You recently bought a boat and what a wonderful purchase it is!
Perhaps you use it for fishing, vacations or just having fun on the weekends with friends. Of course just like your home, car and health you will want to protect it against any unforeseen events that may arise. Boat insurance is only way to do this.
When thinking about boat insurance coverage it is important to note that the insurance is not a maintenance policy and will not cover wear and tear, deterioration, etc. Mold, wet and dry rot, and vermin are also excluded from most policies. Therefore, floorboards, upholstery, canvas, foam packing; etc. will not be covered in most cases. Many companies will offer mechanical coverage on new boats for an additional premium.
When considering marine insurance, one needs to understand policy types, coverage limits and limitations.
While your home insurance policy may cover things such as your boat it is not the best option. Always buy a separate boat insurance policy regardless of cost. Then, if you should you experience a liability or medical loss related to the boat, it would not affect your home.
Types of marine insurance policies.
Agreed Value or Stated Value
The agreed value is the amount that the insuree and insurer decide is the value of the hull and attached hardware. Generally, value is determined from the dealer purchase agreement on new boats and by NADA Guide values or dealer purchase agreements for used boats.
It is important to establish and document value prior to loss and pay the necessary premiums. The hull and all attached hardware have a single coverage limit. Should you add any accessories that are permanently affixed it is important to make certain your hull coverage includes the value of those items.
Actual Cash Value
The actual cash value is the amount that the insurance company pays you at the time of the loss. The insurance company has the option of replacing your boat with another boat of similar quality and value or paying you the cash equivalent. This means that if they locate a replacement on the Internet, they have the option of buying it for you or offering you an equal dollar amount.
