MARINE INSURANCE: FINDING THE RIGHT POLICY
FINDING THE RIGHT POLICY FOR YOUR BOAT
Having an iron-clad marine insurance policy for your boat not only offers the best replacement cost, optimal liability, and coverage for accidents, but it will give you peace of mind when cruising any waterway in BC - including the Okanagan. But boating accidents can happen in the blink of an eye anywhere and knowing that you have all the necessary coverage results in a smoother, easier process when it comes to making a big claim.
“Boat insurance policies are very black and white,” says Sean Thompson, president of Dolphin Insurance Services, a specialized marine broker based in Burnaby, BC, which insures more than 6,000 boats across North America, Europe, the Caribbean, and South Pacific. “Where the problems start is when boaters don’t read the policy or understand the type of coverage they have. So, there’s a chance of a sudden shock when they learn they are not covered during a big claim.”
All of Dolphin Insurance’s marine policies offer the basic coverage to include comprehensive, bodily injury, property damage, theft, and collision liabilities. But, it’s always worthwhile to resort to a specialized marine broker that comprehends the industry and the value of new/ pre-owned boat models as there are a variety of coverage options and policies available.
Thompson explained that many boaters don't realize their current policy may entail what is called Actual Cash Value policy, which means depreciation applies to boats more than 15 years or older in the event of a loss (both a partial and total loss). For example, if a boat policy has a stated replacement value of $30,000 at the time it was insured, once it passes ‘the 15-year mark’ its replacement value (in the event a large claim is required) may decrease to $25,000 or $20,000, thus resulting in a loss for what it was originally insured for.
“A good broker specializing in the marine market will advise clients of these stipulations as well as the best policy for their boat,” says Thompson. “If a broker only insures 20 or 30 boats a year, they may not have the expertise to find an ideal underwriter that can offer the best option. We don’t typically sell cash value policies as we are aware of which underwriter is the best to cover our client’s boats and meet their needs.”
In the event a cash-replacement policy is understood by the boater, it’s always best to document any interior upgrades, new modifications, and have the boat assessed by a professional marine surveyor to provide proof of value and the fact that it’s worth the predetermined stated replacement cost. Although marine surveys are mandatory for any pre-owned recreational boat, they are usually valid from five to seven years depending on the model year.
What is also offered for boaters is a Replacement Cost policy, which doesn’t charge depreciation in the event of a partial loss or total loss. You receive new parts to replace the old damaged parts, with no depreciation and the policy will pay the stated vessel limit shown in the event of a total loss.
“Most policies nowadays are All-Risk policies,” says Thompson. “This means everything is covered with the exception of wear and tear, gradual deterioration, and/or corrosion over time. So, if someone doesn’t maintain their boat and something happens, and the boat is beyond repair, full coverage will not be available.”
One other feature available within a policy is what is called a Guaranteed Replacement Cost (GRC). According to Thompson, in a case where a newer boat gets stolen or is severely damaged and a covered loss is required, the replacement cost will be covered even if the amount is greater than the cost of physical damage.
There’s no doubt marine insurance is another added expense, but it can be a valuable purchase that will protect your asset when the unexpected occurs. Therefore, it’s always wise to get the best policy you can afford through an experienced marine insurance broker.