Residential insurance policies will only provide limited coverage for watercraft – usually $2,000 to $3,000. Liability is also restricted, depending on the type and size of your watercraft.
For this reason, a separate boat insurance policy or a policy for a watercraft rider on your home insurance is necessary if you own a boat of any noticeable size or value.
Why do you NEED watercraft insurance?
You may not be aware that, in British Columbia, you are not legally required to purchase boat or watercraft insurance. However, keep in mind, the intelligent and safe boat owners will do what they can to educate themselves about how insurance will protect their watercraft, but also protect themselves against possible liability.
Two reasons you should insure your watercraft:
- to protect what is a significant investment and valuable asset
- protection from possible liability
In the event you are in an accident with your boat, and cause damage to property or, even worse, cause someone injury, without insurance, it could pose a risk to everything you own.
Questions for your agent when you ask about boat or watercraft insurance
What type of watercraft insurance do I need?
The insurance you get depends on the kind of watercraft you own. If it’s a canoe or kayak – watercraft that has zero horsepower, tends to a low value and poses minimal liability – simply add it to your existing home insurance policy. If you own a larger sailboat, however, or a powerboat, you need a dedicated marine insurance policy.
An ‘all risk’ policy offers coverage for a variety of losses. Understand that there can be exceptions, so read the fine print!
Where do I buy watercraft insurance?
Watercraft insurance tends to be complicated, so be sure to talk to an agent who has experience with marine craft and who can create a coverage package to address your specific needs.
What questions to ask my broker?
Here are a few suggestions of questions to ask your insurance agent:
- What does a policy cover? Are there any extensions included, and what conditions or warranties are required?
- How will I be compensated in the event of a claim? You’ll find that coverage is paid out in two ways:
- “Actual Cash Value” – replacement cost, minus depreciation.
- “Agreed Value” – in the case of a Total Loss, you’ll receive the limit identified on the policy.
Why should I have liability insurance for my watercraft?
Don’t take for granted that, because you’re on the water, an accident won’t happen. It can! That’s why it’s important that all of your assets are protected. In Canada, the Marine Liability Act makes clear that a watercraft owner is legally responsible for up to $1.5 million in the event of an accident. If you’re found liable, it will be your responsibility to pay.
When should I buy watercraft insurance?
When you purchase your boat and are leaving the dealership, you should be insured. Ask your broker about how any purchase deposits you’ve made on a boat are protected, and what your insurance covers – if your new boat is on order, yet before it arrives at the watercraft dealer. Request a certificate of insurance, and ask to be added to their policy as a loss payee, in case something happens to it.
When you take a loan to purchase a watercraft, insurance will not be optional, Your bank will require it.
What should I budget for boat insurance?
Often, if the value of your vessel is under $100,000, you can expect to pay approximately 1% of the insured value, or about $1,000 a year. If yours is a $500,000 watercraft expect it to cost about .5% of its value.
Are boats and yachts different when it comes to insurance?
Boats are considered 26 feet or less. Yachts are bigger than 27 feet.
Coverage for yachts will tend to be broader. It will also be more specialized because larger boats tend to go further afield with distinct exposures, compared to smaller watercraft.
Boat insurance will vary by type and length and based on the cost of the watercraft and the degree of coverage you need and desire. Some boats can be insured merely as a rider on a homeowner’s policy. However, be aware that homeowners’ coverage may not be as thorough as that of a specific marine policy.
Can I expect any discounts on watercraft insurance?
If you’ve owned and operated your vessel responsibly, claim-free, for three to five years, and have successfully completed courses through Canadian Power and Sail Squadron or Sail Canada, there are discounts for which you can qualify.
There are no discounts for simply carrying the required Pleasure Craft Operator Card. That’s like getting a discount for simply having a driver’s license.
What happens when my boat is not in use?
When you purchase an annual policy, your boat is covered no matter what or where it is – towed behind your automobile, on the water, in storage, and during the off-season. We all know that the danger of risk isn’t over just because the boat is out of the water or isn’t in use. Rather, it’s actually more likely to incur damages or sink, when you’re not using it. More electrical fires occur during the colder months, for example.
Can my insurance be voided?
Yes. If you’re involved in illegal or criminal activity, such as illegal drinking on your boat, you can expect your coverage to be null and void.
Is my boat trailer insured, too?
ICBC requires your boat trailer to have a license plate and liability insurance. Physical damage can be added to your boat policy for Agreed Value.
Each year there are many vehicle crashes that result in injury or fatality. Auto insurance is designed to protect you and your family while driving. The right coverage will provide you with peace of mind, knowing that a professional broker carefully created a package specific to your needs.