Even if your record is spotless, you might not be safe from an insurance premium hike. Sometimes premiums go up for reasons that have nothing to do with your actions. Let’s take a closer look.
Insurance premiums are calculated based on certain criteria about the insured:
- Their experience
- Their past claims
- The age and category of their boat (size, type of motor, condition, value)
Other outside factors stemming from the insurer’s decisions or unforeseen events can affect premiums:
Higher repair costs
Since 2015 and especially since COVID–19, repair costs billed by contractors and repair times have gone up an estimated 25% to 30%. More parts are being replaced instead of repaired. Additionally, the age of a boat can lead to other major expenses for the insurer. Parts for older boats are more expensive and harder to ﬁnd. Older vessels are also more vulnerable to mechanical trouble, which means more claims. Modern boats, with their cutting-edge technology and higher building standards, are not immune to high costs either.
Increase in the number of claims
Because of COVID–19, many Canadians could not travel, so they decided to spend their vacation on the water. This considerable increase in the number of pleasure boaters brought its share of challenges—the total number of claims also increased (+20%), very often due to a lack of boating experience.
There’s no way around it: Canada is being affected by climate change. 2018 was a bad year for insurers, who paid out roughly two billion dollars, making it the fourth-most-expensive year in history for weather-related claims. Finally, the water level has been extremely low for the past two years, increasing the risk of bottoming out.
Inﬂation may also impact the cost of your insurance policy. This phenomenon leads to a widespread, lasting increase in the cost of the goods we consume and the services we use.