What To Know Before Purchasing Boat Insurance

A family pictured relaxing on a yacht, enjoying a boat ride

If you’re a seasoned boater, you may know that owning and operating a boat comes with inherent risks. If you’re looking to purchase your first boat, you may not be aware of coverage options available to protect your watercraft.

While it isn’t mandatory to have boat insurance in Canada, it can protect against risks such as damage to your boat or motor, liability, and unforeseen events.

So, if you plan on buying a boat this summer it’s important to ensure that you, your boat, and your onboard belongings are safeguarded financially.

Why get it?

Though it’s not a requirement in Canada, boat insurance is an important consideration for watercraft owners. As with most heavy machinery, there are inherent risks to consider. For example, if you’re out on the water your boat may be damaged by rocks and other debris that may cause your boat to sink, your engine could stall and you’ll need emergency water towing, or even protecting your belongings (or the boat itself) from theft.

Though coverage will vary from insurer to insurer, the Insurance Bureau of Canada (IBC) mentions that your coverage options will generally include the following:

  1. Hull and Machinery – Provides damage coverage up to the total loss of your boat and attached equipment.
  2. Protection and Indemnity – Provides liability coverage that protects you against property damage and bodily injury. It can also provide help with investigating a loss and preparing your defense. If you are found to be at fault, it can provide payment up to the limit listed in your policy.
  3. Medical Payments – Provides coverage for incidental medical expenses due to an incident on your boat.

How to choose the right coverage?

Just like with any other type of insurance, when speaking with an agent they will ask a series of questions to ensure that the appropriate coverage is applied to your boat.

According to Gene Myles, Allstate agency manager in Sudbury, he recommends that when you buy a boat ensure that you understand all its components.

“Insuring your boat depends on several factors, like the type of boat you own, engine size and length of boat,” said Myles. “Be sure to have this information handy when assessing which coverage is right for you.”

Of all the components of the boat, one of the most important things to consider is the type of engine.

Though it may vary with different insurance companies, with Allstate Canada your boat may be covered under your home insurance if you have the VIP policy* as an endorsement (or “add on”). However, note that watercrafts covered under your VIP home policy will only be protected up to a certain size and value. If the size and value of your boat exceeds what is outlined in your policy, the boat will require its own separate policy to make sure that proper coverage is provided.

There are several types of boats that may be covered under boating insurance, so to see if your watercraft is eligible, be sure to speak with your local agent.

Disclaimer: This information has been provided for your convenience only and should not be construed as providing legal or insurance advice.

*Terms and conditions apply. Coverage, perils, discounts, and availability may vary by region. This contains information about coverage offered by Allstate but does not list all of the conditions and exclusions which apply to the coverage described. The wording of the actual policy and local law will govern.