Boat insurance is a must for anyone who is owns a boat. Pleasurecraft over certain sizes (which varies from Insurer to Insurer…so check your policy) are not covered under general home insurance so taking out a separate policy is essential to ensure your prized possession is covered in the event of damage or theft.
Boats can be extremely valuable, especially if they are rare or unique so it’s important to make sure that your boat is ensured for the full amount that it’s worth (i.e. what it will cost to replace), not just what you paid for it. In instances where boat owners have managed to get a great deal on a rare or unique boat we would always recommend they insure their boat for replacement value, and not what they paid for it.
Insuring your boat for the replacement value means that in the event you need to replace it, you will be able to purchase another similar boat or one of equal value.
What to know about claiming for a rare or unique boat
If your boat is truly unique, its rarity may present a few challenges when it comes to claim time, especially if the boat is stolen. Because insurers go on market value when determining what settlement to make, if they can’t find an exact match it is difficult for them to assess the boat’s value. A lot of trouble, to-ing and fro-ing, and possible misunderstandings with the Insurer can be avoided if you ensure that you keep your records of purchase, schedule of accessories, market appraisals, and certainly a lot of photographs that can show the Insurer exactly what the loss actually is. This should assist the Insurer in assessing the loss fairly and offering to settle for the boat’s actual replacement value.
We had a recent case where a rare boat that was worth $13k and purchased for $9k was insured for the higher amount. Unfortunately the boat was stolen and the insurer struggled to find an exact match. The closest they could find was valued at $10,500 so this is what they offered our client.
Luckily we advised the client to decline the offer and worked with them to find a quote and other documentation that verified the boat’s sum insured. By submitting documentation that verified the correct replacement value to the insurer we were able to get a payment for our client of the higher amount.
This is something to be aware of if you have a boat that is insured at a higher amount than you paid for it, and especially if it is rare or unusual.