The Fine Print: The legalities around buying a boat

Published: April 29, 2019

a-wakeboard-boat-at-a-wooden-dock-on-a-sunny-day Adam Melnyk/Shutterstock

Buying a cottage boat is one of the most exciting purchases you’ll make—a gateway to years of fun at the end of the dock.

When to get a survey

Sometimes there’s no choice: you may need a survey to get insurance or financing. As the buyer, you’re on the hook to pay for the survey, so if your insurer doesn’t require one, and you decide that the overall value of the boat doesn’t warrant the extra expense (about $400 for a 20-foot bowrider), at least ask that it be hauled out of the water, so that you can examine the hull, and consider having a mechanic look at the engine. “The cost of repairs nowadays is high,” says Kelly Thody of Total Boat Marine Surveyors in Sidney, B.C. “If you purchase a boat on your own, and the stringers and transom are rotten, then the cost of the repairs can quickly approach or exceed the cost of the boat.” 

The upshot: A surveyor will provide an in-depth written report on the condition of the boat. It will catalogue any repairs that are required and may include the estimated cost of repairs, which you can use as a negotiating tool in the boat purchase. Be sure to specify if you want to include an inspection of the engine and electronic equipment.

To license or not to license?

No matter where you are in the country, the licensing process is the same because it comes under federal jurisdiction. A licence, which is free, provides a unique number that you display on the bow of your boat. To get one, you’ll need three things: proof of ownership of the boat; a signed copy of a piece of government-issued ID from each owner whose name will appear on the licence; and a current side-view colour photo of the boat. Helpful information is available under “Pleasure Craft Licences: Questions and Answers” on the Transport Canada site.

Boats powered with an engine less than 10 hp—or no engine at all, such as canoes and kayaks—are exempt. Which is a bit surprising given that the reason for having a licence is so that, in an emergency situation, authorities can check an online database to find the boat’s owner. “Many owners of pleasure craft that are not required to be licensed choose to get one, for safety reasons,” according to Transport Canada’s Simon Rivet.

We can’t say that we know any boat owners who got a boat licence when they didn’t have to. But we do know numerous cottagers who have never updated their boat licences. By this spring, Transport Canada will have updated its electronic licensing system with all the 1.7 million historic pleasure craft licences—those issued prior to 2006. Of course, this is useful only if the information is still valid. Who keeps it valid? That would be you.

The upshot: Boat owners are responsible for making sure that their contact information is current, for carrying the up-to-date licence onboard, and for renewing the licence every 10 years—or face a fine of $250.

Cottage insurance vs. boat insurance

More than one cottager has had a sinking feeling when trying to get a payout on a boat that was lumped in with the furniture on their cottage policy. According to Andrew Robertson, the senior vice-president of marine programs for Arthur J. Gallagher Canada, “If you’re getting a boat for waterskiing worth more than, say, $5,000, you’re better off considering a separate policy for the boat.” In fact, if your boat is over a certain horsepower you may need such a policy, or you may even have to look for a company that specializes in marine insurance.

A separate policy will offer more coverage than you can get with a cottage policy. Several years ago, for example, during flooding in Muskoka, the tops and windshields of some boats were crushed when they hit the ceilings of their boathouses. A cottage policy would have excluded them from an overland flood, but a boat policy would have paid. Plus, if you have your boat on a cottage policy and you make a boat claim, you’ll be looking at an increase in your cottage insurance. A separate boat policy won’t affect the cottage policy.

The upshot: Ask about multi-boat discounts if your insurance company requires you to have a separate policy for each boat, and for a discount if you’ve passed a boating course. In fact, it’s a good idea to call your broker before you put any money down on a purchase. We’re not saying you won’t get insurance if you’re a 26-year-old whose first purchase is a boat that can go 80 mph, but your chances are slim if you don’t have experience or a claims history.

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