MARINE INSURANCE TERMS

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Actual Cash Value

An Actual Cash Value Boat Insurance Policy is one where the insurance company will pay you the value of the property insured, in this case the vessel, at the time of loss. The appraisal for the actual cash value factors in depreciation and wear and tear to calculate the value . These policies are usually easier to obtain as well as cheaper than an Agreed Value, but an owner will not be 100% sure of how much the insurance company will pay until after the appraisal process.

Agreed Value

An agreed value insurance policy is one where the value of the property insured, in this case a vessel, is stated in the policy. Should an accident or loss occur, the insurance company agrees to pay a set amount. Like any policy, there will be stated exclusions so it is important to consult your agent to clarify what is covered. Agreed Value Insurance Policies are popular because they usually cover more and you know exactly how much you will receive if an accident happens, but they usually command higher premiums.

Bind
To accept an insurance agreement. 

Binder
Temporary insurance coverage until the full insurance policy is released.

Carrier
A carrier is an insurance company. Example: Geico Marine Insurance, Pantaenius Yacht Insurance, Markel Yacht Insurance, AIG Marine Insurance, Ace Marine Insurance, Chubb Marine Insurance, Travelers Boat Insurance, Lloyd's of London, Brit Yacht Insurance, Hiscox High Net Worth Insurance, New Hampshire Boat Insurance, Etc.....

Claims Adjustor
A company or person who investigates and helps to settle a loss. 

Constructive Total Loss (Total Loss)

When an incident happens in which the damage to the yacht or boat is more than the cost of repair.

Cruising Area
The defined geographical area in which the yacht or boat navigates. Most insurance policies have defined cruising areas, which are usually able to be extended through an extended cruising endorsement. 

Deductible (excess)
The amount that is paid by the yacht or boat owner in the case of an accident. Raising the deductible usually results in a lower premium. In the case of a total loss, the deductible usually does not apply. 

Depreciation
The loss of a yacht or boat's value each year. Most marine insurance companies have a formula to measure depreciation.

Insurance Fraud

Any act committed with the intent to obtain a fraudulent outcome from an insurance process. This may occur when a claimant attempts to obtain some benefit or advantage to which they are not otherwise entitled, or when an insurer knowingly denies some benefit that is due.

Judgment
The legal decision stating which party was at fault.

Liability 

A person or thing whose presence or behaviour is likely to put one at a disadvantage.

or;

When someone is legally responsible for a loss.

Lien holder
A person or company who has made a loan towards the boat. It is prudent to list these on the insurance policy as a "Loss Payee"

Loss
Damage caused to a person or person's yacht or boat.

Loss Payee
Also known as a "Lien Holder", that is listed on the yacht or boat insurance policy.

Named Insured
The person, persons, or company listed on a marine insurance policy. 

Named Storm
A storm, tropical storm, or hurricane listed on NOAA's list.

P & I (Protection & Indemnity)
Coverage for damage that the yacht or boat operator or owner causes to a 3rd party. This includes bodily injury. 

Partial Loss
Damage that is less than the value of the boat or yacht.

 

Premium

The price of insurance. This is usually calculated as a percentage of the yacht's value. 

Quote (Insurance)
How much yacht insurance will cost. The quote will include a list of coverages as well as policy limits. Click for a quote.

Risk
Another word for the yacht, boat, or it's associated coverage. An underwriter is taking a "Risk" when he or she insures a boat.

Salvage
The rescue of a vessel.

Surveyor
A qualified professional who is able to correctly evaluate a boat or yacht's condition or any damage. Click here to find a yacht surveyor or boat surveyor.

Total Loss
Also know as a "write off". When the cost of repair exceeds the yacht's insured value.

Underwriter
The professional who charges a premium in return for yacht insurance.