Boat Insurance: Does It Travel With You To Another Province?

Boat insurance is an important consideration for anyone who owns a boat, and it's mandatory in some places. Even if it's not legally required, it can protect your investment and cover you in case of any damages or injuries you cause while boating. This includes liability coverage, which is similar to liability auto insurance, and property coverage, which covers the physical boat and anything attached to it. When buying a boat in another province, it's important to consider the taxes and fees that may be incurred when crossing provincial borders, as well as ensuring you have the proper insurance coverage for the return trip.

What does boat insurance cover?

Boat insurance is a good idea, even if not always mandatory, as it can protect your boat on the water and when it's docked. It covers you in the event of a loss or damage to your watercraft, including theft, in an accident, or damage by a covered peril (fire or lightning). It also covers damage or injury caused to others while boating.

A standard boat insurance policy commonly covers fuel spills and wreckage removal if your boat sinks. Depending on your policy, you may also have coverage for on-water towing, mechanical breakdowns, water sports, and fishing equipment.

Boat insurance covers a range of watercraft with motors, including fishing boats, paddle boats, leisure crafts, yachts, sailboats, motorboats, inflatables, jet skis, and Seadoos. It also covers other items like boat motors, trailers, and GPS systems.

There are three main types of boat insurance: property coverage, risk coverage, and liability insurance coverage. Property coverage includes the physical boat and anything permanently attached, such as the boat motor, fuel tank, oars, and anchors. Risk coverage includes theft, capsizing, fire, and collision. Liability insurance coverage protects you if you injure someone or damage their property with your boat.

The amount of boat insurance you need depends on factors such as the value of the boat, the motor size, the age, and how you use it. The general rule is that you'll pay about 1.5% of the value of your boat in annual rates.

Is boat insurance mandatory?

Boat insurance is not mandatory in most places. However, there are some exceptions. In the United States, for example, Arkansas and Utah are the only two states that require boat insurance for most boats. In Arkansas, all motorboats with engines exceeding 50 horsepower and all personal watercraft (PWC) must be covered by a liability insurance policy, with a minimum coverage of $50,000. Similarly, in Utah, all motorboats and PWCs must carry liability insurance, but motorboats with engines below 50 horsepower and airboats are exempt.

Even in places where boat insurance is not legally required, there are other factors to consider. Marinas, for instance, often require proof of boat insurance before allowing boats to dock or be stored on their property. Additionally, if you are financing your boat through a loan, your lender will likely mandate comprehensive insurance and collision coverage, in addition to a basic liability policy.

Furthermore, while not a legal requirement, boat insurance is highly recommended for financial protection. It can safeguard your watercraft, belongings, and passengers in the event of accidents, damage, or theft. The cost of boat insurance typically depends on factors such as the boat's value, motor size, age, and usage.

In Canada, boat insurance is not legally mandatory, but it is a good idea to have it all year round. This is because it can provide financial protection for your watercraft and belongings, both on the water and when docked. Additionally, marinas in Ontario require proof of insurance before allowing the use of their facilities.

In summary, while boat insurance may not be legally required in most places, it is often necessary to meet the requirements of lenders and marinas. Moreover, it is a prudent decision to protect your investment and ensure peace of mind while enjoying your boating experiences.

How much does boat insurance cost?

The cost of boat insurance depends on several factors, including the type of boat, its value, age, usage, location, and the coverage you choose. Here is a detailed breakdown of how much boat insurance may cost:

Average Costs

On average, boat insurance costs between $200 and $500 per year. This amount typically represents 1% to 5% of the boat's value, with more expensive and powerful boats falling towards the higher end of this range. For example, insuring a $50,000 boat may cost around $750 annually. Yachts, being luxury vessels, are more expensive to insure and can cost around $30,000 per year for a $2 million yacht.

Location

The cost of boat insurance also varies by location. In the United States, coastal states tend to have higher insurance rates than states with no coastline. For instance, Progressive's boat insurance rates in 2022-2023 ranged from $261 in Wisconsin to $812 in Florida. Northern states generally have lower insurance costs due to shorter boating seasons, while southern states with longer boating seasons tend to be more expensive.

Type of Boat

The type of watercraft you own will impact the cost of insurance. Fishing boats, pontoon boats, sailboats, and personal watercraft like jet skis all have distinct features that influence insurance rates. Powerboats, with their stronger engines, often fall into a higher price bracket.

Age of Boat

The age of your boat is another factor, with newer boats typically commanding higher insurance rates. However, there is a caveat; boats that have been owned by a single person may be cheaper to insure, even if they are newer models.

Usage and Experience

How often you use your boat and the purpose for which you use it will also affect insurance costs. If you use your boat for riskier activities, such as towing water skis, you will likely pay higher premiums. Additionally, experienced boaters may enjoy lower insurance rates compared to newer boaters with less time on the water.

Coverage

The type and amount of coverage you choose will also impact the cost of insurance. Liability coverage, which protects you against property damage and bodily injury claims, is essential and is usually the most expensive component. Other types of coverage include property coverage, risk coverage, and medical payments coverage.

How to get cheap boat insurance

Boat insurance is a wide-ranging market, and coverage options and insurance rates can vary significantly from one company to the next. Here are some ways to get cheap boat insurance:

Understand the Variables That Affect Your Boat Insurance Rate

Navigation area, storage location, ownership experience, claim history, and motor vehicle record are all examples of variables that help determine your coverage needs and, ultimately, your insurance rate. Each company uses its own combination of these factors to calculate whether you are high or low risk. Knowing how these variables can affect your rate will help you understand what to ask for when receiving a quote.

Take Advantage of Variable Discounts

Ask about discounts for the following:

• Automatic Fire Extinguisher System or other prevention systems
• Additional Safety Equipment such as EPIRBs, GPS systems, Depth Finders, or Radar
• Boating Education Course: If you hold a current boating safety course certificate, you may be entitled to a five or ten percent discount.
• Current Insurance: Some companies will give you a credit for keeping your boat insured.
• High Deductible: Opting for a higher deductible will generally lower your rate.
• Clean Driving Record: Safely operating an automobile may translate into a discount for safely operating a boat.
• Diesel Engines: If your boat is powered by diesel, you could save on the cost of Physical Damage coverage.
• Credit History: Some companies use credit history to determine insurance rates, so a good credit score may help you get a lower premium.
• Marital Status: Some companies consider having a spouse a positive factor, resulting in a cheaper rate.
• Multi-Policy Discount: Many companies offer a credit for insuring multiple lines, such as including your boat with your homeowners and/or auto policy.
• Navigation: Where you plan to use your boat greatly affects your insurance rate. Inland boaters are considered low risk and thus have lower rates, while coastal regions are considered high risk and have higher rates.
• New Boat: The newer the boat, the higher the discount.
• No Prior Claims: A safe boating record is important in getting the best possible rate.
• Outboard Motors: Outboard motors are generally easier to maintain and repair, so they may warrant discounts.
• Owner's Age: Older boat owners typically get a better rate.
• Owning a Home: Homeownership can also be a positive factor, resulting in lower rates.
• Previous Boats Owned: Some companies require comparable boat ownership history before insuring your newest vessel, especially for larger vessels.
• Speed of Vessel: Some companies may give a credit for boats with a maximum speed of 25 to 35 mph.
• Years of Boating Experience: More years of boating experience can have a positive effect on your rate.

Shop Around and Compare Quotes

Don't pick the first product you find. Compare quotes from different companies to find the best deals. Some companies, like Surex, can help you unlock discounts and save hundreds of dollars a year.

Bundle Your Policies

You may be able to get a significant discount by bundling your boat insurance with your home and/or auto insurance.

Take a Boating Safety Course

Check with the National Association of State Boating Law Administration to find out what types of courses are available. Taking an approved water safety course can earn you savings on your boat insurance.

Pay Your Premium in Full

You can often get a discount by paying your 12-month premium in full rather than in installments.

Stay Claims-Free

One of the best ways to keep your premiums low is to stay claims-free and maximize available discounts. Here are some tips to avoid claims:

• Never operate your boat while impaired and always navigate and operate your boat safely.
• Don't leave any valuable items onboard.
• Always have safety and emergency equipment ready and available.
• Wear approved life jackets and PFDs.
• Be familiar with your surroundings and make trip plans, advising a friend.
• Give larger boats extra room.
• Follow markers on the water.
• If you store your boat on a trailer, use locks to immobilize it (this makes it harder to steal).
• Use satellite monitoring devices to always know where your boat is.
• Install a security system if your boat is stored inside a private location.
• If stored outside, make sure it is clear of snow and ice to prevent any damage.
• Get a Power Squadron affiliation, which will give you a discount.

Consider a Marine Training Course

Enrolling in an approved marine training course will help you learn the safe navigation of your boat, and it could also help you save money with your insurance company.

Choose the Right Coverage for Your Needs

The type of boat, length, number of engines and horsepower, how you use it, and how and where it will be stored will all factor into the cost of boat insurance. For example, a high-performance speed boat will need more coverage for bodily injury and property damage liability than a pleasure cruiser.

Shop Around for the Best Company

With so many options available, it is wise to seek an insurance quote from a company that understands the boat insurance market. Finding a company with experience in the marine insurance field will ensure you're getting the exact coverage you need at the best price.

Do you need boat insurance in another province?

Boat insurance is not mandatory by law in Canada, but it is a good idea to have it to protect your investment and yourself in case of accidents, theft, vandalism, and liability. Marinas and lenders often require insurance.

Boat insurance covers liability damages if you injure someone or damage their property, as well as any damage to your boat following an accident or insured risk like fire or theft. It also covers your trailer if it gets stolen or damaged.

If you are buying a boat in another province, you will need to transfer the registration to your province and may need to pay a fee for a new VIN number. Your vehicle insurance may cover liability for a towed trailer, but not physical damage. It is recommended to get separate coverage for your boat trailer to protect against damage, theft, and liability.

When buying a boat in another province, be sure to inspect for aquatic invasive species like Zebra/Quagga mussels and stop at AIS watercraft inspections.

In summary, while boat insurance is not legally required in another province, it is highly recommended to protect yourself financially and comply with marina and lender requirements. Additionally, ensure that you have the proper coverage for your trailer and are aware of any taxes, fees, and inspections required when crossing provincial borders.

Frequently asked questions