Apr 8, 2021

Guest Column InsuranceInsurance may not be exciting but it is important. Check at launch.

We all know we need to spend some time working on getting the boat ready for launch. But What about your Marine Insurance Policy? 

For many boaters getting a new copy of the insurance policy in the mail means we have a bill to pay, and once we pay the bill we file the paperwork away for another year.  This spring, I suggest you dig out the watercraft insurance policy and take a closer look to make sure you understand what you are paying for and how your policy will respond to a loss.

Do you know that most marine insurance policies will have a lay up period? This is a time every year when your boat must be secured for winter storage, and the mechanical systems are to be winterized to prevent freezing damage. The dates can very from company to company. Check your policy to make sure you are not jumping the gun and putting the boat in the water before the your in-water policy coverage has started. 

Over the course of a boating season you could make some changes to your boat. You may have forgotten to notify your insurance company, after you changed out the motor, updated or added new electronics, replaced outdated canvas, added a new tender. All these changes could result in the need to update your insurance company to change insured value of the watercraft.  Your policy has a limit of coverage if you have added new value but failed to notify the insurance company you might be underinsured, if a loss occurred you may it be covered.
 
What’s the difference?

Another common point of confusion for boaters is the type of insurance policies that they have.  Agreed Value policy or an Actual Cash Value policy.   What is the difference?  Quite simply it is the application of depreciation to settle your claim. If you have an Actual Cash value policy, should a claim occur resulting in the total or partial loss of the insured watercraft, depreciation will be applied to the settlement of the loss, as well as any deductible. The insurance company will calculate the depreciation to be applied by considering the condition of the watercraft immediately prior to the damage, it’s resale value, and the normal life expectancy. 

With an Agreed Value policy, the limit of coverage is established in advance. If a loss occurs there is no depreciation.  Understanding the type of coverage, you have purchased can ensure that you are not disappointed with the settlement offer from your insurance company.

Every insurance policy has terms and conditions that you, the policy holder, must meet in order for the policy to respond to a loss. Taking the time to read and understand your policy can insure you will not have an insurance claim denied. 

Safety pays in many ways

Another common policy condition that is found in a marine insurance policy is having all the required safety equipment on your boat.  If you failed to have all the required safety equipment, if the equipment was not in working order and you have a loss you may have contravened a policy condition and the insurance company can deny coverage.

Territorial limitations, does your marine insurance policy outline where you can and cannot use your boat.  Does your insurance policy limit how far south or how far north you can travel with you boat?  Does your marine insurance policy allow you to navigation the ocean if so, how far off shore can you travel? If you exceed the policy limitations what happens to your insurance coverage.

These are just a few examples if issues that can come up if you were not familiar with how your insurance policy will respond to a claim.  Contract your insurance provider today if you have questions about your insurance coverage.
 
Jared Chartrand

Northstar Marine Insurance  Inc.

Barrie, ON

Jared Chartrand is a marine insurance specialist with 23 years experience as a broker.

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