Boat Insurance

Find a broker that specializes in marine insurance and protect your investment

By: Mary Anne Wollison

Boat insurance may not be the first thing you think of when buying a boat, but it should be!

Finding the precise marine insurance package is as important for boaters as obtaining proper financing. It involves much more than a call to your broker and adding a rider to your current insurance. Shopping around is mandatory, but knowing where to shop is much more important. 

One cardinal rule applies – go to a specialist!

There are insurance companies who specialize in marine policies for boaters.

The type of insurance you obtain is usually determined by the size, age, construction, power, and value of your boat. Although it is often assumed that smaller runabouts have the least trouble, such is not the case.

Insurance companies often lose money on smaller runabouts due to the high volume of repairs needed through accidental damage. Often boaters with smaller boats are inexperienced and tend to venture close to shore and out of buoyed channels. Add to this the prevalence of using small boats for water skiing and you have a significant number of claims for damage and liability. In this case, it may be best to include your boat and motor as a rider to your homeowner’s policy. Be careful and opt for an all-risk policy and replacement value. A rider that states actual cash value may leave you significantly out of pocket if you have to replace your boat. Usually, deductibles on a rider are fairly hefty, sometimes more than one per cent of the boat’s value. Most insurance companies suggest a separate policy when boats are valued at more than $40,000, although this varies.

Cruisers, wooden boats, and older boats are generally excluded as riders, or else fall under a “named perils” policy rather than an “all-risk” policy.

Brad Joyce, specialist in the marine industry, advises clients to find policies specifically designed for their needs. He also suggests boaters opt for an all-risk policy whenever possible. All-risk policies generally exclude problems such as acts of war and rebellion, nuclear fall-out, and willful damage. Named perils only state what you are covered for.

There are a number of insurance companies who specialize in marine insurance. They are very competitive and usually offer comprehensive packages including hull insurance, liability, personal effects replacement, and even medical benefits. These packages are based on the value of the boat.

Some companies provide wide and comprehensive coverage for subtler problems such as mysterious disappearances of equipment, racing, extra personal expense clauses if you are stranded away from home, accommodation and transportation, and coverage against collision with under-insured boats. Specialized boaters with antique and older wooden boats must have their needs taken into account.

Special cases are usually treated individually. Costs are not simply based on boat value, but a variety of factors including engine type, operator of the boat, cooking equipment, hull type, and cruising capabilities. You may find insurance rates lesser and easier to obtain if you are an experienced boater and have passed or taken safety courses especially through the Canadian Power and Sail Squadron, today known as CanBoat / NautiSavoir, along with the various driving schools.

The sheer number of factors involved with boat insurance makes it hard to generalize since policies differ tremendously according to construction, age, and power of the boat. Always be sure to carefully read and re-read what is covered and the responsibilities of the insurance company.

High-performance boats are a special case for insurance companies. Faster boats mean a greater chance for accidents and this is reflected in the policy rates. Premiums are often several percentage points above other types of policies, liability fees are hefty, and the deductibles are substantially higher.

Older, and wooden boats usually undergo a marine survey before they are insured. Many boat insurance specialists can help by recommending several reputable surveyors. A good survey will cost roughly between six and 10 dollars per foot. Most brokerage firms can see immediately whether a surveyor has done a thorough job analyzing all general areas such as wiring, installation, fuel lines, tanks, and the hull. The best bet is to check with your agent to confirm the acceptability of your surveyor beforehand.

Most policies outline the procedure to use when you make a claim. However, common sense dictates that you should report damage as soon as possible. The insurance company will assign an adjuster. Often, adjusters are under contract in all areas covered by the insurance company. The adjuster must review the damage and agree to a reasonable amount for repairs. If you are involved in an accident, don’t rush off and get repairs done without contacting your agent. 

There are a number of brokers. Choose one that specialize in marine insurance.

You are responsible for taking care of the vessel at all times.

Similar circumstances apply to having your boat winterized and stored for the off season. You should make sure that the work commissioned is done correctly. Be certain you have proper documentation such as a signed work order form because improper winterization procedure is the mechanic’s responsibility. Generally, if a firm is charging a fee for a service they are liable if something is done incorrectly. If you have to sign a waiver when storing your boat, then it is your responsibility to check for winter damage to the best of your ability. Insurance is protection against unforeseen factors, not a license to abdicate responsibility for protecting a craft.

Most claims are settled fairly quickly since the insurance business is a service business. Because our northern boating season is often short, people want repairs done quickly so they can get underway. Any company that does not hustle to settle claims promptly will not be in business long.

When looking for insurance, investigate the options offered. You may be surprised at what you can get at competitive rates. Read a policy over very carefully to make sure it satisfies your requirements, before weighing anchor. Afterward, it may be too late and costly.

Don’t be afraid to ask questions. Adequate insurance protection not only saves you money but gives you peace of mind.