Top Questions About Boat Insurance for Newbies
If you’ve just bought a boat and are new to boating, you need to know all about the different ways that boat insurance can protect your investment.
First-time boat buyers, or newbies, should know as much about boat insurance as possible to help them get the right insurance coverage.
As a first-time boat owner, here are your top questions answered about boat insurance:
- Do I need to get boat insurance?
No, it is not legally required in Canada. It is recommended, though, and your lender may require it as a condition of financing. Marinas may also require boat insurance for mooring.
A typical boat insurance policy protects your boat, motor, equipment, and passengers.
You may also hear boat insurance called marine insurance in provinces such as Saskatchewan and New Brunswick. They are the same thing.
- Is boat insurance like car insurance?
Marine insurance usually provides similar coverage to car insurance, such as coverage for:
- Damage to your boat, motor, and attached equipment
- Damage to another boat or to someone else’s property caused by your boat
- Liability coverage in the case where you are liable for property damage or if a person is injured or killed.
- Medical payment coverage for injuries
- How much liability coverage do I need for my boat?
Liability insurance in your boat policy covers you for legal liability if you are negligent while boating and injure or cause the death of another person or cause damage to the property of another person.
It’s recommended that you have $3 million in liability insurance coverage. Boat owners need to ensure their boat insurance policies have enough coverage for potential liabilities.
- What happens if an uninsured boater hits my boat and causes damage and injury?
If another boater without insurance or with inadequate coverage causes an accident that injures your passengers, your boat insurance's uninsured/underinsured boater coverage may come into play, helping cover your passengers' medical expenses.
- What else does marine insurance cover?
Comprehensive boat coverage generally includes coverage for various types of covered perils, such as collisions, fire, theft, vandalism, sinking, and weather-related damage like storms or lightning strikes). It’s considered the best way to protect yourself, your boat and passengers, and other boats and passengers.
It can also typically cover but check your policy:
- Rodent damage
- Wreck removal
- Pollution cleanup
- Emergency towing
- Repairs for collision with dock or underwater/ floating objects
- Does my home insurance cover my boat?
The cost to replace or repair your boat will likely be greater than the amount covered by your homeowner’s policy. And you will need to pay the deductible on your home insurance policy, too.
If your boat is worth less than $3,000, under 26 feet (eight metres), and its horsepower is less than 50 HP, it’s likely to be covered under your home insurance. That could include a canoe or rowboat.
- How much does boat insurance cost?
The cost of marine insurance depends on such factors as:
- The type of boat and its size
- Age of the boat
- Its value
- Location
- Boating experience
- Claims history
- What is agreed value versus actual cash value?
With an agreed value policy, your boat insurance provider agrees to honour the value of your boat at the time the boat policy was written. That is the amount you will receive if you have a total loss. There is usually a time limit for agreed value coverage.
An actual cash value policy on your boat insurance will pay out the replacement cost of the boat in the event of a loss. Depreciation, damage, and wear and tear are factored into the actual cash value you will receive.
As a newbie boat owner, do your research to make sure that you have the right bat insurance to protect yourself, your passenger, and your investment.
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