Agreed Value vs. Actual Cash Value: Boat Insurance
The single biggest decision in a boat policy's fine print — how a total loss actually gets paid.
Agreed value coverage locks in your boat's insured worth at binding, backed by an appraisal, so a total loss pays that full amount with no depreciation deduction — the standard approach for a classic or collector boat. Actual cash value (ACV) instead pays market value minus depreciation, which is cheaper upfront but can leave a meaningful gap on an older or well-maintained boat. This is the same underlying choice covered for classic cars and for replacement cost vs. actual cash value on a home — it's a pattern that repeats across nearly every kind of property insurance. Model your own numbers with our Home Insurance Coverage Calculator for the general concept, and see our full Boat Insurance by State guide for how this fits into the bigger picture.
| Key Dimension | Agreed Value | Actual Cash Value (ACV) |
|---|---|---|
| How a total loss is paid | The pre-agreed, appraised amount — no depreciation deducted | Current market value minus depreciation for age and condition |
| Why It Matters: On an older boat, ACV depreciation can leave a payout well below what it would cost to buy a comparable replacement. | ||
| Typical premium | Generally higher, reflecting the guaranteed full payout | Generally lower, reflecting the insurer's reduced exposure |
| Why It Matters: The lower ACV premium is a real trade-off against a smaller total-loss payout, not free savings. | ||
| Appraisal requirement | Usually required at binding to establish the agreed value | Not typically required; value is assessed at claim time instead |
| Why It Matters: Agreed value avoids a valuation dispute exactly when you can least afford one — during a claim. | ||
| Best fit | Classic, antique, or well-restored boats where market comparables are scarce or misleading | Newer boats with a well-established, liquid resale market and predictable depreciation |
| Why It Matters: A boat with thin market data is exactly where ACV's 'market value' becomes the most contestable number in a claim. | ||
Use our open-source actuarial calculators to simulate deductibles, out-of-pocket exposure, and multi-policy trade-offs.