Many new boaters are on the water and with the Summer approaching now is a great time to evaluate your boat insurance policy!
Boat insurance is very similar to auto insurance in many respects but vary greatly when dealing with property damage. An insurance company paying for the total loss of your car should be fairly straight forward however, a boat is not so simple. Boat values have been rising for the past year so if you have a recent purchase and do not have the right insurance you may lose $20,000 to $30,000 in the blink of an eye.
Boat property damage mostly falls into two categories: Agreed Upon Value and Actual Cash Value. Agreed Upon Value is where you and the insurance company come to an agreement on what the value of your boat is worth. For instance, you purchased your boat two years ago for $75,000 and owe $60,000 on the loan but the boat in today’s market is worth $80,000. If you have a policy with an agreed upon value of $50,000, someone rear-ends you while trailering your boat, and the boat is a total loss you would only get $50,000 and would still owe the other $10,000 on your loan.
If it is an Actual Cash Value policy they will take into account depreciation, condition of the boat prior to the crash, and what the insurance company considers the value of the boat was at the time of the crash. In that event, you may only get $40,000 for your boat while still owing $20,000 on the loan. Neither of the scenarios are acceptable.
First, find several insurance companies that offer agreed upon value policies and what they would place the value of your boat at. Second, if you feel that the value of your boat is more in today’s market demand that they raise the agreed upon value to a level that is the true value of your boat. Your premium will increase but you will be covered for a loss. My insurance company raised my agreed upon value over $20,000 upon my request. Several other carriers were not so agreeable and if my boat was a loss I would have lost over $20,000 while having insurance.
Don’t let the insurance company bully you into accepting a lower value.
If you have been involved in a crash involving a boat, car, or motorcycle please give me a call to discuss your claim (321) 926-8002.