When you purchase a boat, you will likely want to ride it as much as possible. However, there are many elements that can damage the craft, such as submerged logs, inconvenient dock pilings, and inattentive boaters. As such, you should protect your investment with the right insurance coverage. The following will explain the main types of boat insurance limits, so you can get the right coverage for your needs.

What Is Agreed Upon Value?

In the event of a total loss, such as a catastrophic fire or sunken boat, agreed value policies pay out an amount that you and the insurer agree upon at the outset, not including any deductible. For partial losses, the amount paid is enough to replace whatever was lost or damaged, again without the deductible. It doesn't matter if the boat is brand new or 10 years old; you will still receive full value for the claim. Because of this, these policies often come with higher premiums.

What Is Actual Cash Value?

Actual cash value policies are less expensive, but they often don't reimburse as highly. For a total loss, they pay the actual cash value of the boat. In other words, you receive the value of the boat after depreciation.

For instance, if your insurer depreciates a boat over seven years, the value of the craft decreases by 1/7th every year. Therefore, such a policy on a 6-year-old boat will pay only about 1/7th of its original value on a total loss. Depreciation on partial losses is similarly depreciated.

What Is Total Replacement Value?

This policy replaces a total loss with a new boat of the same make and model. This coverage is very expensive, and it’s only available when your boat is new. It also only lasts until your boat is two or three years old, at which point you must switch to another type of coverage.

If you need the protection of boat insurance, contact the Ebert Agency in Foley, AL. They are family-owned and -operated and have served Baldwin County clients since 1928. In addition to boat insurance, they also carry auto, home, business, and renters insurance. Call them at (251) 943-2281 to have an insurance agent help you design a policy or get a quote online through their website.