This overview will help you make an informed decision when you're ready to buy Boat Insurance. Boat Insurance programs are normally designed to cover boats up to 26' in overall length. If the size of your vessel is greater than 26 feet, it's generally considered a "yacht", and therefore qualifies for yacht insurance.
Boat Insurance provides physical damage coverage to repair your boat if it's accidentally damaged or destroyed by a covered peril such as collision, fire, theft, windstorm, lightning or vandalism. This coverage is broad, and provides coverage for the boat, including its machinery and auxiliary equipment, outboard motors, boat trailer and personal property.
A Boat Insurance policy can provide physical damage coverage on an Actual Cash Value (ACV) or an Agreed Amount Value basis. Both types of Boat Insurance policies offer important coverages for your boat but there are significant differences. Actual Cash Value policies pay for Replacement Costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the approximate market value of your vessel. A partial loss is settled by taking the total coast of the repair less a percentage for depreciation.
Agreed Amount Value boat insurance policies mean you and the insurance company have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss without any deduction for depreciation. Most Agreed Amount Value policies require actual cash value on certain damaged property such as sails, protective covers, batteries, dinghies, trailers and aged outboard motors, lower drive units or outdrives.
Physical Damage coverage is usually subject to a deductible. The boat and motor usually have the same deductible with additional deductibles for the trailer and personal effects. The deductible is the amount you are willing to pay in case of a loss. The higher the deductible, the lower your insurance premium. Boat policy deductibles are usually calculated as a percentage of your coverage (1%, 2%, 3% of the vessel value) or can be on flat amounts of $250 or $500.
A good Boat Insurance policy should also offer Personal Effects coverage to provide protection for those items not intended for the normal operation of your boat, such as portable TVs, cellular or portable phones, stereos, radios and cameras.
