How do ‘agreed value’ and ‘market value’ policies differ?
Boat insurance tips: there are two types of coverage available to insure your boat. To help boaters save money on insuring older vessels, insurers offer the option of “agreed value” (think sticker price) versus “market value” (think depreciation) in the case of a total loss.
With agreed value coverage the insured and insurer agree on the value of the boat upfront. If something happens to the boat, you’re going to get paid up to the agreed value.
Market value coverage depreciates the boat’s value; so if the boat is destroyed, you’re going to get enough money to replace the boat’s (current) value. If you bought the boat in 2005, you’re not going to get enough money to buy a 2011 model; you’re going to get enough to buy a 2005 model.
Market value policies often run about 25% less than agreed value.
Owners of newer boats typically insure with agreed value. As the boat ages and the value depreciates, and if there is no loan on the boat, it might make sense to save the money and change the coverage to market value. Call us to discuss your specifics.
Is my boat covered when it’s out of the water?
Strangely enough, yes — but not by your boat policy.
When the boat is attached to your car or truck, you are covered by your auto policy should you back into somebody. Anytime you’re trailering something, your auto policy will respond.
The bad news is it’s covered solely by your auto policy, and only to the limits contained therein.
A yacht policy will not pay for loss of life, bodily injury or property damage that occurs when the insured property is being transported on land- coverage is limited to your auto policy limits.
Your homeowners insurance may provide limited coverage if the boat is damaged while parked on your property, but it may not stretch to cover stolen contents or vandalism.
How can I save money on boat insurance?
Now that you know the basics of boat insurance, let’s dig for some savings.
- Get specific. Don’t buy a yacht policy if you own a dinghy. There are many varieties of boat insurance, including powerboat, sailboat, houseboat, bass boat, wooden boat, fishing boat, pontoon boat, personal watercraft and so on, each with its own price structure and set of features. Call us to find the right coverage.
- Go all-in on safety features. Many boat insurance underwriters offer policy discounts for gadgets that protect their investment, such as wireless auto tethers that act as an engine kill switch should the skipper or any of the passengers fall overboard.
- Take a boating class. A trained boater is a safer boater. Contact your agent for discount-qualifying classes in your area. One class can save you 5 percent or more on your policy, year after boating year.
- Extend your lay-up period. Insurers are willing to cut your premium during those days or months when you’re not using your boat. A premium discount of about 4 percent per month off the hull portion of your total premium.
- Bundle boat insurance. Just like home and auto insurance, bundling your policies with the same company can save you up to 15%. Call us to see what we can save you.