You already have a homeowner’s insurance policy. Do you need boat insurance too?

The short answer to that question is, it depends.

• Does your homeowner’s insurance policy cover your boat? (Hint: Not all of them do)
• If so, what type of insurance policy do you have?

Understanding your insurance policy is not always easy. Even when you know that you have boat insurance included on your homeowner’s insurance policy, you might not have an accurate idea of how much coverage or the type of policy you hold.

Here are the three most common types of boat insurance policies that you could have.

1. Actual Cash Value Policies

An actual cash value (ACV) settlement covers the full cash value of your boat on today’s market. That means that you won’t get what you paid for your boat. Instead, you will get what your boat was worth at today’s market value with depreciation.

Many people with an ACV policy misunderstand this type of coverage. These policyholders often think that their insurance plan will cover the cash price of a replacement model. That is not the case. With an ACV policy, you will only get the price that you could have sold your boat for before the damage occurred.

2. Total Loss Replacement

There are policies that offer you enough to replace your boat. This is called a total loss replacement policy.

With a total loss replacement policy, you get enough money in your settlement to replace your boat with one that is the same as what you purchased. This is more than what you will receive in an Actual Cash Value policy because depreciation is not a factor.

3. Agreed Value Policies

Some boat owners know how much is needed to replace their boat if something happens. If that’s the case with your boat, you might benefit the most from an agreed value policy.

With an agreed value policy, you agree on the amount of your settlement up front. Then, if damage occurs, you know exactly what you will get from the insurance for your boat. These policies are ideal for boat owners who have a smaller boat or a boat with basic features.

Liability is Another Consideration

If you have homeowner’s insurance, you will also want to find out how much liability you have through your policy. Often, there is minimal liability included through homeowner’s policies.

You might need to purchase more to protect yourself from paying large sums of money because of a serious accident or injury.

How Well Are You Covered?

With so many variables, it’s only natural that you’re not sure how you’re covered. Some policies include coverage to your boat. Some do not. Some policies offer a little bit of coverage, but not enough. Others cover the full replacement cost of your boat.

The type of policy you need depends on the type of boat you own.

To make sure you have enough coverage, it is important to talk to your insurance agent. Schedule an appointment today with a McGrath Insurance Group agent to analyze your policy and determine if you have the right coverage for your needs.