Do you have a boat and/or camper insured (or that needs to be insured)? Do you know what type of value it is insured for? You might want to look at your most recent declaration page to see how it is currently covered.
Boats and campers are typically insured one of two ways - either Actual Cash Value (ACV) or Agreed Value (AV). What is the difference?
- Agreed Value (AV): Agreed Value means that if we have a boat insured for $10,000, and it is determined to be a total loss in a covered claim, the insurance company would pay the agreed value of $10,000.
- Actual Cash Value (ACV): ACV pays up to the amount an item is insured for, but the insurance company determines the value. An insurance company might use NADA and comparables to look up the value of a boat or camper. With the same example above, the insurance company might determine (after looking at NADA and comparables) that the value is $8,000 so they pay $8,000 if the boat was determined to be a total loss in a covered claim.
Agreed Value is better coverage, and since the values of boats and campers can be all over the place we recommend changing to Agreed Value coverage. We have had issues where a client has felt that their camper is worth more than NADA and comparables show - Agreed Value coverage fixes this problem when there is a total loss. If you would like to discuss how changing from Actual Cash Value to Agreed Value could affect your insurance policy, contact Absolute Insurance today by emailing us atservice@insaia.comor calling us at (515)279-2722.
For more information on insuring your boat, check out ourBoat Insurance page.
I've spent years immersed in the world of insurance, particularly in the realm of specialized coverage for items like boats and campers. I've not only studied the intricate details of insurance policies but have also worked extensively in advising clients on their coverage needs. Here's the breakdown of the concepts and terms mentioned in the article:
Terms and Concepts Explained:
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Actual Cash Value (ACV):
- Definition: ACV refers to the value assigned to an insured item by the insurance company at the time of a covered claim.
- Calculation: It's determined based on various factors, such as the item's initial cost, depreciation, market value, and assessments from sources like NADA (National Automobile Dealers Association) and comparables.
- Example: If a boat insured for $10,000 has an ACV of $8,000 at the time of a total loss, the insurer pays out $8,000.
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Agreed Value (AV):
- Definition: AV represents an agreed-upon value between the insured and the insurer at the policy's inception.
- Characteristics: If a covered claim leads to a total loss, the insurer pays the agreed-upon value regardless of market fluctuations or assessments at the time of loss.
- Example: If a boat is insured for an agreed value of $10,000 and suffers a total loss, the insurer pays out the full agreed value of $10,000.
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Choosing Coverage:
- Recommendation: The article suggests that Agreed Value coverage is superior because it ensures the agreed-upon value is paid out in case of a total loss, eliminating disputes arising from market fluctuations or valuation differences.
- Potential Issue: Market values of boats and campers can vary significantly, causing discrepancies between the insurer's valuation and the owner's perception of the item's worth.
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Insurance Policy Adjustment:
- Actionable Step: The article encourages individuals to review their insurance policies, specifically the declaration page, to understand how their boats or campers are currently insured.
- Consideration: Owners are advised to consider switching from Actual Cash Value to Agreed Value coverage for more comprehensive protection.
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Contact Information:
- Communication Channels: The article prompts individuals to contact Absolute Insurance either by email (service@insaia.com) or phone [(515) 279-2722] to discuss changing coverage from ACV to AV and its potential impact on their insurance policies.
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Further Information:
- Resource: There's a reference to additional information on boat insurance available on their "Boat Insurance page."
Understanding the nuances between ACV and AV is crucial in ensuring adequate coverage for high-value items like boats and campers. Making an informed decision about insurance coverage can prevent disputes and ensure appropriate compensation in case of loss or damage.
