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Frequently Asked Questions about Boat Insurance

Why and when should you consider purchasing a separate boat insurance policy?

What’s the difference between replacement cost, agreed value and market value?

I’m not sure if I need a full coverage policy, or if liability only is enough boat insurance coverage for me. What is the difference?

 

Why and when should you consider purchasing a separate boat insurance policy?

According to the Insurance Information Institute, here’s what you can generally expect in the way of coverage when you endorse your boat onto your homeowners policy:

  • Coverage limits of about $1,000, or ten percent of the home's property value
  • Coverage that includes the boat, motor, and the trailer
  • No protection for items such as fishing equipment and personal effects. 
  • Liability coverage is generally not included, but it can usually be added

Policies differ, so you will need to ask your agent about the coverage you could get for your boat via your homeowners policy.  If you need more protection, you’ll want a separate policy.

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What’s the difference between replacement cost, agreed value and market value?

  • Replacement cost.  A replacement cost loss settlement pays for the repair or replacement of your boat with one of similar kind and quality.  This means if your boat is two years old and it is a total loss, your claim settlement will pay to replace your boat, up to 120% of the value shown on your declarations page.  Also, if your boat is a total loss, you will have no deductible to pay.
  • Agreed value means that you and your insurer have agreed on the value of your vessel.  In the event of a total loss, you will be paid the agreed value amount shown on your declarations page, without any deduction for depreciation.  And, there’s no deductible to pay if your boat is a total loss.
  • Actual cash value takes depreciation into account when settling your claim, and pays you the actual cash value of the boat at the time of loss.  Used boat pricing guides and other resources are used to determine the vessel’s approximate value. Partial losses are subject to deductible, and are settled by taking the total cost of the repair minus the depreciation for parts.

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I’m not sure if I need a full coverage policy, or if liability only is enough boat insurance coverage for me.  What is the difference?

Liability coverage pays for damage you cause to another boat, or injuries you cause to another person while boating.  To be a responsible boater, you’ll need liability protection.  Note that waterski liability is NOT included in our basic liability only policy.

A full coverage policy pays to fix damage caused to your own boat, pays to cover any injuries to yourself or others who are on your boat, and also provides liability protection.  This type of policy also gives you options that allow you to customize your protection.  American Modern offers many coverage options on full coverage policies.

As with any policy, there are limits and exclusions of protection.  Always read your policy carefully so that you understand your coverage.

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Products, coverages and discounts are not available to all persons, in all states or apply to all possible risks. Terms, conditions and exclusions may apply. Rates are derived from a number of factors, which can influence the price, discounts and savings. Your rate may be higher or lower.  Policies are subject to underwriting review and approval. Rates are subject to change. Policies are written by one of the companies of American Modern Insurance Group, which includes American Modern Home Insurance Company and American Family Home Insurance Company.

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