Insurance Glossary
Actual Cash Value
In the event of a total loss, the market value, determined by age and condition of the boat at the time of the loss. Boating industry reference materials (NADA Book, BUC Used Boat Guide, ABOS Marine black Book) are often used to determine market value. The BoatU.S. Boat Saver and PWC policies are Actual Cash Value policies.
Agreed Value
Determined and agreed upon by both owner and insurance underwriter at the time the policy is purchased. The BoatU.S. Yacht and Bass Boat policies are Agreed Value policies.
AM Best Rating
Rating assigned by the insurance institute, usually a result of factors including the company’s solvency, customer service and claims handling. BoatU.S. policies are underwritten by CNA with a Best Rating of A.
Bind
To start coverage by accepting the quotation offered and meeting the special conditions and agreeing on a date to start coverage.
Binder
Immediate, temporary coverage or proof of insurance until a policy can be issued. Usually good for a 30 day term.
Carrier
The insurance company underwriting the policy.
Catastrophe
Disaster in a specific geographic area such as hurricane’s, floods, marina fires, etc.
Catastrophe (CAT) Team
BoatU.S. team of claims adjusters, underwriters, surveyors, salvors, truckers, repairers and other specialists sent to a specific geographic area to provide on-site assistance. Dispatched in situations where a large number of policyholders have incurred losses.
Catastrophic Loss
When the loss incurred exceeds the insured value of the boat.
Claims Adjustor
Party responsible for investigating and settling a claim.
Constructive Total Loss
the cost of a boats recovery and repair exceed the insured value.
Co-Owner
A family member or partner whose name appears on the title of the boat.
Corporate Ownership
The boat is titled in the name of a corporation. Not to be confused with the bank, lien holder or builder of the boat.
Cruising Area
The geographic area or waterway where the boat is used as defined on the policy. If the boat is taken outside this cruising area, a cruising area extension is required to continue coverage.
Cruising Area Extension
Required when boat is taken outside the cruising area defined on the policy. Prior notification and approval is required by BoatU.S. and a fee will apply based on the length of the extension.
Damage Avoidance
Loss prevention, preparation that prevents or minimizes a loss. The BoatU.S. program offers education and “how to” information taken from actual claims.
Deductible
The portion of a claim to be paid out of pocket. The higher the deductible, the lower your insurance premium will be.
Depreciation
measured decrease in value of the boat, parts and equipment due to age and condition.
Hull ID
Series of letters and numbers uniquely identifying an individual boat.
Insurance Fraud
Willingly falsifying information used in the decision to underwrite an insurance policy (i.e. years of experience) or misrepresenting the facts of claim for the purposes of obtaining a settlement that would not otherwise be made.
Judgment
Legal decision determining fault or liability.
Liability
Who’s legally at fault. Liability insurance provides coverage for property damage or personal injury.
Lien holder
A person or organization providing the loan for an interest in the boat. A lien holder will also appear on the title to the boat until it is owned outright.
Loss
Physical damage or injury to person or property.
Loss Payee
The person and or institution paid in a claim settlement, appearing on the boat’s title.
Named Insured
The person or person(s) whose name appears on the insurance policy.
Named Storm
Tropical storm or hurricane as designated by the National Oceanic & Atmospheric Administration.
NOAA
Acronym for the National Oceanic & Atmospheric Administration.
P & I (Protection & Indemnity)
Coverage for third-party property damage, bodily injury, or death caused by you or your boat for which you’re found legally liable.
Partial Loss
Any claim incurred that has not resulted in the total loss of the boat.
Premium
the price to obtain insurance as determined by the underwriter.
Proof of Insurance
Documentation showing the boat insurance policy is in effect.
Quote
Verbal or written estimate of the cost to insure the boat as determined by the Underwriter.
Risk
Factor(s) that determine the possibility of a loss which assist the underwriter in determining the cost to insure your boat. May include the operators experience, the type of boat or the location of the boat.
Salvage
Successful rescue of insured boat from a perilous or dangerous situation.
Sound and Seaworthy Statement
Written confirmation by owner that the boat is in safe and proper condition for its intended use.
Surveyor
Accredited marine specialist who ascertains the condition or value of the boat, or if in the event of a loss, damage to the boat.
Total Loss
The boat is completely lost…stolen and not recovered, sunk and not found or salvaged.
Underwriter
Person or company assuming risk or responsibility for insuring your boat.
Wreck Removal
Remove and dispose of the remains of an insured boat when legally required.
