Summer is a great time to get out on the water in Canada. After a long winter there’s nothing like heading out on a boat. Shopping for boat insurance can be confusing since this is not an insurance product that most people are familiar with. We specialize in boat insurance for several kinds of watercraft, and since our program can extend to insure boats across Canada, we come across a lot of common questions from our clients about insuring boats. Here are some tips to help you figure out how to get the best boat insurance and what options you may have depending on the type of boat you want to insure.
Tips for Shopping For Boat Insurance
Depending on the type of boat you have, you will need different types of insurance.
What Information Is Used to Figure Out the Cost of Boat Insurance?
The boat insurance company will be looking at several factors to come up with the premium to insure your boat. If you want to get the best price on your watercraft insurance and make sure you get the right coverage for your use of the boat, have the answers to these questions ready:
- Length of the boat.
- Value of the boat or purchase price.
- If your boat is an older model, some insurance companies will require a survey/evaluation to confirm safety and value of the vessel.
- The body of water on which you will use the watercraft. Will you use your boat on a lake? Will it be international or local? Questions like this are important to determine the type of insurance you need and affect the cost of the insurance.
- How will you use the boat? Will you use the boat in fishing competitions?
- Will you do water skiing or other towing of passengers?
- How many motors does it have, if they are inboard or outboard and what is the maximum speed.
- Where the boat is kept, if it will be in a marina, the security details of the location where it is kept, or if it is on your personal property.
- Where will the boat winter – will it be out of the water, etc.
What Parts of the Boat Will Be Insured?
The physical damage coverages to your boat may include coverage for:
- The boat itself
- Inboard/Outboard motors
- Contents of the boat
- Navigation Equipment
- Trolling Motors
- Depth / Fish Finders
- There will usually be a deductible associated with these coverages, and a policy limit for each section.
Who Needs to Be Insured on a Boat?
If you own a boat, you should be insured for liability on a boat policy. In Canada, if you are operating a motor driven boat, you may need a Pleasure Craft Operator Card to legally operate your boat. This rule also applies to any additional drivers or operators you may have. It becomes your responsibility as the boat owner to make sure that anyone operating your boat is properly certified. When you call to insure your boat or request a boat quote online, you will be asked who will be operating the boat and details of their experience, qualifications, and age. You may also be asked to provide information regarding their driving records. Insurance companies use this information to determine the pricing. A person who has been boating for many years will have more favorable rates than someone who is getting their first watercraft, especially if the boat is a performance vessel.
Young Operators and Boat Insurance
There are restrictions for young operators when it comes to power boats in Canada. It is important to be aware of the age restrictions and discuss this at the time you are looking to insure a boat.
For example, children under 16 are not allowed to operate a jet-ski in Canada. Children under 12 can operate vessels with under 10hp. There are many criteria to become familiar with, so it is really important to check before letting any minor operate a boat, or your insurance may not be valid.
Your insurer should be able to help you understand some of these guidelines.
You can also reference the Vessel Operation Restrictions from the Government of Canada.
What Does Boat Insurance Liability Cover?
Boat insurance liability will cover you for:
- damage to property caused by your boat
- injury to passengers
- injury to others caused by your ownership, use or operation of the boat.
Depending on whether your boat has a motor or not, and the power of the motor, your home insurance may be able to cover smaller watercraft like canoes, kayaks or paddleboats. It is always a good idea to start looking for your insurance through your home insurance broker to find out first if you can get insured as part of your home policy before you start spending extra time and money looking for boat insurance. Every home insurance policy is different, so be sure to speak with your broker to get a boat quote and see what they can do.
What to Ask Your Home Insurer About Boat Coverage
Ask about the coverage for liability, if there are exclusions or limitations, what coverage they will provide for the value of the boat, what is the basis of claims settlement (replacement cost or actual cash value), and what the deductible is.
Understanding Boat Insurance Coverage
When you’re comparing quotes for boat insurance, make sure to ask about whether the coverage you are being quoted is replacement cost or actual cash value. There is a big difference in how much you will get paid in a claim based on this information.
Actual Cash Value Boat Insurance
- Actual Cash Value on watercraft insurance is the market value or depreciated value at the time of the loss. This means that if you are insured for actual cash value, you won’t necessarily get enough to replace your boat with a new one. You will have to take whatever the insurance company determines is the value when you make your claim.
Guaranteed Replacement Cost Boat Insurance
- Replacement insurance on a boat will offer you the amount of money you need to replace the boat. You can sometimes purchase this coverage from a third party provider for new boats if your boat insurer doesn’t offer This is only available for new boats, for the first three years of age of the boat. Here’s an example of how it may work: You insure your new boat for which you paid $50,000. Two years later, you have a total loss. The value to replace your boat with an exact model is now $65,000. With Replacement Cost, you will receive $65,000 and not $50,000.
Agreed Value Boat Insurance
- Insurers also offer agreed value coverage, in which case the insurance company will list the “agreed upon value” of the boat so that at the time of a loss you know exactly how much you will be paid. With Agreed Value, the payout is limited to the agreed value. You will not get more, even if it costs more to replace your vessel. Ask your insurance company what the options are and how the claim payment would work if you have a partial or a total loss before you buy your policy.
Does Your Boat Need an Evaluation Survey for Insurance?
Each insurance company is different and will have different criteria, so if your boat is over 10-15 years old, you may want to shop your insurance and find out what the criteria will be for an evaluation, and how it impacts your coverage. Some boat insurance companies will not insure your boat if they do not have an appraisal or evaluation. In some cases, insurance companies will go as far as to tell you which evaluator’s are approved or not. Before getting an evaluation, always speak to your specific insurance company first so that you don’t have any unpleasant surprises.
Navigational Limits on Boat Insurance
Boat insurance policies usually have navigational limits worked into them, which is why you will always be asked where the boat will be used. Anytime you buy insurance or have a change to where you will operate your boat, you need to contact your insurance company and make sure that you are still within the area covered by your policy.