Actual Cash Value and Agreed Value
Thursday, February 12th, 2009
One of the important things you should consider in getting marine insurance is whether to get Actual Cash Value or Agreed Value.
Here’s the difference.
Actual Cash Value is simply mean that the boat’s actual value at the time it was destroyed, damaged, or repaired. Depreciation is always factored in, so you will probably get less. However, Actual Cash Value marine insurance policies are cheaper and more affordable, so if your boat isn’t that that expensive, then this could be the recommended choice for you.
Agreed Value, on the other hand, is more expensive. When you sign the policy, there is a preset amount on your boat, and in the event of a total loss, the insurance company will pay you the full amount stipulated in the policy. The same goes with replacing equipment – new parts are covered and installed without any further ado.