We get a lot of calls from first time boat insurance buyers who are overwhelmed by the options available and don’t have a clear understanding of what it is boat insurance offers. It’s really important you understand what it is you are buying and you should choose a provider who takes the time to make sure you are clear on the options.
Below is a list of the most important questions you should ask when you are shopping for boat insurance. A good marine insurance provider should be able to clearly answer these questions for you.
1. If I have a total loss, for example the boat is stolen, what will I get for my boat?
This is the most important question you ask because it tells you whether you have a policy that will give you a depreciated value for your boat, called Actual Cash Value (ex. you paid $25,000 for the boat and will only get $15,000 when it’s stolen), or you will get an Agreed Value (ex. you get the $25,000 you insured the boat for).
2. If I have a partial loss, for example I hit a rock and damage the stern drive, will you use aftermarket or rebuilt parts to repair it?
The answer to this questions tells you if you will get new parts only for any repairs that need to be made following a claim. New parts are better because you could get the manufacturer’s warranty on those parts.
3. If I choose not to lock up my boat or trailer or I forget one day and my boat is stolen will the theft still be covered?
This question is asking about theft restrictions in the fine print of a policy. You are asking if there are any conditions you need to know about.
4. Do I have to store my boat in a locked building?
This questions is pretty self explanatory. Again, you are asking about conditions on the policy.
5. If I purchase a $2 million liability limit, does this mean the $2 million extends to watersports?
Not all boat insurance providers extend the liability limit to watersports and some don’t even offer coverage for watersports on certain classes of watercraft (ex. personal watercraft).
6. Does the $2 million extend to pollution liability?
You are asking what would happen if you hit a rock, sank and released oil or gas, causing environmental damage or needing a wreck removal. Would the policy respond with the $2 million liability limit or is the liability amount reduced in this instance. Most people don’t think about this kind of a claim, but environmental cleanup is a huge bill.
7. What happens if you are injured by a boater who doesn’t have insurance?
Here you are asking about ‘uninsured boater’ coverage. Boat insurance is not mandatory in Ontario and there are a lot of boaters who don’t carry insurance. If you are injured by one of these boaters your compensation is limited to how deep their pockets are. In other words, you aren’t guaranteed to receive any substantial compensation and may be left paying for your medical expenses yourself, or worse left without an income if you can’t return to work. You want to make sure that the liability limit you have paid for on your boat policy will respond if an uninsured boaters causes damage or injury. You want your $2 million liability limit to be available to you to cover your expenses.
8. Does the policy cover Emergency Towing?
If you run out of gas, have a mechanical breakdown or the battery goes dead and you need to call a local marina for a tow, will your insurance policy cover the cost? A good marine policy will have Emergency Towing coverage.
9. If I have a claim on my boat does it affect any of my other insurance policies like my house policy?
You are asking about ‘Separation of Risk’, something most consumers don’t think about. This is a question you want to be sure to ask, particularly if you are talking to the broker who handles your home insurance policy. If you attach your boat to your home insurance policy you want to be careful that a claim on your boat does not affect that home policy. For example, you have your boat on your home policy as a rider and it’s stolen. You no longer have a boat, but you are paying for that claim on your home insurance policy.
This list is not exhaustive but it does highlight the key areas of a sound marine insurance policy. When you are doing your shopping, ask the questions. A good marine insurance provider should be able to answer them clearly. Not all policies are the same and, while price is important, it certainly shouldn’t be the only thing you ask.