Insurance Terms

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 Blue Book) are often used to determine market value.

Agreed Value

Determined and agreed upon by both owner and insurance underwriter at the time the policy is purchased.

AM Best Rating

Rating assigned by the insurance institute, usually a result of factors including the company's solvency, customer service and claims handling. BoatUS policies are underwritten by either GEICO Marine Insurance Company with an AM Best Rating of "A+" or National Liability & Fire Insurance Company with an AM Best Rating of "A++."


To start coverage by accepting the quotation offered and meeting any special conditions and agreeing on a date to start coverage.


Immediate, temporary coverage or proof of insurance until a policy can be issued. Usually good for a 30 day term.


The insurance company underwriting the policy.


Disaster in a specific geographic area such as hurricanes, floods, marina fires, etc.

Catastrophe (CAT) Team

BoatUS 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 (CTL)

Occurs when the cost of a boat's recovery and repair exceeds the insured value.


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 BoatUS and a fee will apply based on the length of the extension.

Damage Avoidance

Loss prevention, preparation that prevents or minimizes a loss. The BoatUS program offers education and "how to" information taken from actual claims.


The portion of a claim to be paid out of pocket. The higher the deductible, the lower your insurance premium will be.


A measured decrease in value of the boat or its parts and equipment due to age.

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.


Legal decision determining fault or liability.


Who's legally at fault. Liability insurance provides coverage for third party 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.


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.


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.


The price to obtain insurance as determined by the underwriter.

Proof of Insurance

Documentation such as a Binder, Declarations Page or Certificate of Insurance showing the boat insurance policy is in effect.


Verbal or written estimate of the cost to insure the boat as determined by the Underwriter.


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.


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.


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.


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.