Insuring the boat

Recreational boating is a favourite pastime for many Canadians.

A luxury item like a boat or yacht can be a great purchase in this economy. Manufacturer’s prices are low to stay in business, and Canadians still have access to consumer loan financing at relatively low interest rates. And due to the strength of the Canadian dollar, imports have become more affordable in the past couple years.

You can also find deals when looking to insure your boat. In trying to find the best value for your insurance dollar, an insurance broker can consider whether you would be eligible for policy credits related to the type of watercraft being covered. For instance some insurance companies offer credits for diesel engine models, as they are considered safer and less flammable.

Assessing the true value of a boat in today’s market is also important. Boats are getting faster, lighter and more technologically advanced, determining which features contribute to increased costs for repairs and replacement will also impact insurance premiums. Replacement value is also affected by improvements in equipment, navigational gear and rigging. You should make sure you communicate any improvements or upgrades to your broker so that these changes are reflected in the overall replacement value.

When it comes to what is covered in a watercraft policy, you should be aware of restrictions such as limits on lay-up warranty, mechanical breakdown, and navigational limitations—especially if you plan on boating south out of Canada in the coming months. Perils, such as hurricanes, as well as extended navigational limits, need to be covered but are not commonly addressed by Canadian carriers. Finally, the market value of watercrafts can fluctuate significantly with economic conditions, exchange rates, and the nature of marine risks in general. Understanding a boat’s changing fair market value and its changing relationship to the cost of repairs and replacement can be a challenge. Open communication with your broker is essential and can provide genuine peace of mind, no matter how rough the seas may become.

This article was originally published on capitalmagazine.ca.