Summer in Canada means one thing for boaters: time on the water. Whether you're cruising a quiet lake, casting a line, or towing the kids around on a tube, your boat is a big part of your summer memories. But before you set sail, there's something important to check off your list: making sure your boat is properly insured.
While many people assume their home insurance will cover their watercraft, that protection often comes with limits. Here's what you need to know about boat insurance in Canada - including what it covers, when you need it, and how to protect your boat both in and out of the water.
Is Your Boat Covered Under Your Home Insurance? Probably Not Fully.
In Canada, most home insurance policies offer very limited coverage for watercraft; they often cap watercraft at $2,000-$4,000 for the boat & gear, and liability coverage is often excluded unless the engine size is very small.
If you own a canoe, kayak, or other small, non-motorized watercraft, your home policy might be enough. However, home policies only extend liability to boats with outboards < 25 hp or other motors < 50 hp; anything larger needs a stand-alone policy.
What Does Boat Insurance Cover?
A standard Canadian boat insurance policy typically includes:
- Liability coverage – Protects you financially if you're responsible for injury or property damage while operating your boat.
- Physical damage coverage – Covers repairs or replacement if your boat is damaged by fire, lightning, vandalism, theft, or collision.
- Onboard equipment – Can include permanently installed equipment like electronics, anchors, motors, and safety gear.
Most policies also extend coverage to anyone you allow to operate your boat — an important feature for families or shared users.
What’s Not Covered? (And Why It Matters)
While boat insurance is essential, it's not a catch-all. Here's what most policies don’t cover:
- Normal wear and tear
- Defective machinery or failure due to lack of maintenance
- Freezing or ice damage, particularly if the boat wasn’t professionally winterized (a requirement with many insurers)
- Damage from wildlife, such as zebra mussels or rodents
- Mold or mildew
Understanding these exclusions helps you prepare and maintain your boat responsibly and can avoid surprises during a claim.
Lay-Up Coverage: Protecting Your Boat in the Off-Season
Think your boat is safe just because it’s out of the water? Think again.
Even in storage, your boat is still at risk - from fire, theft, vandalism, and weather damage. That's where lay-up coverage comes in. A lay-up policy allows you to pause certain coverages (like collision) during the off-season while keeping protection for storage-related risks.
Just remember: if you use your boat outside the lay-up period (even for one day), you may not be covered for any resulting losses.
Key Questions to Ask When Buying Boat Insurance
Every policy has its fine print. Before signing anything, talk to your broker about the following:
Navigational Limits
Are you restricted to certain waterways? Many policies limit use to Canadian freshwater lakes and rivers. If you plan to boat in the U.S. or along coastal waters, you may need an add-on to extend your coverage area.
Marine Inspections
Some insurers require a marine survey, especially for older or higher-value boats. Even if it’s not mandatory, a survey can help determine your boat’s true value - and make sure you’re not over- or under-insured.
Underage Operators
Each province has rules around boating licenses and age requirements. In Ontario, for example, youth under 16 face horsepower restrictions. Check whether your policy allows younger operators and whether you're covered if they’re at the helm.
Equipment Coverage
Most policies include standard equipment, but it’s worth confirming the list. Items like trolling motors, electronics, life jackets, seat cushions, and even fishing gear may require additional coverage, especially if they’re high value.
Claims and Policy Payouts
Another important conversation to have with your broker is about how claims are settled. Policies may pay based on Actual Cash Value (ACV) or on an Agreed Value (also called “stated value”). While ACV claims are paid on replacement cost, minus depreciation, Agreed amount claims are paid based on a valuation you and your insurance company agree to at the time the policy starts. If you want more predictable coverage, an Agreed Value policy may offer greater peace of mind, though it may cost a bit more in premiums. Adjusting your deductible can help balance costs if needed.
How to Save on Boat Insurance
Boat insurance doesn’t have to sink your summer budget. Ask your broker about these potential discounts:
- Bundling your boat policy with home or auto insurance
- A clean boating and driving record
- Taking a certified boating safety course
- Installing safety equipment like fire extinguishers or GPS
Boat insurance is a year-round concern, not just a summertime checklist item. Whether you're enjoying the open water or storing your boat for winter, make sure you’ve got the right protection in place.
Your best next step? Talk to your insurance broker. They can walk you through your options, explain what coverage you really need, and help you save where it makes sense.