You and the insurer agree on a specific dollar amount for the boat’s value when the policy is written.
How it works: If your boat is a total loss, you receive that exact fixed amount, regardless of how old the boat is or its current market condition.
Best for: Newer boats, vessels with loans (to avoid a “gap” where you owe more than the boat is worth), or classic boats that hold value.
Trade-off: Premiums are typically higher.
This policy covers the boat for its current market value at the time of the accident.
How it works: The insurer calculates what your boat is worth now (factoring in age, wear, and tear) and deducts that depreciation from your payout. You will likely receive significantly less than what you originally paid.
Best for: Older boats where the value has already bottomed out, or for owners prioritizing the lowest possible monthly premium.
Trade-off: You risk receiving a payout that is not enough to buy a comparable replacement boat.
