We sometimes spend as much on our boats as we do cars or even our house. You may be surprised that having your boat or watercraft appraised is just as important as any other collector vehicle.

There are three types of boat insurance policies.

• Agreed Value
• Replacement Cost Value
• Actual Cash Value

If you suffer a total loss to your boat, your claim will be settled according to the type of policy you have, so getting an appraisal may help facilitate claim resolution.

Agreed Value

Agreed Value is the most common and generally the most desirable type of boat insurance policy. You and the insurance company agree on the value of the boat when the policy is written.

Replacement Cost

Replacement Cost is the newest type of policy and agrees to replace your boat with a new boat of similar make and model. This coverage can be purchased only when the boat is new and the coverage is only available until the boat is two or three years old.

Actual Cash Value

An actual cash value policy provides less coverage than an agreed value policy, but generally at a lower cost. An ACV policy provides coverage up to the current market value of the vessel in the event of a total loss, taking into account depreciation and the condition of the boat at the time of the loss. Payments made for partial losses are usually reduced based upon physical depreciation of the lost or damaged items, and the policy deductible is also applied.