Boat Insurance

As a boat owner, there’s nothing like the feeling of being on the water, connecting with nature and enjoying a cool breeze. Whether you plan to fish, waterski, take the kids tubing or simply cruise, boat insurance is designed to help protect you, your boat and any passengers against potential risks that you might face.

Marinas may require you to have year-round insurance in the event your boat causes damage to the marina or other boats. Depending where you keep your boat in the off-season, there may be insurance requirements for these storage facilities as well. Although boat insurance may not be required by law, it can help provide peace-of-mind during the boating season and while in storage over the winter months.

What does boat insurance cover?

Similar to other types of insurance, boat insurance provides coverage in the event of unforeseen accidents or incidents, for example:

  • If your boat, its motor(s), boating equipment, and accessories are damaged due to collision, theft and vandalism.
  • If you and your passengers’ apparel, personal items, and sports equipment onboard are damaged or stolen.
  • It provides coverage in case you injure someone or cause damage to another person’s property or boat while operating your boat or another watercraft you have permission to use.

Types of coverage included with boat insurance

Your coverage needs depend on factors like the age of your boat and how it’s used. Here’s a breakdown of coverages often included with boat insurance and additional coverage options:

  • Property Coverage - for certain risks such as collision, theft and vandalism.
  • Liability Coverage - in the event of lawsuits and claims resulting from an accident or incident involving your boat
  • Temporary Replacement Coverage – keeps you boating with a rental boat while yours is being repaired or replaced
  • Agreed Value Coverage - may be available to cover your boat’s full insured value if it’s a total loss
  • Navigational Extension Coverage – can allow you to operate your boat outside standard navigational limits

Recommended boat insurance liability coverage

Due to increasing legal costs and lawsuit settlements in Canada, the minimum amount of coverage typically recommended by insurance professionals is $1,000,000. It is advisable to carry even higher liability limits up to $2,000,000 to properly protect yourself. Here are two points to consider when choosing your liability insurance limit:

  • If you are mooring your watercraft at a marina, what is the liability limit they require?
  • Where are you using your boat? Is it a small private lake with little traffic, or a very busy lake?
  • Are you travelling with your boat, e.g. through locks; on a trailer?

These factors, along with talking with your insurance advisor, will help you with this decision.

Advantages of getting boat Insurance

Boat insurance provides coverage in the event of loss and damage caused by:

  • Collision
  • Theft
  • Vandalism

It can also help cover you financially if you:

  • Injure someone
  • Cause damage to another person’s property or boat while operating your boat that you have permission to use

Information required when getting boat insurance

  • Boat's length, type and value
  • Condition and market value
  • Frequency/nature of usage
  • Mode of storage
  • Condition of waters/seas
  • Experience, loss and claims history of the owner and/or operators

Factors that could affect a boat insurance policy

Here are some factors that could affect your boat insurance policy

Storage Location
Damage to your boat can occur at any time – be it on the water, or when it’s in storage. Where you keep your boat can play a big factor in how likely you are to file a claim, and in the price of your policy. For example, boats that are stored wet in crowded, high traffic areas, or in areas with intense storms have a much higher risk of incurring damage. Because of this risk, the chances that you might file a claim are also higher, which may make coverage more expensive.
Navigation Area
Just as where you store your boat matters, where you pilot it can also be a major factor when it comes to your monthly payments. It goes without saying that some bodies of water are harder to navigate than others, and your insurance rates may reflect this. Because insurance comes down to an evaluation of risk, a greater risk assessment can translate to higher premiums. For instance, you may pay more for coverage to insure a ski boat as compared to insuring a sailboat. An insurance company may ask you to designate a navigation area for the boat and assess whether it is suited to operate on all the bodies of water within that area. Boat owners may be levied a surcharge to cross into different areas or denied coverage if the boat is deemed unsuitable for the designated area. Ie travelling long distances across open bodies of water.
Driving Record
A clean record is important for so many things in life and insurance is no different. Although driving a car and driving a boat are not the same, insurance companies may take into account your general responsibility while operating other vehicles to assess you in terms of risk. Someone with a clean driving record is likely to have a more favorable premium or rate than someone who has several accident claims or a DUI on file.
Boat Inspection Survey
Depending on the age, value, length and construction materials of the boat an insurance company may require a 3rd party survey of the boat before evaluating insurance options. Companies qualified to perform boat inspections will vary between regions and should be researched ahead of applying for insurance. Different insurance companies may also have different requirements for how frequently an inspection is required.
Boat Ownership Experience
Like anything else, the more experience you have with something the more you know about it. For this reason many insurance companies want to know how many years you’ve owned your boat and also how many claims you’ve filed in the past. Depending on your years of experience at the helm and your claims history, your monthly rate could be affected.

Safety Tips

Here are some tips for when you’re cruising or relaxing on the water:

  • Avoid accidents by navigating and operating safely and never while impaired
  • Never leave valuables on-board
  • Carry safety and emergency equipment
  • Ensure you have proper lights on your boat if travelling at night
  • Wear approved PFDs
  • Make a trip plan and advise a friend
  • Follow any markers and the rules of the water
  • Give large watercraft extra room

Consider these tips while your boat is in storage:

  • Lock devices to immobilize watercraft stored on a trailer
  • Install satellite monitoring systems to monitor the whereabouts of the watercraft
  • Clear snow and ice to prevent damage
  • Install an alarm system

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Boat Insurance FAQs

Will boat insurance cover a blown engine?

Boat insurance offers coverage in the event of unforeseen accidents or risks during the season and while in storage. A mechanical failure such as a blown engine is most likely not covered under your boat insurance. Check with your insurance advisor to ensure your coverage meets your needs.

What does Agreed Value coverage mean?

This means that your vehicle is not subject to depreciating market values in the event of a total loss. The appraised value, including deductibles, is what the owner will receive. For more information about this coverage, contact your insurance advisor.

Does boat insurance cover the lower unit?

Boat insurance offers coverage for risks during the season and while in storage. Make sure you properly maintain normal wear and tear on your boat, as your insurance does not cover this. To find out what your boat insurance covers, contact your insurance advisor.


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