Once you are satisfied with the survey report from your boat surveyor, you can proceed with the purchase of the boat. With the right buyer, closing the deal will be bliss. Considering the purchase of a boat is a huge investment, it is imperative that you protect your investment. The best way of doing this is getting boat insurance Cape Coraltrusts.
There are many boat insurance providers all across Florida. Not all of them will offer comprehensive insurance cover. That is why you need to be cautious before settling for an insurance offer. Moreover, working with an experienced marine surveyor in Cape Coral will help you know the type of insurance policy you should take. Away from that, let’s take a look at the two types of boat insurance Cape Coral trusts.
Agreed Value
When reviewing insurance covers, you may come across the term ‘agreed value’. When you see this, think of it as a sticker price of your boat at the time of insuring it. This is because, with an agreed value cover, the insurance company will pay in accordance with the value of your boat at the time the policy is written. An agreed value is basically an agreed price upfront. It will not change and doesn’t include depreciation.
The beauty of an agreed value type of boat insurance is that it is not affected by depreciation. You can buy a boat in 2014, get it insured in 2015 then file a claim in 2017. Even though the boat will have depreciated, you will get the agreed amount that your boat was worth back in 2015. The drawback, however, is that an agreed value type of insurance will cost you significantly more upfront. The deductibles are also high.
Actual Cash Value
With this type of boat insurance, the insurer will account for the depreciation of the vessel. When you file a claim, you will get the amount in relation to the current value of the boat. the policy pays to the ‘actual cash value’ of a boat at the time of the claim.
If you got your boat insured in 2014 and file a claim in 2018, the compensation you get will be based on 2018’s valuation. You get paid based on the current value of your boat. this means actual cash value accounts for depreciation and market value. Although the payout will be less, the upfront costs and the deductibles will be lower.
When deciding on whether to go for agreed or actual cash value, you must always consider how you plan on using the boat and its current condition. Most owners of new, larger boats opt for agreed value. People buying used boats mostly opt for the actual cash value.