Insurance coverage · FL, TX · 11 min read
Agreed Value vs Actual Cash Value Boat Insurance
On a $380,000 cruiser, see how agreed hull value differs from depreciation-settled total loss checks—and why lenders care which box you select.
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Total loss payout comparison
Agreed value $450,000 hull with 5% named-storm deductible pays $427,500 on total loss wind claim if coverage applies.
ACV policy on same boat year 4 with 18% compounded depreciation model might value hull at $240,000–$280,000 market—payout near that minus deductible, leaving $170,000+ gap versus loan balance.
Lenders require agreed value or replacement cost endorsements on $250,000+ notes—ACV policies fail collateral tests.
Premium delta agreed vs ACV on $400,000 hull often $350–$700 annually—a small cost next to the depreciation gap.
Partial loss depreciation schedules
ACV partial claim on $12,000 bimini replacement year 5 might depreciate 40% ($4,800) paying $7,200—agreed value form may pay full replacement minus deductible.
Electronics schedules depreciate faster—$25,000 MFD stack year 3 ACV payment could be $15,000 while agreed value pays equipment sublimit.
Outboard motors on ACV policies age per hour and year—re-power credit disputes common when adjusters apply engine depreciation tables.
Keep upgrade invoices to fight ACV adjustments—without receipts, adjusters use generic depreciation curves.
Lender and loan balance alignment
Loan balance $380,000 with ACV payout $260,000 after total loss leaves $120,000 deficiency plus lost boat—GAP products rare in marine; agreed value reduces deficiency risk.
Renewal time: lowering agreed value to save premium can breach loan covenant requiring insurance ≥ outstanding principal.
Florida and Texas coastal wind losses amplify ACV pain—named-storm deductible applies to reduced ACV base, double hit.
Document agreed value updates after refit—$80,000 engine upgrade should raise agreed value or partial loss under-insures.
Sources
- GEICO Marine — Named storm deductible FAQ — GEICO Marine Insurance
- NMMA — Boat buying resources — National Marine Manufacturers Association
Questions
Can I switch from ACV to agreed value mid-term?
Usually at renewal with survey or valuation—mid-term upgrade may require inspection.
Does agreed value cover salvage?
Insurer may reduce payout by salvage value retained—read total loss settlement clause.
Are tenders covered the same as hull?
Often separate sublimit—depreciation on ACV tenders mirrors age of hull policy form.