9 Things to Know About Boat Insurance in Ontario
People love their boats and they are great fun but they can pose significant risks for their owners. Here are 9 important things to know about boat and PWC insurance in Ontario.
Boat and PWC insurance is not mandatory in Ontario
Ontario does not have a law that requires you to carry insurance on your boat or PWC. However, there may be times when you have no choice but to get insurance. For example, you will not be able to finance the purchase of your boat without insurance. A marina may ask you to provide proof of insurance before you can store your boat on their property.
Agreed Value vs Actual Cash Value
A boat insurance policy provides physical damage coverage on an Agreed Value basis or an Actual Cash Value (ACV) basis. The amount you will receive in the event of a total loss can vary greatly between an Agreed Value policy and an ACV policy. An Agreed Value policy will pay you the amount stated on the declaration page. An ACV policy will pay you the replacement cost of the boat less depreciation. Most stand-alone boat insurance policies are on an Agreed Value basis.
Stand-alone boat insurance policies vs home insurance policies
Most insurance companies will allow you to add your boat and PWC to your home insurance policy up to a certain length and horse power. This is often a convenient and cheaper way to insure your boat or PWC. However, a home insurance policy does not properly cover boats and you may get some surprises when you submit a claim. Depreciation will be deducted in the event of a total loss. There may also be restrictions on other coverage such as emergency towing and loss of use. Finally, a claim on your boat is a claim on your home insurance policy. If you have too many claims, your insurance company may cancel your home insurance policy on renewal. You will have to go to a specialty insurer and pay 2 to 3 times more than you were paying previously with less coverage. A stand-alone boat insurance policy may cost a little more but the coverage is better and a claim will not affect your home insurance policy.
Insurance companies may ask for an acceptable marine survey by a qualified marine surveyor for boats over a certain age. A marine survey is an appraisal of your boat and can cost more than $200. The marine survey can be a dozen pages or more and include pictures, descriptions, and recommendations for repairs or upgrades. Recommendations are categorized by those that are optional, important or critical. An insurance company may decline to insure a boat until the recommendations have been taken care of.
Boat Insurance Costs
There are many factors that determine the cost of your boat insurance such as value, length, horse power and top speed. Minimum premiums are around $250. Average premiums are around $400. Premiums increase as the value of the boat, trailer, equipment and accessories go up.
Boat insurance policies contain lay-up periods that specify a time when your boat must be out of the water. An example is December 1st to April 1st. If you use your boat on the water during the lay-up period, you will not be covered by your insurance. Ask your broker for the lay-up period in your policy.
Boat insurance policies contain restrictions as to where you can operate your boat and still be covered. This area usually includes all of Canada and the U.S.A. not south of 40° North. Ask your broker for the navigational limits in your policy.
All operators of recreational powered watercraft in Canada regardless of age, engine horsepower or length of boat must obtain the Pleasure Craft Operator Card (PCOC). Failure to carry the PCOC card on your vessel will result in a $250 fine.
The Canadian Power and Sail Squadron (CPS) offers boating courses beyond the basic PCOC course. For example, the Boating Essentials course will teach you how to use a GPS/chart plotter and understand the use of paper charts and coastal navigation. Most insurance companies will give a 10% premium discount to members of the CPS.