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Boats are the new cottages, according to one insurance provider who has noticed an uptick in people investing in water vessels like cabin cruisers, rather than being burdened with another mortgage.
“It’s an alternative to buying cottages, which are getting more and more expensive, so they buy a boat where they can stay overnight and cruise a little bit,” said Bernie Cissek, chairman of Eagle Underwriting Group. “They don’t cruise that much – they park it somewhere and have a good day out with their friends. It seems like that is a new trend.”
Jumping on board with this segment of the marine insurance market could yield new pipelines for brokers beyond just boats because a client who has one likely also owns other valuables that require insurance.
“The advantage of getting in private pleasure-craft boating insurance is that people who have boats sometimes have aircrafts, they’ll have cottages, they’ll have fine art collections and they might be business owners. They have other ‘toys’ that have to be insured so it opens another avenue of income for the insurance broker if they get into boating,” said Cissek.
Just like a rookie swimmer wouldn’t jump into the water without a lifejacket, brokers new to the boating game should get some support from underwriters.
“The policies are totally different than auto policies, for example,” said Cissek. “The private pleasure insurance is under what we call the Marine Insurance Act. It’s the federal act in Canada so it relates to something totally different than you have in homeowners or auto. We give classes to our brokers, which gives RIBO credits on yacht insurance, so brokers should go to their underwriter if they’re new to this.”
It’s important for brokers to speak with their insureds each season and find out if they’ve added anything to the boat, especially because many owners are installing new electronics that increase the value of their water toys, added Cissek.
Weather considerations should also be on the radar of boat owners and their insurers.
“Water levels always change,” said Cissek. “We used to have very low water on the Great Lakes and that caused a lot of people hitting submerged objects. Even today, if you go into the Muskokas, one year the water is lower than the year before. They go into a bay and all of a sudden they hit a rock that wasn’t there before because the water is lower, so you have a claim.”
And one low-water period can cause a ripple-effect for next year’s boating season.
“I think probably this year we’re going to have high water,” said Cissek. “When you have low water, a lot of the powerboats, or even the sailboats, hit rocks and things like that, and obviously you have claims, so then you see an increase in claims, and that brings up the deductibles in subsequent years – not much, but it does have an effect.”
