Boat Insurance: What is It and Do I Need It?

The last thing you want to worry about when enjoying your boat over the summer is the financial and legal liabilities resulting from an accident with your craft. Although not legally required in Alberta, boat insurance is a must for all recreational boat owners.

Boat Insurance

Boat insurance protects all kinds of watercraft, including:

• Fishing boats
• Sailboats
• Cruisers
• Motorboats
• Yachts
• Jet skis
• Runabouts
• Inboards
• Outboards
• Pontoon

Before purchasing boat insurance, it helps to know what it covers and how you’re protected. We answer some of the most frequently asked questions from our clients below. Watercraft insurance policies vary widely by insurance companies, which is why it is best to consult with a broker.

What are the Types of Coverage under a Boat Insurance Policy?

Much like auto insurance and home insurance policies, boat insurance includes different coverages that will protect you and others on your watercraft. Keep in mind you may be able to ensure your boat with your home policy, however traditionally a specific marine policy provides better coverage and optional coverages. You should also note that there are exclusions and limits that will apply to all policies. There are some important coverages to be aware of:

• Liability – This provides coverage against the liability imposed by law upon the insured for loss or damage arising from the ownership, maintenance, use or operation of the vessel resulting from bodily injury to or death of any person or damage to property and is subject to limits and exclusions.
• All Risk- This type of coverage insures against accidental and direct physical tangible loss of or damage to the Insured Property from any external cause. The coverage is subject to exclusions, warranties and limits.
• Medical Payments- may pay up to a certain limit for reasonable medical expenses subject to conditions and exclusions.
• Accidental Death Benefits- may pay up to a limit for loss of life as a direct result of the use of the watercraft subject to conditions and exclusions.

Ask your insurance broker about additional coverages that can enhance your policy, including:

• Guaranteed replacement cost
• Expanded navigation territory
• Increased personal effects
• Incidental use
• Increased loss of use
• Pollution/Spill Liability

Am I Covered If I Lend My Boat to a Friend?

If a friend borrows your boat and there is an accident, you generally would still be covered as long as they had permission and is authorized by law to operate. Most boat insurance policies protect you, your spouse, the relatives of either, any person under 21 in their care, and any other person using your boat with your permission without charge.

If you’re renting your boat out however, you will need a different type of insurance policy as recreational boat insurance does not cover commercial or for-profit use.

The Bottom Line

The right boat insurance policy is going to greatly depend on the classification of your watercraft, your usage, and your needs. Knowing you have the proper coverage with your boat will give you peace of mind to enjoy your summer adventures in the water. To make sure that you have the right protection, it’s always best to speak to a professional insurance broker.