Why can't I insure my boat for more than I paid for it? I got a great deal!
Answer: Our companies write "agreed value coverage", which means that the face amount of the policy will be paid in the event of a total loss. If we insure your boat for more than you paid for it, you could make a profit. This contradicts the sole purpose of insurance, which is to compensate for loss or damage and nothing more.
What is the difference between agreed value and actual cash value?
Answer: Agreed value represents the current market value of the watercraft, including motor(s), portable boating equipment, permanently attached equipment, marine electronics and trailer (if trailer coverage is requested). In the event of a total loss, you would receive the specified agreed value amount on your policy with no depreciation.
Actual cash value is determined by the market value, age, and condition of boat at the time of the loss. In the event of a total loss, coverage will pay the lesser of the current actual cash value or the rating base. Basically depreciation is accounted for.
How much liability will I need?
Answer: The best way to decide how much liability coverage you need is to ask yourself this question: How much do I need in order to feel completely protected? We offer anywhere from $100,000 to $1,000,000+ If you have a high investment portfolio, you may want to consider a larger liability. On average, most boat owners end up choosing $300,000 liability.
Will my lack of boating experience affect my policy?
Answer: Boating experience is one of the many factors used for rating purposes. The less boating experience you have, the fewer carriers will be able to trust your ability to safely operate and navigate a vessel. If you are a first time boat owner and have little to no boating experience, it is in your best interest to choose a smaller vessel. Your policy will be more affordable and you are more likely to get coverage.
How far off shore can I take my vessel?
Answer: Most navigation guidelines will be stated in your declaration page or in the policy itself. Since every company has different guidelines, it is important to read your policy and understand its limits on coastal and international waters, nautical miles versus regular miles, etc. Feel free to contact NBOA if you need further explanation of any policy guidelines.