Insurance is one of the few things we buy that we hope we will never have to use. You may have experience buying and perhaps making a claim under your car insurance, but you may not be familiar with boat insurance. Here are a few important things you need to know about boat insurance before you buy it.
Boat Insurance is Not Mandatory in Ontario
Although no Ontario law requires you to carry insurance on your boat, there may be times when you have to buy insurance. A marina may require insurance if you want to store your boat at their facility. A finance company will definitely require proof of insurance prior to lending you the money to purchase a boat.
Agreed Value Or Actual Cash Value
A boat insurance policy provides physical damage coverage on an Agreed Value basis or an Actual Cash Value basis. The amount you will receive in the event of a total loss will vary between an Agreed Value policy and an Actual Cash Value policy. An Agreed Value policy will pay you the amount stated in the policy. An Actual Cash Value policy will pay you the replacement cost of the boat less depreciation. Most stand-alone boat insurance policies are on an Agreed Value basis. The premium for an Agreed Value policy will be higher but it will pay the agreed upon amount which will avoid disputes over the depreciated value.
Stand-alone Boat Insurance Policies vs Home Insurance Policies
Most insurance companies will add your boat to your home insurance policy up to a certain length and horse power. This can be a convenient and less expensive way to insure your boat. Unfortunately, a home insurance policy does not properly cover a boat. Depreciation will always be deducted in the event of a total loss. There may also be restrictions on other coverage such as emergency towing. It is important to know that a claim on your boat is considered a claim on your home policy. If you have too many claims, your insurance company will increase your premium or even cancel your home insurance policy.
Marine Surveys
If you have an older boat, the insurance company may ask for a marine survey by a qualified marine surveyor. The marine survey can include recommendations for repairs or upgrades to the boat. The insurance company may decline to insure the boat unless these recommendations have been addressed.
Lay-up Period
Boat insurance policies contain lay-up periods that specify a time period during which your boat must be out of the water. If you use your boat on the water during the lay-up period and are involved in an accident, you will not be covered by your insurance. You should ensure that you are aware of the lay-up period in your policy.
Navigational Limits
Boat insurance policies contain restrictions as to where you can operate your boat and still be covered. All of Canada and the U.S.A. not south of 40° North are usually included. Make sure you are aware of the navigational limits in your policy.
Advanced Boating Courses
The Canadian Power and Sail Squadron (CPS) offers boating courses beyond the basic Pleasure Craft Operator Card (PCOC) course. Some insurance companies give a 10% discount to members of the CPS.
Conclusion
Hopefully you will never need to call on your insurance company for a claim, but if you do, you will be glad that you knew these things when purchasing your boat insurance.
This blog post was written by Edward (Ted) Masters, a member of the Disability Insurance Claims and Personal Injury teams. He can be reached at 613-566-2064 or at ted.masters@mannlawyers.com.
