What Does Boat Insurance Cover in Canada?

With summer being a few months away, many Canadians are starting to plan their vacations and getaways. If you own a lakeside property, like to spend your time fishing or simply love being on the water, you’ve probably thought about buying a boat.

Boating is a fantastic way to spend your summer vacation; you get to enjoy the water, fresh air and everything else that Mother Nature has to offer. But before you start looking into boats that are for sale, you should take a moment to learn about boat insurance.

If you’re not familiar with this niche type of insurance, you’re probably wondering, “what does boat insurance cover in Canada?”.

We answer this question, and many more, below. Continue reading to get started.

What is boat insurance?

Boat insurance coverage is a unique type of insurance that financially protects various types of motorized watercraft, including leisure craft, fishing boats and yachts. 

Boat insurance financially protects boats from unforeseeable events (lightning, fire damage, etc.), theft and damage from accidents, which makes it an invaluable asset to boat owners in Canada.

What does boat insurance cover in Canada?

For those who don’t know, “boat insurance” is an encompassing term for multiple coverage options. Knowing the differences between these types of coverage options is beneficial, as it allows you to make an informed decision when it comes time to invest in a policy.

The three primary types of boat insurance include the following:

• Property coverage: Property coverage financially protects the boat’s physical structure along with components that are permanently attached to the watercraft. Some examples include anchors, oars, and integral parts, like the motor.
• Liability insurance: Liability insurance financially protects boat owners if they cause third-party property damage or an injury.
• Risk coverage: Risk coverage protects policyholders from a variety of miscellaneous risks, like capsizing, collisions, fire damage, etc.

Additionally, according to the Insurance Bureau of Canada (IBC), private, recreational boat owners have a handful of other options, including the following types of coverages:

• Protection and indemnity coverage: Protection and indemnity coverage financially protects policyholders from property damage and physical injuries. This coverage can also help cover legal and miscellaneous fees if there’s a loss and you’re deemed at fault.
• Medical payments: Medical payments coverage helps cover medical expenses that you incur due to an injury on your boat.
• Hull and machinery coverage: Hull and machinery coverage covers expenses related to damages (up to the total loss) of your watercraft and equipment.

What does boat insurance not cover in Canada?

When it comes to boat insurance, there are a handful of exclusions that policyholders should take note of. These exclusions will depend on the type of coverage you have and your provider, but generally, boat insurance does not cover losses related to the following:

• General wear-and-tear
• Weather
• Gradual structural depreciation
• Mold
• Damage from insects or wildlife
• Effects caused by marine life

Additionally, some plans do not cover the following:

• Manufacturer defects
• Blistering
• Marring
• Scratching

Be sure to ask your insurance advisor about the exclusions before committing to a boat insurance policy.

4 boat insurance coverage questions answered by our pros

There’s no denying that insurance can be a complicated topic, especially when it comes to niche coverages like boat insurance.

Our advisors receive countless questions about boat insurance from curious policyholders, so we’d like to clear the air and answer your questions!

#1 — How much does boat insurance cost in Canada?

The total price of your boat insurance will depend on a number of factors, including :

• Your provider
• The types of coverage you choose
• Year make model and length
• Value of the vessel
• Size and max speed of the engine
• Age of operator and their road driving history
• Waters the vessel will be used in (inland lakes or ocean?)
• Storage - at home or a marina

That being said, most boat insurance providers charge roughly 1.5% of a boat’s value for coverage.

If you want to estimate your rates, all you need to do is multiply the price of your boat by 0.015. For instance, if your boat is worth roughly $100,000, you’ll end up paying approximately $1,500 for boat insurance (annually).

Although this may sound like a significant expense, it’s well worth it. 1.5% of your boat’s value is a small price to pay to ensure that your vessel is financially protected.

#2 — Is boat insurance mandatory in Canada?

No, boat insurance isn’t legally required in Canada. You’re able to purchase and operate a boat without a boat insurance policy (you still need to have the required documentation, like your Pleasure Craft Operator card). If you own an old boat, you may not feel that boat insurance is financially worth it.

That being said, boat insurance is incredibly beneficial, as it helps policyholders financially protect themselves from unforeseen events, accidents, and theft.

Additionally, one of the most significant unforeseen events is environmental pollution, which can have severe consequences. In the event that your boat leaks mechanical fluids into a water system, you would be held responsible for the subsequent environmental cleanup. The extent of the leakage determines the potential magnitude of the fines and cleanup costs, which could amount to hundreds of thousands of dollars.

#3 — Does boat insurance cover sinking in Canada?

Yes, if your boat sank due to an unforeseen risk or accident, your boat insurance policy may cover the expenses. Risks like sinking, capsizing, etc. are generally covered by the “risk coverage” portion of your boat insurance policy.

#4 — How can you save on boat insurance in Canada?

There are several things that you can do if you want to lower your boat insurance rates. Some examples include:

• Increasing your boat insurance deductible
• Staying claims-free
• Get a Power Squadron affiliation
• Bundle your boat insurance with your home or auto insurance policies (most bundles are 40% to 50%)
• Take a marine training course
• Store your boat in a private location

Lastly, you can get lower boat insurance rates by teaming up with an online insurance brokerage like Surex. Online brokerages work with a variety of boat insurance providers in Canada, allowing policyholders to compare multiple quotes in one fell swoop. If you spend less time comparing insurance quotes, you get to spend more time enjoying your boat this summer.

Save up to 50% when you bundle your boat insurance policy with your Surex insurance advisor

“What does boat insurance cover?” is just one of the many questions we’ve received about insurance. If we didn’t answer your question in today’s article, feel free to reach out to a Surex insurance advisor today.

Our advisors work with some of the top-rated boat insurance providers in Canada, including Aviva and Intact.

Contact one of our trusted team members today to start comparing boat insurance quotes in ten minutes or less!