Summer's Here! Are You a Cottage or Boat Owner? Things You Need to Know About Your Insurance!

Cottage on lake with colourful trees

Insurance is one of those necessary things in life. No one really wants to pay for it, but you’ll be very happy to have that protection when disaster strikes. With the arrival of warm weather, cottage and boat owners need to know a few things about their insurance to ensure they’re receiving the coverage they need.

What You Need to Know About Cottage Insurance

Protecting your cottage is essential. Not only is it a place for relaxation and enjoyment, time with family and peace from the stresses of the everyday world, but it’s an investment. However, without the right protection, your investment is at risk. Cottage insurance is the most important thing to consider here.

What’s Covered

It’s vital that you know what your cottage insurance policy covers. There are some pretty basic items that you’ll no doubt be aware of, but there might be a few things that surprise you, and some exclusions that may shock you.

First, most homeowner’s insurance policies cover damage from pipes bursting and appliance failure. Hail and wind damage to homes are also usually covered, including damage caused by flying debris, tree branches, falling trees and the like (verify this coverage on your specific policy, though). If you’ve invested in all-perils coverage or comprehensive coverage, even your vehicles should be covered in the event of wind, water or hail damage. With that being said, this isn’t a mandatory type of coverage, so you’ll need to double-check your policy.

What’s Not Covered

Cottage owners are often surprised by the things that are not covered by their insurance policy. These include things like damage due to sewage backup into the cottage (you must have specific sewer coverage – it’s not part of standard insurance policies). If freezing causes water to back up or escape, this is likely not covered, either.

Perhaps the most startling item not covered for your cottage is flood damage. Overland flooding that causes water to enter a home is a vital consideration, and you’ll need to purchase overland water coverage (if available) separately. This type of insurance just became available for Ontario residents through a number of markets, and it’s a good thing. Today, there are 20% more storms and floods than there were just 20 years ago. Between 1970 and 2013, there were 208 disasters that required federal funding, and more than half of those involved overland water flooding.

As of June 1, 2015, overland flood water protection is available for homeowners in Ontario. However, note that, like any insurance coverage, limitations apply for the extent of coverage and the geographic regions it’s available.

Boat Insurance 101

Boating is an incredibly popular activity throughout Ontario during the summer months. With some of the most extensive waterways in Canada, millions of people take to the lake, rivers and reservoirs to enjoy some time in the sun. Chances are good that you take precautions while you’re out on the water – sunscreen, life vests and the like. However, you might not be protecting your boat in the right way. Boating insurance is a crucial consideration. There are several things you need to know about boating insurance in Ontario. While Canada does not require you to carry boat insurance, it’s a smart move, for many different reasons.

Small Watercraft

Many people assume that boat insurance is only for larger watercraft, but the fact remains that smaller boats, such as paddleboats, canoes and kayaks, can be included in your homeowner’s insurance (and often, free of charge). Note that these cannot be motorized, and you’ll need to speak with a broker about liability limits and restrictions on the type and size of watercraft.

Motorized Watercraft

For motorized boats and personal watercraft (Jet-Skis, for instance), insurance is a very smart buy. You’ll find that the majority of insurance policies available cover not just the boat, but also associated equipment and systems, including the motor, GPS systems, and even the trailer itself. Having insurance on your boat ensures that you’re protected against liability in the case that a passenger aboard the boat, a skier or a tuber is injured. Damage to the boat and theft are also covered, as is damage caused by your boat to someone else’s property.

Know The Factors That Affect Your Boat Insurance

Like all other types of insurance (homeowner’s, auto, etc.), your boat insurance is affected by many different factors. Chief among those are the size of the boat, the power of the motor and the top speed. The value of the boat is also a very significant factor, and even the location where you store the boat when it’s not in use, and the areas where you boat most frequently will have an impact on your costs. There is no one-size-fits-all policy here, and you’ll need to work with your broker to ensure that you’re getting the right amount of coverage for your specific situation and needs.

Protection & Indemnity

Not all liability coverage is created equal when it comes to boat insurance. So if you think that adding your watercraft to your homeowners policy is sufficient to protect you (and any operators) for liability, you could be very mistaken. Be sure to check the definition of “insured” under your policy. If it does not extend to cover any operator of your vessel who has your permission and who is licensed to operate a watercraft, you may find your boat is inadequately insured.

Know the Restrictions

All insurance policies come with restrictions. For instance, many homeowner’s policies don’t protect against damage from sewer backups unless you purchase additional coverage. The same is true with boat insurance. Some of the most common restrictions for Ontario boat owners include the following:

  • Land Travel Radius: Some policies will set a specific coverage radius area from your home, so pay attention to this when buying insurance, as well as when hauling your boat.
  • Distance from Home Dock/Lake: Some insurance policies will limit or even cancel coverage if you’re boating too far from your home dock or home lake, so make sure to verify this with your broker.
  • Voidance: Most boat insurance policies will be rendered null and void if you do not hold a valid Pleasure Craft Operators Card issued by the government. It is required that all boat operators carry a PCOC in order to operate a motorboat.
  • Operator Age: Your insurance policy will have specific limits about the age of the operator, as well as other related restrictions. In most instances, these are in line with Canadian boat operating regulations, but verify with your broker.

Whether you’re protecting your cottage or your boat, summer is a great deal more fun with the peace of mind offered by the right type of insurance.