How expensive is boat insurance?

Whether you're thinking about purchasing a boat for the first time or making changes to your current coverage, you may have questions about boat insurance costs, how they're calculated, and if there are ways to save money on costs. For all this information and more, stick around.

How much does boat insurance cost in Canada?

The average boat insurance cost in Canada ranges from $500 to $ 1,000, and higher. Insurance companies use numerous factors when calculating boat insurance policies and their relative costs, given that all boats and owners are different. Therefore, your risk profile as a boat owner will determine how much you pay for your insurance costs in the end.

How are boat insurance premiums calculated?

As we said, your boat insurance policies and premiums will vary based on several factors. While these factors may vary between providers, many insurers use the following information to determine your risk profile as a customer:

Make and model of boat

The make, model, age, and other physical characteristics of your boat will play a substantial role in what you can expect to pay as a boater, given that the value of your boat will help insurance providers determine how much coverage you need and whether additional coverage is required to ensure you are sufficiently protected.

Coverage limits

The coverage limits you choose also influence your boat insurance costs. For example, similar to auto insurance or homeowners insurance, the higher your coverage limits, the more you'll end up paying for your coverage.

Ultimately, the higher your limits, the more protection you have in the event of a claim being filed, which costs more money.

Claims history

Your claims history is also important. The more claims you have on your file, the greater the risk you pose to insurance providers. Maintaining a clean boating record can help you get cheap boat insurance.

Agreed value vs. actual cash value policy

If your vessel is stolen or severely damaged, you will get a predetermined sum from your provider under an agreed-value policy. When you first buy insurance coverage, you and your provider will decide on the agreed-upon value of your boat. This strategy may result in a higher insurance premium, but since the agreed value does not account for actual cash value depreciation, you will be compensated more if you need to make a claim.

In contrast, to calculate actual cash value policies, your insurance company will take the replacement value of your vessel minus depreciation to determine what you'll be compensated. This often leads to smaller insurance payouts but does come with lower premiums.

Boating habits

Where you plan on taking your boat, the types of boating activities you plan on doing, and how often you use your vessel are other factors that insurance companies tend to look at. The more you use the boat, the higher the risk you are of filing a claim.

Where you plan to store your boat

Lastly, where you plan on storing your boat during the off-season can also impact insurance rates. Ensuring that your boat is secured and safe from property damage or theft is essential.

What's included in standard boat insurance coverage?

Within a standard boat insurance policy, you can expect to find the following coverages:

Third-party liability coverage

Third-party liability insurance provides coverage to owners in the event they get into a boating accident that causes bodily injuries or property damage to a third party. If the policyholder were to be sued for damages, this insurance would cover medical expenses, legal costs, repairs, replacements, and other costs associated with the settlement.

Collision coverage (hull insurance)

If your boat needs repairs or replacements due to a boating accident while you're out on the water, being transported, or parked, collision coverage will kick into place and cover the costs. This policy covers personal belongings, including life jackets, fishing gear, your boat trailer and other items stored on your boat.

Comprehensive coverage

In the event that your boat sustains physical damage during a non-collision incident, comprehensive coverage will protect you. Theft, vandalism, fires, certain weather, falling items, and other incidents specified in your policy are all covered by this coverage. Again, this also includes your personal property stored on your boat and emergency towing.

Temporary replacement insurance

If your boat is damaged or stolen, temporary replacement insurance provides policyholders with a rental boat, which they can use until their vessel is returned to them.

Navigation extension insurance

Navigational extension insurance allows boaters to travel outside of standard navigational limits.

Note that beyond standard boat insurance, boaters can also purchase coverage for wreck removal, accidental pollution, and other perils specifically excluded from their policies.

Do I need boat insurance coverage?

Unlike auto policies, boat insurance is not legally required in Canada. That said, boat insurance is important for many reasons. Not only does it protect your interests as a boat owner, but it also protects you financially, should your boat be damaged or stolen, or in the event you are sued by a third party.

Ultimately, if you want to keep your boat safe and secure while you're on the water, travelling to a new destination, or storing it for the wintertime, investing in a customized boat insurance policy is needed for that peace of mind.

Tips to save money on your boat insurance premiums

Although you don't need boat insurance legally, having insurance coverage ensures that you can enjoy your time out on the water with peace of mind. And, if costs are something you're worried about, there are ways you can save on your boat insurance costs. Take a look at some of these best-kept tips and tricks below:

Shop around with different boat insurance companies

Before signing an insurance contract with a provider, don't hesitate to shop around and compare coverage options from different companies. By doing so, you can see what each policy covers, look at limits, and see which company offers the best boat insurance for your unique needs.

Bundle your home insurance and boat insurance

Already have auto insurance and homeowners insurance? If so, you can bundle your policies with the same insurance company to get a discount on your premiums. Not only does bundling your policies offer a discount, but it can also help you manage your policies and contracts more easily throughout the year.

Compare boat insurance quotes

As boat insurance isn't mandatory, owners have some purchasing power when it comes to choosing the best boat insurance policy. Therefore, to find the most affordable options available, don't forget to shop around and look at different insurance quotes from multiple providers before choosing one that's within your price range. You can do this on your own or partner with an insurance broker for assistance.

Ask about discounts

Beyond discounts for bundling your policies, insurers offer discounts for other reasons. Whether it be for having no claims on your insurance history, installing security features on your boat, taking a course to learn about boat safety requirements or others, there are numerous ways to save. So, don't be afraid to ask your insurance agent or broker whether you qualify for other saving opportunities!

Increase your deductible

A deductible is a predetermined amount of money you agree to pay in the event you need to file a claim under your boat insurance before your provider will cover any remaining costs. By increasing your deductible, you're taking on more of a financial burden and saving your insurance company money. As a result, most providers will lower your insurance costs.

Pay for your boat insurance policy upfront

If you're able to afford to do so, consider paying for your boat insurance upfront. Insurance providers add administration fees to monthly policies, given that it costs them money to process your payment each month. Therefore, to avoid these fees, pay your premium in one go.

Maintain a clean driving record

Maintaining a clean driving record is also essential if you want to lower your insurance expenses. In fact, insurance companies will look at your driving record when determining costs. So, ensure that you follow the rules of the road, avoid speeding tickets and other violations, and remain accident-free to benefit from lower rates.

Take a boat safety course

Lastly, if you want to lower your insurance rates, consider taking a boat safety course. As we said, insurance companies offer discounts to those who take safety courses. In the meantime, brush up on our first-time boat owners checklist for more safety tips and requirements you'll need to know when you're out on the water.

Types of boats that can be insured

Whether you own a large boat or a small boat, most major boat insurance companies in Canada are open to insuring all types of vessels, including:

• Personal watercraft
• Jet skis
• Yachts
• Older boats
• Sailboats
• Speedboats
• Pontoons
• Commercial fishing boats
• High-performance boats

Do I need to insure my boat all year long?

A dilemma that many boat owners experience when they first buy a boat is whether to purchase year-round or seasonal boat insurance. When it comes to recreational boats, you're likely not operating your vessel during the winter months like commercial boats.

However, even though you won't be out on the water, not having your boat covered during the off-season is also a hazard. For example, your boat could still suffer damage or be stolen while it's stored away. Without boat insurance, you'd be responsible for paying for all repairs and replacements out of your own pocket, which can get expensive. So, opting to protect your boat year-round is often the better option.

Does boat insurance cover a blown engine?

Yes, your boat insurance covers blown engine incidents if the engine failure occurred as an accident or as the result of a covered peril listed in your specific policy. Standard boat insurance does not cover repairs or replacements that are a result of general wear and tear or a lack of maintenance.

Is my boat insured under home insurance?

It depends on the type of homeowners insurance you have. While some policies may extend coverage to your boat and trailer, others don't. We recommend looking at your policy documents to determine whether or not you have coverage, or speaking with your insurance company directly.

Do I still need boat insurance if I store my boat at the marina?

Yes, boat insurance is still required if you store your boat in a marina. While most marinas have security measures in place, your boat is still at risk of weather damage and other perils that could put you in a position where you need to pay for repairs or replacements of your boat on your own. Therefore, we highly recommend that owners purchase coverage for their boats, regardless of where they plan on storing it throughout the year.

How BrokerLink can help

At BrokerLink, we help boaters find the best boat insurance coverage for their unique needs and vessels. With access to numerous boat insurance policies from some of Canada's top insurance companies, our brokers can help you shop around, compare boat insurance quotes, unlock discounts, and help you secure cheap boat insurance that doesn't compromise your coverage. Whether you're looking for commercial marine insurance or PWC insurance, know that BrokerLink has got you covered.

Beyond this, BrokerLink is also here to answer any questions you may have, such as how to get a boat licence in Ontario, register a boat in Alberta, what to look for at boat shows in Canada, and more!

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