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Thread: Insuring that "Smokin' Deal" you just got on a boat

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  1. #1
    VENDORS
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    Insuring that "Smokin' Deal" you just got on a boat

    Many boat owners are finding themselves in the similar situation that homeowners throughout the country are in, they owe far more than their piece of property is worth. This is bad news for boat owners who are struggling in today’s economy. However, for those that have cash to burn, this market is FANTASTIC for buying a boat at a fraction of what it would have cost you several years ago.

    Before discussing the insurance on boats that are purchased for such low prices, we must first refresh our memories as to what the true purpose of insurance is; indemnification. A simple way to define indemnification is “to financially make whole” or “bring back to square one financially”, not to profit. So relative to boat insurance, this would be to reimburse you for the amount you have financially invested in the boat (purchase price plus improvements).

    When you get a boat at such a great deal, insuring the boat for what you think it’s really worth can be difficult. Most performance boat insurance policies are written on an agreed value basis. When establishing an agreed value, the insurance company will ask for a copy of your purchase agreement. They do this so that they can verify what you actually paid for the boat. The reason that an insurance company will not insure beyond the price on the purchase agreement is because if there was a total loss, you would profit from insurance payout, which is not the purpose of insurance. If this was allowed, too many people would be buying boats, over insuring them and then making them suddenly disappear and turning a profit.

    The bottom line is: You can not insure your new purchase for more than your purchase price which is validated by the purchase agreement.
    Stacy Shute

    Wake Zone Marine - Insuring your need for Speed!
    Phone: 480-357-9663 ext. 101
    Email: stacy@wakezoneinsurance.com
    www.wakezoneinsurance.com

    TO OBTAIN A QUOTE: http://www.wakezoneinsurance.com/Quote_form.html

  2. #2
    Baja Boat Owner
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    Re: Insuring that "Smokin' Deal" you just got on a boat

    How does full replacment value work then and do you offer that?
    I currently pay a little extra for that on my policy but figured since I got a brand new $65,000 boat for $28,000 it was a good idea b/c my "Smoking deal" most likely won't come along again.
    Chad

  3. #3
    VENDORS
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    Re: Insuring that "Smokin' Deal" you just got on a boat

    Quote Originally Posted by wowchad View Post
    How does full replacment value work then and do you offer that?
    I currently pay a little extra for that on my policy but figured since I got a brand new $65,000 boat for $28,000 it was a good idea b/c my "Smoking deal" most likely won't come along again.
    Chad
    Good Question.

    If you have a boat that is brand new or up to 2 years old, SOME carriers will offer a REPLACEMENT COST policy. Currently, there are two carriers that I am aware of in the peformance realm of insurance that offer these; American Modern and Progressive. The other carriers offer Agreed Value or ACV. An extra premium is always charged for the endorsement. To some it is worth it but it is only available for boats up to 2 years old, then the endorsement typcially drops off and goes to Agreed Value (purchase price/financial interest). Hopefully that makes sense.
    Stacy Shute

    Wake Zone Marine - Insuring your need for Speed!
    Phone: 480-357-9663 ext. 101
    Email: stacy@wakezoneinsurance.com
    www.wakezoneinsurance.com

    TO OBTAIN A QUOTE: http://www.wakezoneinsurance.com/Quote_form.html

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