5 Things To Know About Boat Insurance

By Pat Piper
Published: Summer 2013

It's one of the most important things associated with owning a boat, but insurance policies can be confusing. Here's what you need to know before you sign on the dotted line.

E90 Ranger White

1. What should a boat insurance policy include?

Coverage for the boat, engine, boating equipment, dinghies, and trailer. Medical payments coverage for onboard injuries and liability coverage for any property damage or bodily injury you are legally responsible for.

2. What does "Actual Cash Value" or "Agreed Value" mean?

Policies are written as either "Actual Cash Value" or "Agreed Value."

Actual cash value: For total losses, your payout is based on the current market value of your boat. For partial losses, you receive the value of the loss less depreciation and the deductible.

Benefit: You pay less up front.

Downside:You pay more to get back on the water after a loss.

Agreed value: For a total loss, you are paid an agreed policy value, which means you know how much you'll get in the event you lose your boat. Partial losses are subject to the deductible and some items will also be adjusted for depreciation. All losses on boating equipment are replaced "new for old" after the deductible. For example, if your 5-year-old GPS is stolen, it will be replaced with a brand new one (of like kind and quality).

Benefit: You pay less out of pocket in the event of a partial loss and you know exactly how much you would receive in the event of a total loss.

Downside: You pay a higher premium.

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