Boat Insurance Tip: Valuation Clause

If you haven’t checked the valuation clause on your boat insurance policy, now is a good time to do so.

In the event of a complete loss, many boaters are unaware that insurers will subtract the depreciation of the boat based on its age and condition. In other words, you may only be reimbursed for the value of the boat based on the current market value listed in the BUC Book (the marine version of the Blue Book for cars). Many boaters end up paying too much on their policy as the boat depreciates, and do not receive the replacement value they expect.

In the case of a partial loss, such as a theft of electronics or an outboard, some insurers provide replacement cost without depreciation. However, not all do, so read the fine print, or ask.

If you own a classic boat, a restored boat, or a boat with sentimental value that would take a lot of money to replace, you may need an “agreed-value” policy. With this type of policy, you and the insurance company agree on the value of the boat and what it would cost to replace in the case of a total loss.