As a boat owner, boat insurance is designed to help protect yourself, your boat, and passengers against potential risks that you might face. Unfortunately for all of us who can’t see the future, insurance is a necessary part of day-to-day life. Although it may not be required by law, boat insurance can also help provide you peace-of-mind while during the boating season or in storage over the winter months. Depending on where you keep your boat in the off season, there may be insurance requirements from storage facilities. For example, a marina may require you have year-round insurance in the event your boat causes damage to the marina or other boats. Boat insurance might sound like something that’s completely different to your usual everyday insurance, but you may be surprised to hear that there isn’t too much variance from your average car insurance - just with different kinds of coverage.
Similar to other types of insurance, boat insurance protects your boat from unforeseen accidents or risks during the season and while in storage. For instance, having boat insurance could potentially help pay for boat repairs in the case of an accident, or it could help pay for legal costs resulting from a passenger injury sustained on-board. Depending on the age and value of the boat, your boat insurance policy may cover you for the replacement cost or actual cash value in the event of a claim. Replacement cost is the amount shown on your policy without any deductions for depreciation. Actual cash value is the current value of your boat less depreciation.
Depending on the age of the boat and how it is used, will determine your boat insurance coverage needs. For instance, if you use your boat as a fishing vessel you may need different insurance than a boat used for passenger transportation. Here’s a breakdown of coverages included with boat insurance:
Property Coverage - Property coverage helps protect your boat (or other watercraft) from certain risks. For example, if your boat is damaged or stolen, property coverage is there to help pay for repairs or replacement. This kind of coverage can often be applied to protect a boat regardless of whether it’s on water or on land.
Liability Coverage - Liability coverage helps to protect you against lawsuits and claims in the event that your boat is involved in an accident or other incident. Just as with car insurance, this coverage helps you pay if your boat inadvertently causes damages to other people’s property.
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.
To drive any boat in Canada you need a Pleasure Craft Operators Card (PCOC). However, there are also age-restrictions to operating motor-equipped boats without supervision.
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