Frequently Asked Questions
Here are some of the frequently asked questions about Marine Insurance (FAQ):
Why use an insurance broker?
What is the difference between Agreed Value Policies and Actual Cash Value policies?
What is covered in my policy?
Am I covered for everything with Agreed Value Policies?
How can I reduce my hull premium?
Why and when are surveys required?
What happens in a claim?
What is the difference between Vessel Licensing and Vessel Registration?
What are the Minimum Safety equipment requirements for my vessel?
Answers
An insurance broker works for you. They "Shop the Market" to obtain insurance coverage options from various Underwriters and present them to you in a clear manner. Your broker will take all the relevant information from you that is required to provide Underwriters with a clear indication of the risk, and will forward their terms on to you for your consideration. Your broker will discuss the coverage and limits on the policy with you, in language you can understand. Your insurance broker is always there for you to help answer any questions you may have during the initial quote phase and throughout your policy term.
What is the difference between Agreed Value Policies and Actual Cash Value policies?
The main difference between the two coverage options is how a claim is settled following a loss. With Agreed Value Policy coverage, the amount paid following a total loss is the amount shown on your Declaration page, with no charge for depreciation. Partial loss claims are settled on a new-for-old basis, so the replacement parts would be of new quality, replacing the necessary damaged parts with no additional charge to you. Actual Cash Value policies are settled on a depreciated basis, determining the settled amount given the value of the vessel and/or the damaged item at the time of the loss.
All our policies provide coverage for All Risks hull and machinery damage (including fire, theft and vandalism & sinking) and Protection and Indemnity liability claims that arise from the use, ownership and operation of your watercraft. Underwriters also offer additional coverage for — Personal Effects, Towing, Loss of Use, Accidental Pollution discharge, Salvage and Recovery, Wreck Removal and your tender and outboard — all at lower deductibles.
Am I covered for everything with Agreed Value Policies?
This coverage is the finest policy available; however, there are certain exclusions that are not covered under these wordings. Typical broad exclusions include dishonest, intentional and illegal acts as well as fraud, seizures, government action, wars, and nuclear radiation. The marine exclusions include lack of maintenance, freezing, wear-and-tear, **mechanical breakdown, incidental damage (such as marring, denting, scratching, weathering, blistering, osmosis), mysterious disappearance**, deterioration, rust/corrosion, delamination, electrolysis, or design/latent defects. We recommend to all our clients that you take time to read through your policy, and we can provide answers to any questions you may have regarding exclusions.
**some companies do cover these losses
How can I reduce my hull premium?
There are a number of credits/discounts available to reduce your premiums. When initially getting quotes for you, your broker will ask you a variety of questions regarding your vessel ownership experience, marine education & any past losses in order to apply any applicable discounts available. Cost-saving items include increasing the deductible, limiting navigation, additional boating safety courses, & Canadian Power Squadron courses/membership. Insurance companies are also now giving a discount for moored vessel which have installed the new "Smart Plug" Shore power cords (www.smartplug.com)
Why and when are surveys required?
Surveys are usually required on vessel once they reach a certain age (15-20 years depending on the insurance company). Surveys provide the Underwriters with a clear indication of the current condition and market value of the vessel and identify any structural, mechanical or safety deficiencies/problems that should be addressed by the owner. An independent marine surveyor works on your behalf to identify and suggest solutions to keep your vessel in top seaworthy condition. Surveying a vessel is a standard practice for the used boat buyer, and is mandatory for older vessels. Most Underwriters require a marine survey to be done every five years.
If there is a loss to your vessel you must contact your broker as promptly as possible. We will take down the primary details in order to inform Underwriters of the damage. Underwriters will assign an adjuster, who will contact you and help begin the process of settling your claim promptly. Remember, you are responsible to obtain repair estimates and to choose where you wish the vessel to be repaired. The repairs are completed to YOUR satisfaction, under your direction and control, not the insurance company’s. The adjuster is there to represent Underwriters, but also to help and assist you with any concerns you may have regarding the repairs. By working closely with your adjuster, your claim should completed quick and easy.
What is the difference between Vessel Licensing and Vessel Registration?
A vessel licence is a "BC" number (BC123456) or an older "K" number (13K12345) that is assigned to Pleasure Crafts, which MUST BE displayed on the Hull (usually on both sides of the bow). The Small Vessel Regulations under the Canada Shipping Act, 2001, require all pleasure craft powered by an engine 10 horsepower (7.5 kW) or more to have a pleasure craft licence. There is no cost for vessel licencing.
These numbers are for use by local authorities for the purpose of identifying vessels in the event of emergency or lost/stolen vessels.
** Vessel licence is NOT proof of ownership ** (a Bill of Sale is proof of ownership)
Vessel registration is required on all commercial vessels and can be obtained by Pleasure craft owners. Although there are costs involved, registering your vessel gives you some important benefits such as:
- Proof of ownership (legal title)
- The right to fly Canadian Flag
- Official number & naming of your vessel
- The right to use your vessel as security for a marine mortgage
**It is recommended that pleasure vessels be registered if they are to be used frequently outside Canadian waters.**
What are the Minimum Safety equipment requirements for my vessel?
The minimum safety equipment requirements by boat type & length are listed in your Safe Boating Guide:
http://www.tc.gc.ca/publications/en/tp511/pdf/hr/tp511e.pdf