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Why You Need Boat Insurance

Published By: Jonathan Lee

Just as with driving a car, a certain degree of risk comes along with operating a boat. Safe boating practices and education help mitigate that risk but having – and thoroughly understanding – an insurance policy is your best form of protection.

Bertrand Rouault, Director of April Marine Canada, offers some insight into what boaters should know before shopping for a policy.

Q. How is marine insurance different from automotive insurance?

A. Unlike automotive insurance, boat insurance is not required in Canada. However it is strongly recommended. Boating is a wonderful experience but it also presents the risk of colliding with other vessels or docks, creating passenger accidents or injuring other people on the water. The incurred costs can be significant, and without insurance, you may end up paying compensation for a lifetime. Boats can also be stolen or you could be the victim of a shipwreck or a fire.

Another difference from auto insurance is the risk of getting a policy from an insurer without specific marine expertise or specialized nautical agents, which may result in boat coverage that leaves boaters exposed to greater risk.

Not as systematic and lesser known than automotive insurance, boaters may not even appreciate the importance of insuring their boats or personal watercraft.    

Q. How much could insurance approximately cost me each year?

A. The amount of your premium depends on numerous factors, including the value of your boat (including trailer and equipment) and the age of your boat.

Discounts can also apply depending on several factors such as your age and if you taken recognized boating courses. Quick quotes for approximately determining the cost of a policy for your boat can be found on the insurance provider’s website without any obligation.

Q. Are there different types of marine insurance (liability vs. collision)?

A. Basically, two types of coverage are available: All Risk or Liability only. However, tailored coverage is available depending on the type and value of your boat and type of boating excursions your have planned. For example April Marine offers specific coverage for powerboats, personal watercraft and sailboats. Specific policies are available for high value boats (worth $ 250,000 or more). If you’re planning to sail south of 40th parallel or crossing the Atlantic, specific protection plans exist for these types of trips.

Q. What factors could make my policy more expensive?

A. Your premium may be increased if you’ve had a driver's license suspension or depending on the number of claims that you have recorded in the past three years.

Q. What doesn’t a policy typically cover?

A. Things that are not covered are generally associated with the normal wear of the boat, including marks, scratches and bumps. This would also include damage caused by mechanical breakdown or dysfunction, corrosion, rust, dampness and weathering. Manufacturing defects and problems caused by ice and all extreme temperatures are not covered. Other things that would void a policy can include property illegally acquired, kept, stored or transported as well as property subject to forfeiture.

Q. What could a policy cover that's worth paying extra for?

A. We recommend comparing the different offers on the market. The highest price and lowest premium isn’t always a guarantee of the best policy.

Your premium depends of the category of your boat and its total value including all equipment. The premium can also depend on your plans. If you sail in the south, the premium will be higher. An insurance premium is always based on the risk to the insurer.