When it comes to Boat and Yacht insurance, many are faced with the challenge of deciding between insuring their vessel at an Agreed Value or Actual Cash Value (A.C.V.), which can sometimes be confusing, so lets clear it up for you.
What is an Agreed Value Boat Insurance Policy?
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.
What is an Actual Cash Value (A.C.V.) Boat Insurance Policy?
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.
Before you agree to a policy, it’s important to compare your options to be sure that it’s right for you. If you have any doubt or confusion regarding policy options, it’s important to speak to a specialist boat insurance agent who will be happy to explain the policy and it’s coverage options to you.