When you own a boat in Folsom, CA, you want to ensure it’s appropriately insured. There are two main types of boat insurance policies: replacement cost and actual cash value. It is imperative that you understand the difference between the two, as the policy you choose will determine how you are compensated following a covered loss. Many people aren’t familiar with the difference between these two policies, which is why T.D. McNeil Insurance Services is taking the time to explain below.
Replacement Cost Policies
A replacement cost boat insurance policy is not going to take depreciation into account. This type of policy will simply determine the value to repair/replace your boat after damage without adjusting for depreciation. In other words, you will be reimbursed for the amount it takes to cover the damage to your vessel, regardless of whether your boat was worth less at the time of the incident.
Actual Cash Value Policies
An actual cash value boat insurance policy is going to take into account depreciation. This type of policy will determine the value to repair/replace your boat and then reduce that determined amount by the depreciated value as determined by the vessel’s age. Therefore, in the event of a total loss, you will only receive what your boat was worth at the time of the incident and nothing more.
Limits and Deductibles
Regardless of the type of policy you have, you are likely to be subject to a deductible. In addition, there are still policy limits that cannot be exceeded.
If you need help understanding your current policy or are in the market for boat insurance, reach out to our team at T.D. McNeil Insurance Services. Serving the Folsom, CA area, we are happy to help you understand both types of boat insurance coverage and help you determine which one is best suited for your situation.