For a number of insured people, the summer season is all about taking their boat out on the water. However, the good weather and boating activities, such as navigation, sleeping, water skiing, wakeboarding, surfing, drinking a beer or a glass of wine, swimming, and fishing, can unfortunately result in accidents that may cause damage to your boat or to others.
We recommend that you read the 5 points below to assess the quality of your boat insurance policy.
1. AGREED VALUE AND INSURANCE CARRIED
Generally provided for newer boats, this coverage can sometimes extend over a decade. It is excellent coverage that allows you to freeze the value of your boat at the time of purchase. You and the insurer agree in advance on a fixed amount payable in the event of total loss.
2. COMPENSATION FOR PARTIAL LOSS
Waiver of depreciation in the event of partial loss is generally the first form of coverage to go by the board (to use the nautical term). This is unfortunate, however, since it is extremely important coverage. Unlike auto insurance, where you generally won’t need to spend a dime to repair your vehicle (other than the deductible), a boat accident can be very costly, even if you are insured. In fact, if your policy does not contain waiver of depreciation coverage, you will essentially be compensated based on a ratio of the remaining useful life of the damaged components of your boat, and you will therefore experience significant financial loss.
3. DRIVER ENDORSEMENTS
Let’s take the example of a boat owner who is the SOLE driver, because he wants to protect his boat. However, one day at the chalet, there are a lot of people around, and he doesn’t want to seem boring, so he lends his boat to his favourite nephew. Did he take the time to ensure that the boat was insured no matter who is at the helm? If the clause was not adequately reviewed, the insurer may refuse to pay the claim.
4. RIDERS THAT COVER THEFT
Several insurers will not insure your boat if it is on an unlocked trailer hitch. Some insurers may even require that specific brands of locks be used. Do not assume that these are obscure insurers who insure people that you don’t know. In fact, major players in the boat insurance industry have these clauses in their policies. If you are someone who sleeps easy knowing you ALWAYS lock your trailer hitch… do you also lock it when it is mounted on your pick-up? A roadside stop at McDonald’s, and your trailer and the boat can disappear—and you may not be insured!
5. THE FINE PRINT
While the “fine print” may vary from one insurer to another, several aspects of boat insurance policy language seem similar. However, when reading (or re-reading, if you are diligent) the fine print, you may find some points that need to be considered. You should then contact your insurance broker to shed light on these features, modify your policy, or change insurers. Here are some things to look out for:
Zone and period of navigation
Whether or not there is a replacement obligation in the event of total loss
General exclusions for frost and vermin
Applicable deductible in the event of total loss
When faced with the temptation to go to sea with the lowest bidder, it is important to remind yourself that a policy with the lowest bidder will likely not give you the best coverage. Contact your Lareau broker so it will be smooth sailing from here on out when it comes to your boat insurance policy!
I almost forgot! Here is a nautical nod to the Charbonneau commission: