Types of Boat Insurance
There are two basic types of boat insurance—“agreed value” and “actual cash value.” How depreciation is handled is what sets them apart.
An "agreed value" policy covers the boat based on its value when the policy was written. While it can cost more up front, there is no depreciation for a total loss of the boat (some partial losses may be depreciated).
"Actual cash value" policies cost less up front, but factor in depreciation. In other word, the policy will only pay up to the actual cash value of the boat at the time it is declared a total or partial loss. Eventually, as your boat ages, your insurer will likely insist on an actual cash value policy—and if often gives a substantial savings.
What Boat Insurance Policies Cover
How and where you boat determines the type of coverage you need. An "all risk" policy will offer the best protection. However, an “all risk” policy does not cover every type of loss. In insurance terms “all risk” just means that any risk not specifically omitted in the policy is covered. Typical exclusions include wear and tear, marring, denting, animal damage, manufacturers’ defects, design defects, ice and freezing.
You may also be able to add extra coverage. Available options may include: medical payments, personal effects, uninsured boaters liability, and towing and assistance. Most policies will cover permanently attached equipment, as well as items like anchors, oars, trolling motors, tools, seat cushions, and life jackets. Be sure to discuss these options with your agent.
Kinds of Boat Insurance Policies
Marine insurance covers a wide array of watercraft.
You may be surprised to find what can be insured. Marine insurance policies include:
- Boat
- Personal Watercraft (PWC)
- Yacht - generally, vessels 26' and smaller are called "boats,” and "yachts" are 27' and larger. Yacht coverage tends to be broader and more specialized because larger boats travel farther and have more unique exposures.
- Sailboat
- Dinghy
- Boat & PWC Rental - Although this is generally not required, rental insurance will help cover any damage the vessel, as well as the operator and passengers.
- Boat Clubs - covers all members of club while operating a boat.
- Professional (ProAngler, Fishing Guides & Charters) - These policies are very customizable and can cover items like travel to a tournament, equipment and more.