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Ontario Fishing Network
Volume 3,  Issue 4 -  April 2003

Five Tips for Buying Boat Insurance  By Mike Skyba

Buying boat insurance can be challenging for any boater. That's because unlike auto insurance, boat insurance policies are not standardized-coverage can vary widely for the same boat depending on who sold the policy and how informed a buyer you are.

But the smart boater can make the right insurance choices with these "Top Five Tips  for Buying Boat Insurance".

KNOW THE INSURER: Boat insurance can be "added on" to a homeowner's policy, purchased from an independent insurance agent or directly from a marine insurance specialist. Buying a policy through a reputable agent or directly from a marine insurance specialist is the best way to go. "Adding on" to your homeowners' policy may seem to work just fine, but when there's a claim, you will appreciate a company that knows more about boats than homes.  Homeowner's policy often limits or does not provide some of the marine coverage like salvage recovery.

AGREED VALUE vs. ACTUAL COST VALUE: There are two main choices for  boat insurance and depreciation is what sets them apart. An "Agreed Value" policy cost more but it pays more; it will cover the stated value of the policy in the event of total lost. For example, a total lost on a $50,000. Agreed Value policy would pay you $50,000. More importantly, a partial lost an Agreed Value policy replaces most items on a "new for old" basis-with little or no depreciation, depending on the carrier. Hence, a claim for a stolen four-year-old GPS would get you a new, comparable replacement GPS.

"Actual Cash Value" policies cost less but only pays up to the actual cost value at the  time the boat or property were lost-depreciation is factored in all losses. Actual Cash Value policies are better suited to less experience boats or when you are not  concerned about total lost.

 KNOW THE SALVAGE TRUTH: If you have chosen an "Agreed Value" policy, stay away from those that limit salvage coverage-that's the amount that may be paid to a  salvor to reward him from saving your boat from peril and bringing it safely to a repair yard. You want a policy that provides salvage coverage up to the amount as the boat's Agreed Value, and does not subtract these dollars, or the policy's deductible from the  total amount available to fix the damage.

For example, a $50,000 Agreed Value policy should have $50,000 avaible to salvage  the boat from the bottom of the lake/ocean and than pay up to $50,000 for repairs. Other wise, you could end up short when replacing or repairing the boat because you may have to use some of your repair funds to pay off the salvage cost first. Boats added to a homeowner's policies most often run this risk.

SPEAK TO ME IN A LANGUAGE I CAN UNDERSTAND: Make sure you understand  exactly the coverage you are getting, as well what's not covered? Always ask for an explanation in layman's terms.

ONE SIZE DOES NOT FIT ALL: Have an old, trusty, paid-off sailboat? Spanking new  (and highly leveraged) 36-foot express cruiser? Slick and fast bass boat? Personal watercraft? Each has its own insurance requirements. A good insurer will walk you through a list of questions so you will not have to guess the answers when something unexpected happens.

Taking courses in Safe Boating put on by some organizations like the Canadian Power Squadrons can offer insurance discounts.  Talk to other boat owners about recommending a reputable and reliable insurance company.

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