With a replacement policy, however, your insurance agency would cover the entire replacement cost.” 3. But, if it happens two years from now, the price of a new Phoenix/Mercury combo might have gone up to $78,000 due to inflation, so you would be out $3,000. “If the boat is stolen or totaled by a hurricane and you have an agreed value policy, your insurance policy will cover your loss up to $75,000.
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“Let’s say you purchase a new 21-foot Phoenix PHX boat with a Mercury 250hp Pro XS outboard, like the one I’m going to pick up this week, and the invoice for the boat and motor is around $75,000,” said Hollowell. The replacement value, which takes inflation into account, can be more than the price originally paid for the boat.
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Replacement Value: A handful of insurance companies offer full replacement value, but usually for a limited amount of time, like one or two years.
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In addition, if you upgrade your boat by adding a new custom part or electronics, or you repower it with a new Mercury Pro XS outboard, it’s important to get a written appraisal for the vessel’s new value and take it back to your insurance agent to renegotiate the agreed value listed in your policy.
Be careful, however, because this type of coverage often comes with a time limit. An agreed value plan is always a great option because it ensures you have coverage for the amount you actually paid for the boat.
If you have financed the entire boat purchase, an ACV policy can leave you in the position where you have negative equity in the boat in the event of a total loss since it will only pay back the current value – or the amount you could get if you sold the boat – and not necessarily the full replacement cost.Īgreed Value: With this type of policy, the insurance company agrees to insure the boat to a value that has been documented by a sales invoice or appraisal. The important thing to know is that once you take ownership of a new boat, it becomes a used boat – even on the day you drive it away from the dealership. Discuss all three with your agent so that he or she can help you evaluate which one is best for your individual needs.Īctual Cash Value (ACV): This is a common type of insurance policy that allows for depreciation of the vessel. Start the conversation with your agent by providing the full details of your boating rig. In other cases, your insurance agent might not realize you have a trailer that needs to be covered in addition to the boat and motor. Some insurance companies will cover them separately or will include only the boat in the policy. If the boat has a trailer, make sure that the boat, motor and trailer are all covered by the insurance policy. He offered the following boat insurance tips to help more people purchase the proper coverage. “The issue lies in the fact that many people don’t know if their boat is insured properly.” “I think most people have boat insurance,” Hollowell said. While Hollowell handles many types of insurance policies, when it comes to helping clients get the best coverage for their boats, his lifelong experience with boating and fishing serve him well. What few of Hollowell’s fans know is that he also has a day job as an agent with the Ray Insurance Group in Fishers, Indiana. Mercury Pro Team member Todd Hollowell is well known for being a professional bass angler and co-host of the FLW LIVE broadcast and TV show.
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