5 Insurance Factors to Consider When Buying a New Boat

Dreaming of taking to the water, exploring the great outdoors by boat, and making aquatic memories with friends and loved ones? You’re not alone; boating is an iconic Canadian pastime in its own right, much the same as fishing or even hockey. However, it’s a lot more complicated by comparison. You are responsible for the safety and wellbeing of your investment, all onboard occupants, and those of nearby vessels, in the water, and even on the shore who interact with your boat. 

One can never guarantee that a mishap won’t occur. From break-ins to running aground, damage from winter storms while in storage, component failures leading to an accident and even unintended negligence, there are plenty of reasons why boating insurance is crucial. It might not be required by law, but it might as well be, if only to protect you and your finances. 

With that in mind, let’s explore several insurance factors you should consider before buying your boat, not afterwards. These will help to ensure smoother sailing and a better overall experience as a boater. Let’s dive in!

Our Boat Insurance in Canada Checklist

Today, we’ll cover the following takeaways:

  • Obtain a Pleasure Craft Operators’ Card (PCOC)
  • Incorporate Insurance and Policy Add-On Costs into Your Budget
  • Read the Fine Print!
  • Where Will You Store Your Boat in the Wintertime or When Not in Use?
  • Look for a Year-Round Policy that Offers Agreed Value Coverage

Obtain a Pleasure Craft Operator Card (PCOC)

Are you licensed? This should be the first step before shopping for any type of boat or insurance. A Pleasure Craft Operator Card, otherwise referred to as a PCOC or boating licence, is required for any motor-powered vessel in Canada. If you don’t reside in Nunavut and the Northwest Territories, you’ll need this proof of competency, which can be obtained by passing a boating safety course test. This can be done either in-person or online, and upon passing, you’ll receive your PCOC. 

As we’ve explored in-depth previously, a licence is not the same as a boating certificate or vessel registration, so be sure to read up on the differences between them before proceeding. In short, certification is optional. Licensing is not. Without it, you run the risk of being denied insurance for your vessel, holding you responsible for any expenses related to a mishap, theft, or collision. 

Incorporate Insurance and Policy Add-On Costs into Your Budget

When shopping for boat insurance, you ought to be mindful of the overall cost, of course, but don’t stop there. What about the policy coverage elements themselves? Do they cover all the essential angles? Find out beforehand whether the package in question takes care of expenses such as coverage for personal effects, recovery costs and towing, or even reimbursement in the event of a necessary hotel stay or car rental caused by an accident while boating.

In addition, if your boat needs to be repaired, will the insurance provider arrange for new or refurbished parts? To minimize maintenance hassles and get the very most out of your policy, we recommend looking for one that clearly states that new parts will be arranged for any boat repairs. If there are no betterment fees to worry about, then that’s more good news for you and your budget.

All in all, the following are some of the key elements you should ensure your policy includes:

  • Towing and assistance
  • Trailer, storage, and transportation coverage
  • Liability
  • Hotel and/or rental vehicle reimbursement in the event of an emergency
  • New part replacements and repair services
  • Personal effects and onboard/non-removable equipment

You should also consider finding a boating insurance company that bundles all the essentials or can offer a personalized policy solution to meet your needs. It’s well worth it for the peace of mind!

Read the Fine Print! 

Some boaters don’t look too deeply into the specifics of the policy they sign up for; this is a dangerous approach as your coverage may not take care of every perceived expense that concerns you. When making a large investment such as this, it’s better to take your time, not jump into buying that sleek and beautiful vessel right away. Always examine the insurance documentation set before you. The fine print will outline all the terms and conditions, and once you sign, you must comply with the policy in question. 

Boat insurance doesn’t automatically cover every single expense under the sun, either; you’re expected as the owner to properly maintain and responsibly utilize the vessel, abiding by local boating laws wherever your outdoor adventures take you. General wear and tear is typically not factored into insurance for this reason, for instance, as boats are exposed to the elements whenever not stored away. Therefore, degradation over the years with continued use is to be expected, even with upkeep, much like with a regular automobile. 

Where Will You Store Your Boat in the Wintertime or When Not in Use?

Different risks may present themselves depending on where your boat is when not being enjoyed out on the water. For instance, when docked in a marina during a storm, a line may snap and cause it to jostle about and scrape against another vessel. Or, while transporting it from your property to a boat launch, an accident on the road could damage it severely. 

These things happen. They often can’t be avoided. However, while most boat insurance policies will cover storage, it’s important to ensure that whatever you have active will be applicable towards however you intend to transport and store it. If you have auto insurance, its liability protection can kick in when towing the boat on a trailer. Boat insurance is ideal for storage in marinas or other similar environments during the off season, and for reimbursing for the cost of the vessel itself. The optimal approach is to have auto and boat insurance to ensure there are no liability risks or unforeseen expenses left for you to deal with out-of-pocket. 

Look for a Year-Round Policy that Offers Agreed Value Coverage

If you see a policy offering cash value, it means that the payout will be based on the perceived market value of the boat or components damaged. Agreed value coverage is the better choice for boaters of all skill levels and backgrounds, as it does what it says on the tin: it’s the agreement between you and the insurer of the value. This means that no depreciation will occur in the event of a total loss, and it guarantees that brand-new replacement parts can be installed without exceeding your coverage limit. Lastly, your insurance should be active all year long, not just during peak boating season, as damage and/or other mishaps can happen just as easily during the colder months or when in storage. 
Want to learn more about boating insurance fundamentals, or are you curious about our own options here at Portside Marine Insurance? We’re happy to help you make the most informed and effective decision possible with our personalized solutions! Get in touch with us to learn more, or request a quote today.