Owning a boat is a big investment and a bigger responsibility. To protect yourself and ensure your time on the water is fun and worry-free, you need adequate boat insurance. There are many factors to consider when selecting coverage, including the value of your vessel. In the event of a total loss, your policy can help you recover financially. However, before buying an insurance plan, you have to understand how you’ll be reimbursed. This depends on whether you have an actual cash value or agreed-upon value policy. Below is an overview of how the two options work.

Understanding Boat Insurance Policies 

Actual Cash Value 

With an actual cash value policy, your boat will be covered up to its current market value. This is the amount your vessel would be worth at the time of the loss minus depreciation. Generally, the condition of the watercraft is also taken into account when calculating how much your insurer will pay out. These policies offer a lower premium and simpler claims process but provide less coverage.  

Agreed-Upon Value 

This kind of policy is written for a pre-determined amount that you and your insurer agree on at the time you purchase boat insurance. If your vessel is stolen or totaled in a covered incident, the amount listed on the policy is what you will receive. Depreciation isn’t a factor with agreed-upon value policies; thus, they include more coverage but come with higher rates. When there’s a partial loss, insurers typically pay for the damages on a replacement cost basis minus the deductible. 

If you need help determining which type of policy will best protect your vessel, turn to Phil Taylor Insurance Agency. They offer a variety of boat insurance options from a network of reputable carriers and will assist you in finding the right coverage at the lowest rate available. For nearly 60 years, they’ve provided Clarksville, AR, residents with high-quality insurance solutions and personalized service. Call (479) 754-2616 to request a quote, or visit them online for more information on their products.