Atypical Assets
Premier
Pleasure
Crafts
The right coverage is the difference
between rough seas and smooth sailing
When the warmer weather blows in, many
of your affluent clients start making seasonal lifestyle
adjustments, such as regular visits to cottages and excursions
on their watercrafts.
Whether their pleasure crafts are powered by engines
or propelled by wind, an increasing number of wealthy
Canadians are discovering the joy of boat ownership—
leading Canada’s recreational boating industry to experience
exponential growth.
According to the latest statistics from the National Marine
Manufacturers Association (NMMA), there are more than
four million recreational boats in Canada, with about 4,000
companies providing goods and services to boat owners.
From sailboats to cabin cruisers to antique wooden boats,
enthusiasts can choose from an array of high-performance,
ultra-luxe pleasure crafts made by a range of manufacturers
both in Canada and the U.S. The average price of a multiperson power craft is around $36,000. For those with no
shortage of funds, however, the price tags of some of these
toys could easily be north of $100,000. And, as these
boaters can attest, the purchase price tag is just the first of
many costs associated with owning such a valuable asset.
Stay afloat with comprehensive coverage
in numbers
$2 billion total retail sales of
new boats in Canada
$935 million total sales of used boats in Canada
4.3 million boats owned by Canadians
15 million Canadians went boating last year
45% Canadians participate in boating
Source: 2012 Canadian statistical data from the National Marine
Manufacturers Association (NMMA).
From title and registration to fuel and dockage fees, and from
safety equipment to winter storage, a pleasure craft is not
a buy-it-and-forget-it investment.
Comprehensive insurance coverage, therefore, becomes a
meaningful expense necessary for keeping these crafts safe,
seaworthy and secured against unexpected incidents. Whereas
a basic homeowner’s policy could fall far short of what is
adequate, boat insurance is like having a life jacket: you’re
always glad you have it, especially when you need it.
Therein lies a business-building opportunity for brokers to
steer the conversation from a standard homeowner’s policy to
specialized coverage—a safeguard for precious assets. With the
right leisure and lifestyle insurance solution, brokers can ensure
their high-spending clients have a comprehensive risk management tool that lets them enjoy their lifestyle uninterrupted.
According to the World Wealth Report 2013 coproduced by
Capgemini and RBC Wealth Management, the population
of Canada’s high net worth individuals was pushing 300,000
special interest feature
Tips to protect your
boat from theft
•Lock and secure it to the dock with a steel cable
•Remove expensive equipment when not in use
• Chain and lock detachable motors to the boat
• Do not leave title or registration papers in the craft
•Disable the boat by shutting fuel lines or removing batteries
•Use a trailer hitch lock after parking a boat on its trailer
•Install a kill switch in the ignition system
Source: U.S.-based National Insurance Crime Bureau.
in 2012. The Guarantee also researched this affluent group
and its need to protect high-value assets. The company’s
GUARANTEE GOLD® insurance products provide coverage
for homes, cottages and other secondary residences, contents,
personal liability, automobiles and recreational equipment.
Offered through the program is PleasureCraft, which
provides exclusive coverage designed to let boat enthusiasts
enjoy the thrill of owning a watercraft without worrying about
the attendant risks. The specialized program covers both
owned and borrowed watercrafts, and provides some of the
widest navigational zones in the industry, wading boldly into
areas of protection where standard policies wouldn’t venture.
Moreover, coverage extends to both man and the machine.
This means not only are the boat and its contents covered,
but also all of the occupants who may sustain physical injury
in the event of an accident are protected. The policy provides
coverage of up to $30,000 for on-board personal effects for
owners, guests and crew.
Give trouble a wide berth
In the event of a mechanical breakdown, policies that address
unexpected delays can make a real difference. A PleasureCraft
special interest feature
policy covers any breakdown resulting from fire, sinking,
collision and stranding, among other causes.
Furthermore, if the watercraft or trailer becomes disabled,
coverage takes care of the cost of towing to the nearest marina,
delivery of fuel or repairs done at the site of breakdown—a
value that can help differentiate you from other brokers when
serving high net worth clients.
Should repair work trigger unexpected costs, the program
provides up to $1,500 of additional living expenses during the
repair or replacement process. As well, the issuer will reimburse
a rental cost of up to $1,500 per occurrence, and it will even
take care of the deductible.
Your clients may also appreciate the “green coverage”
component of the policy, which offers to pay up to $10,000
for damages the vessel owner may be legally obligated to pay
for any marine environmental damage.
By encouraging policyholders to take risk mitigation steps, the
program fills some safety gaps that other policies may not plug.
To that effect, the program will reward or reimburse the steps a
client takes to reduce the severity of a claim or avoid it altogether.
Keep liabilities at bay
Another benefit for clients is they are protected from those
who haven’t protected themselves. Brokers can highlight the
peace-of-mind proposition of the PleasureCraft policy that offers
up to $1,000,000 in damages for bodily injury sustained from a
boating accident with an uninsured or underinsured boater.
Even the most affluent boaters are not immune to crime.
According to the Stolen Boats Canada website, rarely a month
goes by that a boat theft incident isn’t reported. To help
watercraft owners tide over such a contingency, the guaranteed
replacement cost feature of the policy provides clients with
another layer of security. It covers both new and antique watercraft if they suffer a total loss, either due to damage or theft.
Brokers armed with this offering can also protect clients
who love to take water vehicles out for a spin without the
commitment of ownership. Clients are insured for up to
$50,000 when they are exposed to legal damages arising out
of their use of a watercraft not owned or leased by them.
Cast your security net wide
Aside from the costs of repairs and replacement, there are other
significant client considerations that policy features can help
brokers address. These features include wreck removal, which
covers up to 100% of the cost of wreckage removal if legally
required to do so, and search and rescue, which pays the policyholder up to $10,000 for search and rescue operation expenses.
And although many of your clients may be forced to dry
dock their boats during peak winter months, clients can be
reassured that they can enjoy boating pleasure year-round.
The policy doesn’t require a lay-up period, the period of time
during which the vessel is not in use.
Pleasure crafts are a big-ticket purchase with a unique set of
risks and the benefits of a lifestyle worth investing in. Brokers
can offer their clients a reliable assurance of smooth sailing
with specialized insurance coverage.