Agreed Value: The Agreed Value is the fair market
value of the vessel that is agreed upon between the insured
and the insurance carrier. Under Agreed Value policies,
if there is a total loss, then the full agreed value is
paid without any depreciation. When there is a partial
loss, the company will replace old equipment with new
to bring the vessel back to its condition prior to the
loss.
All Risk: An All
Risk policy provides very broad coverage. Insurance is
provided for any loss or damage unless it is specifically
excluded.
Deductible: The deductible
is the portion of a loss that is the responsibility of
the insured. There is an inverse relationship between
deductible and premium. The higher the deductible, the
lower the premium. The hull deductible is typically 1%
of the hull value. Credits up to fifteen percent of the
hull premium are available for higher deductibles. Lower
deductibles are assigned for specific equipment such as
personal property, electronics, and dinghies. These lower
deductibles are separated from the hull deductible, and
therefore, reduce your exposure to a loss.
Exclusions: Typical
broad exclusions include dishonest, intentional, and illegal
acts, fraud, wars, seizures, and nuclear radiation. The
marine exclusions include wear and tear, deterioration,
corrosion, osmosis, electrolysis, or design defects. Check
with your agent for a full list of exclusions that apply
to your specific policy.
Lay-up Warranty:
A lay-up period defines the months that the vessel is
out of active service. During the lay-up period the vessel
is out of commission and is not used for any boating activities.
In New England, the typical lay-up period is from November
1st to April 1st. Credits are available for longer lay-up
periods.
Medical payments:
Provides coverage for medical, ambulance, and hospital
costs should someone be injured while boarding, leaving,
or upon your vessel.
Navigational Warranty:
The policy defines the navigational limitations by a navigational
warranty that specifies dates and geographic locations.
For instance, a navigational warranty may limit navigation
north of Cape Hatteras, North Carolina during the hurricane
months of June 1st to November 1st.
Pleasure Use Warranty:
If a policy is written for a pleasure craft then it is
subject to a pleasure use warranty which means the vessel
may not be chartered. Charter endorsements are available
to broaden coverage for commercial purposes.
Protection and Indemnity:
This is the liability portion of the marine policy. Typical
limits range from $100,000 up to $1 million or more. Protection
and Indemnity will cover you if you are sued for negligence,
causing damage to another vessel, or injury to an individual.
It provides protection for property or personal injury
damages to someone other than yourself or a family member.
Under the private pleasure policy, it is not subject to
a deductible.
Seaworthiness Warranty:
The seaworthiness warranty requires that the vessel be
maintained in a seaworthy condition at all times. This
means the vessel must be in good repair so that the vessel
will not be damaged by the normal rigors of the sea.
Uninsured Boaters:
The uninsured boaters portion of the policy provides accidental
bodily injury protection for injuries caused by an uninsured
boater.
