Our insurance broker, Navis Marine Insurance is on standby to answer any questions you may have regarding marine insurance coverage. They have put together some information on what to look for when shopping for marine insurance. Please feel free to contact them for a free quote.
Here are some pointers as to what to look for when shopping for boat insurance; because not all policies are created equal. This is definitely one of those times where you get what you pay for.
All policies will cover Protection & Indemnity, the marine equivalent of 3rd party liability. In Canada, the Marine Liability Act contains limitations on the amount of liability pleasurecraft owners and operators may be held accountable for. Up to $1,000,000 in bodily injury and $500,000 in property damage for a combined, worst-case total of $1,500,000 per incident, so carry at least $2,000,000. This limit is also what most marinas will require a vessel to maintain moorage.
Hull & Machinery coverage provides the protection for your physical asset and this section is where you find the greatest variation in what is, or what is not covered. In general, and almost without exception, the cheaper the policy, the less coverage there is. Some things to look for:
- Exclusions – all yacht policies are written on an “all risks” basis. Are you aware of the exclusions and exceptions where losses are not paid? Some common exclusions include damage caused by marine life or vermin, and damage that results from a worn or corroded part failing. While the failed part will not be covered, the damage that results can be covered on a comprehensive policy, and it is most often the resulting damage that is of greater consequence.
- Basis of Settlement – is depreciation applicable to a claim, thus reducing the amount you are eligible to recover? This as compared to new for old replacement.
- Resultant Damage – will your policy cover you for a loss that results from the failure of a worn or corroded part failing? Even if there was a reasonable inspection?
- Personal Effects – does your policy cover personal belongings or will you have to claim through your home insurance, leaving you to deal with a second insurer in addition to losing your claims free status on your home policy? Many policies provide Personal Effects coverage on an Actual Cash Value basis rather than new replacement.
- Warranties – has the underwriter added any warranties to the policy that restrict coverage?
- Liability Insurance – are legal fees included within your policy’s limits or above those limits?
- Contractual Liability – does the liability insurance include those liabilities arising from standard contracts such as moorage agreements?
- Additional Coverages – what “extras” are missing? Will you be out of pocket for commercial towing or diving, living expenses and/or relocation costs?
For a free quote contact Navis Marine Insurance Brokers