Boat insurance coverage questions

Whether you're new to boating or have been a boat owner for years, you likely have some questions regarding boat insurance coverage. Luckily, the insurance experts from BrokerLink have compiled a complete list of frequently asked questions that may have crossed your mind once or twice. To have your boat insurance questions answered, read through our guide below!

What is boat insurance coverage?

Similar to the standard car insurance policies out there, the same can be said for boat insurance. Regardless of the insurance company you choose to partner with, if you ask for boat insurance, the following coverages will be included automatically:

Liability insurance

Third-party liability insurance protects boat owners if they cause bodily injury or property damage to a third party while operating their watercraft. Should a third party file a lawsuit against you, your liability coverage will cover the cost of medical payments, repairs, replacements, legal fees, and other costs associated with the settlement of your legal proceedings.

Collision coverage (hull insurance)

The next portion of a standard boat insurance policy is collision coverage. This insurance coverage will reimburse you for any repairs or replacements your boat requires from a boating accident while out on the water, during transport, or while parked. It will also cover your personal property if it is damaged.

Comprehensive coverage

Lastly, there's comprehensive coverage. Comprehensive coverage protects you in the event physical damage is done to your boat during a non-collision event. This physical damage coverage includes physical damage from theft, vandalism, fires, certain weather conditions, falling objects, and other events listed in your specific policy. Again, your personal property is included in this as well.

Agreed value vs. actual cash value

When it comes to your insurance policy, your insurance company will either offer an agreed-value plan or an actual cash-value policy:

Agreed value

With an agreed value policy, the boat owner will receive a pre-determined amount for their vessel from their provider if it is stolen or damaged beyond repair. The agreed-upon value is determined by the insurance provider and owner when they initially purchase the insurance coverage. While you may have a higher insurance premium with this method, the agreed value does not take into account any depreciation, which means you'll receive a larger amount should you need to file a claim.

Actual cash value

Actual cash value is the market value of your boat in its current state. Actual cash payment measurement is used by insurance companies to assess how much money a policyholder will get if their boat is stolen or severely damaged to the point that it is no longer operational.

If your policy uses this method, the reimbursement you get will be based on the value of the boat minus the actual cash value depreciation. Generally, providers prefer to calculate actual cash value over the agreed value because it means they will have to pay the policyholder less if they file a claim.

Is boat insurance mandatory in Canada?

No, unlike other forms of coverage, there are no boat insurance laws in Canada that state a boat owner requires a boat insurance policy to operate a watercraft. That being said, operating a boat comes with risks. Without proper coverage, you could put your finances and interests at risk.

Additionally, boat purchases are expensive. To ensure your investment is protected on and off the water, you'll need to insure your boat for peace of mind.

How much does boat insurance cost?

So, how much does boat insurance cost? Just like car insurance, your boat insurance policy insurance costs will vary from those of other owners. An insurance company will run a risk assessment on you and consider several factors before determining your insurance costs. Common factors an insurance provider will take into account include:

• The type of boat you have.
• The current condition of your personal watercraft.
• The current market value of your boat.
• The types of insurance features you opt for and your minimum coverage limits.
• How often you are using your boat.
• Where you plan to store your boat during the off-season.
• And more.

To ensure you get the best insurance coverage and avoid paying for unnecessary and costly features, we highly recommend working with a broker instead of an insurance agent. Insurance brokers work independently of companies, allowing them to help you compare coverage options, unlock discounts, and compare quotes free of charge.

By doing so, you can customise your boat insurance to fit your unique needs and boat, which will give you more confidence out on the water.

What does marine insurance cover?

A commercial marine insurance policy is a type of insurance that protects your boat and your business if you own and operate a commercial boat on the water. Marine insurance policies work similarly to other boy insurance policies and will protect you against bodily injury liability, property damage, seasonal events, and more. Many insurance companies in Canada offer this type of coverage for marine insurance specialists who spend the majority of their time out on the open waters.

Are boats covered under home insurance?

It depends on the type of home insurance you have. While some home insurance policies may have coverage for boats, it ultimately depends on your insurance company and the specifics listed in your policy. We recommend reaching out to your insurance company and asking for clarification. If you have two policies with a single provider, you may be able to bundle your coverage and receive a discount on your insurance premiums.

Why is boat insurance important?

If you're still on the fence about whether or not purchasing a boat insurance plan is worth it, we're here to tell you that there are numerous reasons why boat insurance is important. Here's a closer look:

Provides financial protection

Legal fees and boat repairs are expensive. Compared to the minimal cost of purchasing a boat insurance plan, you can potentially save thousands of dollars in the event a liability claim is filed against you or your boat is damaged in a collision.

Peace of mind

Being out on the water comes with many risks. If you want to enjoy your experience and have peace of mind while doing so, having the right coverage in place can make a world of difference.

Fully customizable

Similar to other types of insurance, boat insurance is completely customizable to your unique boating needs, risk tolerance, and budget.

Do I need to inform my insurance company if I make modifications to my boat?

Yes, we recommend informing your insurance provider if you have made modifications to your boat, given that your boat insurance requirements may change. For example, if you were to make a modification that was then damaged as the result of a collision, your insurance provider may not cover your claim, given that the modifications were never noted on your file, leaving you to pay for the repairs. Therefore, regardless of whether the modification is minor or not, informing your provider is the best way to ensure that you are fully protected while out on the water.

How can I keep my boat safe and secure?

To keep your boat safe and secure, boaters require boat insurance coverage. An insurance policy is like a security blanket that not only protects your physical property but also your finances and interests in the event something unexpected occurs. Beyond insurance, you'll need to make sure your boat is stored in a safe location during the months when you're not on the water to deter theft, vandalism, and other damages. If possible, we recommend installing an alarm system on your storage unit for added protection.

Get competitive boat insurance rates with BrokerLink

At BrokerLink, we help boat owners find the best boat insurance rates, give professional advice, and help them navigate the uncharted waters of insurance claims. Beyond standard insurance policies, we can also help you insure your boat with the following policies:

• Seasonal boat insurance
• Yacht insurance
• Commercial fishing boat insurance
• Marine insurance
• And more.

We've got multiple insurance brokers and brokerages located across Canada. If there's a BrokerLink in your neighbourhood, come visit us in person to work with a broker one-on-one. If you're not close by, feel free to give us a call over the phone any time!

Alternatively, you can get a boat insurance quote from the comfort of your home for free and within minutes using our online quote tool!

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FAQs about boat coverage

What should I look out for at a boat show?

Boat shows in Canada are a great way to check out high-performance boats, meet other boat enthusiasts, and learn more about boating in general. We recommend signing up for a couple of seminars and taking advantage of new device demonstrations. You can also ask vendors' advice and hop on the boat displays if you're shopping around for a new boat. Keep in mind, however, that boat shows can be overwhelming with lots of foot traffic and vendors.

Is a boat licence mandatory to operate a boat in Canada?

Operating recreational boats in Canada is an activity that many Canadians and boat enthusiasts enjoy throughout the year. As you know, boat insurance isn't mandatory. So, what about a boating licence? The short answer is yes. If you intend to operate a boat that is 12 metres or less, you'll need to apply for a pleasure craft operators card.. This can be obtained by taking an online pleasure craft operator course. This licence does not expire, nor does it have to be renewed. You will then receive your card via mail. This must be carried anytime you are operating your boat on the water.

Does liability coverage protect you against intentional harm?

No, your boat liability insurance will not provide coverage to those who intentionally cause harm while operating their personal watercraft. Liability insurance is only meant to protect the policyholder if bodily injuries or property damage occur as a result of an accident.

What boat safety requirements should I be aware of?

Before heading out on the water, you'll need to ensure that you have your boat safety requirements in check. One of the most important requirements is a life jacket, one for each person on board. There should be several sizes available, including ones for children. Beyond these, you'll also need a throwable flotation device in case someone falls overboard. A fire extinguisher, visual signalling devices, and sound devices are also needed. For more information, brush up on a first-time boat owner checklist.

How can I get a boat licence in Ontario?

To get a boat licence in Ontario, you'll first need to complete a boat safety course and pass an exam. Once you pass the Ontario boating exam, you'll be approved for your licence, which will be sent to you in the mail. In the meantime, you'll be issued a temporary licence, which you'll need to keep on you at all times while operating your boat.

How can I register a boat in Alberta?

To register a boat in Alberta, you'll need to fill out a registration form, which you can find on the Ministry of Transport website. The application form will ask various questions, such as the value of your boat, the type of boat you have, proof of your Canadian citizenship (yes, only Canadian citizens can register a vessel), proof of ownership, and more. Once your boat is registered, you'll receive a title, have the ability to name your boat, and be able to fly whatever flag you wish.

If you have any questions, contact one of our local branches.