If your boat is a total loss, how will you be compensated?
Well, that all depends on the insurance you choose. Generally speaking, there are two main types of coverage: Agreed Value and Actual Cash Value.
NautiMax Agreed Value policy covers the boat value as indicated on the insurance policy and offers a replacement value on partial losses. The premium is higher, but if the boat is a total loss, no depreciation will be calculated and you will have no deductible to pay. You will receive the full value of your boat.
You can obtain an Agreed Value policy on most of the models as long as your boat is under 10 years old, with the option of extending the coverage to 15 years. You will be required to provide a copy of the contract of purchase as proof. However, this coverage is not available for sport and high-performance boats.
An Actual Cash Value policy costs less, but in the event of a claim you’ll receive a benefit equivalent to the market value of your boat on the day of the loss, minus its depreciated value depending on the condition of the boat.
Are you buying a brand-new boat and need enhanced coverage?
Personalize your policy by adding a Guaranteed Replacement Cost endorsement—available exclusively to MD Marine clients! In the event of a total loss, your benefit will reflect the cost of the latest model of your boat, even if it costs more than the amount specified on your policy. This optional coverage is available only for new boats of less than $500,000 and for no longer than three years.
So how does it work?
Imagine that the boat you paid $35,000 for three years ago is heavily damaged in a storm while moored in a marina. Following an appraisal by a chartered appraiser, your insurer tells you that your boat is considered a total loss. How much do you think your policy will pay out?
Agreed Value policy
Your policy will pay a benefit of $35,000
Actual Cash Value policy
After depreciation, you might receive a payout of only $25,000
Policy with Guaranteed Replacement Value endorsement
If the latest model of your boat costs more now, you could receive a benefit of more than $35,000