for the following information.
- The boat’s length, make, model, motor, max speed, value and age
- How frequently the boat is used and what it’s used for
- Where the boat is stored
- The boat’s condition and market value
- The waters you typically navigate and if you ever charter your boat
- The loss and claims history of the owners and/or operators
- The driving record of the owners and/or operators
If your boat is over a certain age, insurance companies may ask for a marine survey by a qualified marine surveyor. This is an appraisal of your boat’s worth. It will include pictures, descriptions and recommendations for repairs or upgrades. It is possible that no insurance will be given until the surveyor’s recommendations are implemented.
Outbuildings, such as a boat house, garage or shed may require additional coverage. Be aware of all coverages and exclusions to make sure you’re covered.
Choosing Your Boat Insurance Coverage
Watercraft insurance is available for:
- Water skis
- Jet boat
- Ski boats
- Personal watercraft
Recreational boat owners can choose from coverage for:
- Hull and machinery
- Protection and indemnity
- Medical payments
Depending on your choice of policy, Watercraft Insurance Can Cover:
- Damage to the boat or loss of attached equipment
- Damage caused by your boat / watercraft on someone else’s property
- Liability coverage for injury to passengers onboard; or tubers or skiers being towed behind
- Theft of boat or onboard equipment
- Other unforeseen events
Watercraft insurance is not technically a mandatory type of insurance in Ontario. Some marinas will ask for proof of insurance before allowing you to store your watercraft on their property. A finance company may require proof of insurance prior to loaning money for the purchase of a new watercraft.
Agreed Upon Value vs Actual Cash Value
Before getting a policy on your watercraft, confirm with your insurance broker whether any potential claims on the boat will be settled on Agreed Upon Value or Actual Cash Value. This depends on the insurance provider and the age of your boat.
The amount you will receive in the event of a total loss of your watercraft can vary greatly depending on whether you are paid an Agreed Value or an Actual Cash Value. An Agreed Value policy will pay you the amount stated on the declaration page, while an Actual Cash Value policy will pay you the replacement cost of the boat less depreciation.
Looking for a discount? Some insurance companies will give a 10% discount to members of the Canadian Power and Sail Squadron.
Check the Details of Your Boat Insurance Policy
Before choosing a policy, there are several policy details to check out to make sure that you’re getting the right coverage. It’s important to understand all of your policy coverages and exclusions before you need to make a claim!
Ask your broker whether younger operators of the boat will be covered by your policy. There are legal age restrictions for operating a boat in Canada.
In our area of the country, snow load can be a big problem for boats in the off-season. Where you intend to store your boat will affect your watercraft insurance policy. Speak with your broker for more details.
There are restrictions on many policies on how far from your home dock you can venture and still be covered by your policy. Keep this in mind when planning any long-haul trips. This area usually includes all of Canada and the USA, not south of 40 degrees north. Your broker can explain the navigational limit in your policy.
Additionally, you may only be covered for land travel within a specific radius. Keep this in mind while hauling your boat a long distance on a trailer.
Also, many boat insurance policies contain layout periods. Please specify a period of time when your boat must be out of the water rocket example December 1st to April 1st, bracket. Your boat would not be covered by your policy if it was used during this time. Again, speak to your broker for more details.
In order to legally operate a motorboat in Canada, you need a Pleasure Craft Operators Card (PCOC). If you are found driving a boat without one you may be fine and may void any insurance policy in place.
If you’re planning to head out for summer fun on the water this summer, call us first to get your insurance in order. Reach out at 613-932-0083 or 1-844-807-1506 or send us an e-mail at email@example.com. We’re here to help!