Boat & Personal Watercraft Insurance: The importance of being insured with the right Insurer

If you have ever been to a boat show, you would be as amazed as I am at the sheer level of technology out there for watercraft. Gone are the days of the rickety old trowler. When last I went to the boat show (last year) there was technology so sophisticated that even the dinghy’s were more advanced than the Apollo moon lander! As people become more well off, they are starting to turn from the typical cottage route and trading that in for a floating palace. This is a great thing for them (I plan on being one of them as well), but what they should be aware of is that personal watercraft insurance should be taken seriously since the costs for a claim can jump to unbelievable numbers!

As the insurance market continues on its softened course (i blame brokers – but that is another discussion), many insurers are deciding to dabble in different segments of the market – but only up to a certain point. Most won’t touch a boat that can go as fast as 65 mph – and those that do insure your boat, probably don’t know that it can go that fast!

Properly handling the insurance for your watercraft is often best left in the hands of experts. As your broker partner, we are supposed to know the right markets to match up your insurance needs to – this especially applies to the watercraft world.

When you deal with an insurance company for watercraft insurance, you want the piece of mind that in the event of a claim, you are going to get a person who knows about boats, who can speak the language (or at the very least be able to tell the difference between port and starboard – at least we hope you know it too)!

The key issue with the watercraft policy is that it is usually broader in scope than your homeowners policy. Coverage can included agreed upon value settlement in lieu or Actual Cash Value, Liability coverage that included damage to other people’s docks, premium reduction periods – that compensate for the seasons that the boats are moored at the dock (or marina). As the manufacturers construct bigger, faster and more sophisticated boats, it becomes increasingly significant to get the right people working for you so that you don’t end up paying for an insurance policy that would never act at claim time.

Finally the issue of use is starting to come into play for the personal watercraft owner. While reading an article on the subject in the Canadian Insurance magazine’s January 2008 issue, I read that Transport Canada is considering changes to how the passengers riding in the boats are classified (personal guest vs clients).

If I, as an insurance broker, take a client out on the lake to go to some port up the shore to visit one of their properties – the boat would have to be re-classified as a commercial watercraft – negating my current personal watercraft policy.

While this type of legislation is still a ways off, it is best to start digging into it and to be informed. As the owners of watercraft you have invested a significant amount of money into your boat -make sure you team up with the right people to protect that asset for now and for 10 years from now.

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