insurance

6 things to know about boat insurance

Unlike home and auto, a boat policy may allow you to "lay up" or suspend coverage for specified periods when you're not using the boat.

"Sometimes boaters aren't aware of that and (on) some nice day in November, they take the boat out for the day and have an unfortunate incident, only to find out that their boat was to be out of the water from Oct. 15 to April 1," says Cyr.

How do 'agreed value' and 'market value' policies differ?

"A boat is a lot like a car. The moment you drive it off the lot, it starts depreciating," says Cyr.

To help boaters save money on insuring older vessels, insurers offer the option of "agreed value" (think sticker price) versus "market value" (think depreciation) in the case of a total loss.

"With agreed value, the insured and insurer agree on the value of the boat upfront. If something happens to the boat, you're going to get paid up to the agreed value," says Jawitz.

"With market value, the boat depreciates; so if the boat is destroyed, you're going to get enough money to replace the boat's (current) value. If you bought the boat in 2005, you're not going to get enough money to buy a 2011 model; you're going to get enough to buy a 2005 model," he says.

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Like most insurers, Travelers offers a steep discount (25 percent) with market value policies.

"Owners of newer boats typically go with agreed value. As the boat ages and the value depreciates, and they don't have a loan on the boat, you'll see them switch to cash value," Cyr says.

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