If you’re like most fishermen, you’ve probably invested a lot of money in your sport – especially in your boat. When it comes to shopping for insurance for your fishing boat, there are some things you should know. Looking into the details now can save you from headaches later on. The time to discover you don’t have coverage is not when you have a loss. To keep it from getting too complicated, let’s start with the basics.
Choose an Agent: You should begin by using an agent who specializes in marine insurance. An agent who speaks to you in terms you understand is also desirable. If you don’t understand something, ask for an explanation in layman’s terms. Ask experienced boating friends for their insurance recommendations.
Actual Cash Value vs. Agreed Value: These are the two main choices for boat insurance and depreciation is what sets them apart. No two policies are the same.
An Agreed Value policy may cost more, but it pays more. It will cover the stated value of the policy in the event of a total loss. For example, a total loss on a $50,000 agreed value policy will pay you $50,000. It may be subject to a deductible. More importantly, a partial loss on an agreed value policy replaces most items on a “new for old” basis, with little or no depreciation, depending on the carrier. Hence, a claim for the theft of a three-year-old bottom machine would get you a new, comparable replacement.
Actual Cash Value (ACV) policies generally cost less, but only pay up to the actual cash value at the time the boat or property was lost or damaged. Depreciation is usually calculated on all losses. ACV policies are better suited to less expensive boats or when you are not as concerned about a total loss.
Other Coverage: Some policies extend coverage to include fishing gear that you carry on the boat such as rods and reels, electronics, trolling motors, tackle, etc. You might also participate in fishing tournaments from time to time. Make sure your policy provides the liability coverage required. Do you need hurricane haul-out assistance or fuel spill coverage? Are you planning a long trip away from home? What happens if someone else drives your boat and has an accident? A good agent will review all of your options so there will be no surprises.
Deductibles: There are several ways to reduce the cost of your boat insurance. The most common way is to select the highest deductible amount that you are comfortable with. In general, physical damage deductibles start at around 1% of the value of the boat and can sometimes be increased to as much as 5%.
Now that we’ve described some of the key elements, we hope that you are in a better position to ask the right questions when buying marine insurance.
By Ken Jones
Wallace Welch & Willingham
Marine Insurance Group
St. Petersburg, FL