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Factors Impacting Insurance Costs for Boats and Other Watercrafts

Suppose you are considering buying a boat in Edmonton or the surrounding Alberta areas. In that case, it is critical to purchase the boat insurance you need to protect yourself adequately, your passengers, and the boat. 

There are many different things you need to take into consideration when it comes to purchasing a boat. Not only do you have to factor in cost and maintenance, but you also have to think about storage, emergency towing, navigation equipment, and more. Luckily, boat insurance covers a lot of these things. Read on to learn more.

Here’s What You Need to Know About Boat Insurance

Owning and operating a boat can be enjoyable and bring serious liabilities that you should consider and protect yourself against. 

If you are financing the boat, your lender will likely require you to insure your boat, as the insurance protects the lender’s investment just like a mortgage requires that you purchase property insurance for your home. Therefore, to evaluate the boat’s value and the risks involved from the insurer’s perspective, you will need to provide certain information. Here are the key factors that affect the costs of boat insurance.


Personal Information

Information about you as an operator of watercraft, including your:

  • Age;
  • Marital status;
  • Licence obtained;
  • Number of years operating a boat;
  • Types of boats driven;
  • Driving record (e.g., any driving tickets in the past three years)
  • Any prior boat insurance, previous claims, and any prior refusal or cancellation of boat insurance;
  • Boat courses taken.


Boat or Other Watercraft Information

  • Watercraft type, size, year made, make, model, passenger capacity;
  • Motor type (e.g., outboard vs. inboard), horsepower, date of manufacture, make, model;
  • Fuel type (e.g., diesel-powered engines); and
  • Safety Equipment (e.g., automatic fire extinguisher system, EPIRBS, GPS, Depth Finders, Radar).



  • Recreational use or business/commercial use too;
  • Expected number of regular passengers;
  • Towing of wakeboarders, water skiers, or tubers 
  • If special equipment such as downriggers or electronic equipment will be on board;
  • If you need emergency towing service 
  • If a trailer will transport the watercraft (if so, you must provide information on trailer use such as the year, make and model of the trailer, years operated, years owned, trailer distance regularly travelled, and if trailer insurance was ever cancelled or refused);
  • The nature of the waterways used (e.g., inland boaters vs. coastal exposure) and
  • Navigation limits (i.e., boating distance travelled).

What are the Different Types of Boat Insurance?

Boat insurance covers injury to other people, damage to property, loss or damage of personal property on your boat, damage to your boat from an accident, and more. There are many different types of coverage for boat insurance, ranging from insurance that only covers injuries to a third party to coverage for almost any kind of possible loss. Here are the different types of boat insurance:



Liability coverage is the minimum type of coverage you can have. It protects you if there is damage to someone’s property or if someone suffers an injury. Liability pays for the person’s medical expenses, property repairs, and legal fees.


All Risk

All risk coverage protects your boat from accidents, theft, and fire. In addition, it protects your boat from any type of risk except for circumstances that your policy excludes explicitly (i.e., wear and tear).



There are many different types of add ons you can add to your insurance policy to suit your specific needs, including:

  • Security equipment
  • Communication equipment
  • Navigation equipment
  • Emergency towing
  • Protection and indemnity (accidental damage, wreck removal, etc.)
  • uninsured/underinsured boater coverage
  • Agreed value coverage
  • Navigational coverage
  • Medical coverage

Boat insurance does not cover certain types of damage, including depreciation, wear and tear, willful misconduct, and more. 


What About Storage?

Where you store the boat when it is not in use may impact insurance costs. For example, your insurance cost may be higher if you keep your watercraft outside in the open at your cottage or home, where it is susceptible to vermin damage. 

If you store your watercraft at a marina, then you may require marine insurance. Also, if you cancel your watercraft insurance for the season when it is not in use, then your insurance cost will likely be higher when you renew.



Most insurance companies offer some discounts when risks are lower, including discounts for:

  • Lower speed vessels
  • Additional safety equipment
  • Outboard motors
  • Newer boats

You may also receive lower rates based on the following factors:

  • Completion of boaters’ courses and levels
  • Previous years of boating experience
  • Previous boats owned
  • Current boat insurance
  • No prior claims
  • A Clean driving record
  • Age
  • Marital status
  • Homeownership.

Insurance Policy Terms and Conditions

As part of taking out a boat or yacht insurance policy, you will need to follow any warranty clauses outlined. 

For example, a private pleasure warranty states that you must not use the boat for commercial purposes, or else hiring the boat for charters invalidates your policy. Some insurance companies enable you to add temporary charter coverage for an additional premium, though you need a commercial policy if you charter the boat regularly.

Another warranty example includes an extinguisher warranty, which states the boat owner must comply with applicable regulations regarding fire extinguishers on board. Warranties are crucial because when breached, the policy becomes null and void from the moment the breach occurs. In addition to the above, warranties address conditions such as winter lay-up and navigation area limits. 

It is essential to understand the warranties in your policy and to adhere to them at all times. You will also need to follow the restrictions on how far you can travel from your home dock or lake area for your insurance coverage to apply. 

You may require extra insurance for any long-range trips with your watercraft. Your policy may also limit coverage within a specified radius for land travel, which is vital to know if you are hauling your boat a long distance on a trailer.


Boat Insurance Cost

Fortunately, boat insurance is pretty affordable. Depending on the type of policy you have, you can pay as low as a few hundred dollars a year. The costs start to go up when you add more features to your policy. It is in your best interest, though, to pay extra to ensure that you have protection in any type of event or accident. It’s always better to be safe than sorry.

Speak to the Edmonton Auto Insurance Brokers at MBS Insurance to Find Affordable Boat Insurance

At MBS Insurance Brokers Ltd. in Edmonton, we can locate a comprehensive, affordable insurance policy for your boat or other watercraft. We can arrange all of your recreational insurance needs and provide home, auto, and commercial insurance. In addition, we can ensure that the insurance policy you purchase suits how you will use your boat and where and when you operate it. We are insurance brokers with access to a wide range of insurers offering specialized coverage in Edmonton for your recreational insurance needs. Contact us to obtain a free boat insurance quote or to speak to one of our insurance agents in Edmonton for more information.

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This article was originally published on June 22, 2015, and updated for 2021.