September 2007

Insurance: The Internet Or A Professional?

By Patrick Colgan

Before you buy that new RV or boat, consider the insurance necessary to protect your hard-earned investment.  With a few clicks of the button, you can buy anything these days. 

Why not buy insurance that way also?  If you do, you run the risk of being your own agent.  Are you licensed and up to date on policy changes? Do you want to have personal service or just be a number?

There are many carriers that offer insurance, but it would be in your best interest to find a personal agent who can meet to discuss the various details about your coverages so you are getting what you pay for.  The following would be some considerations on the coverages:

  1. 24-hour support and expert claims service when you need it most,
  2. bundled discount to maximize discounts and simplify your life,
  3. annual professional review to review your policies and needs,
  4. convenient payment options to provide flexibility,
  5. personal property coverage on your vehicle against theft,
  6. trailer and towing coverage to protect the transportation of the vehicle,
  7. total loss — actual cash value or agreed-value option, and
  8. a financially sound company that will be there when you need it.

It is beneficial to understand about the various insurance programs available and opt for those that are the most relevant to one’s situation. Factors that affect the choice of insurance programs include the area of navigation, cost of the boat, cost of maintenance, etc.

Boat owners can select a liability limit that generally ranges from $ 100,000 to $ 500,000. Liability coverage is useful for covering not only the cost of theft, repairs, property damage, etc., but also for paying the attorney fees in the case of having to defend against claims.

The two main types of physical coverage include Actual Cash Value (ACV) and Agreed Amount Value (AAV).

The Actual Cash Value insurance policy provides coverage for the cost of replacing the boat after subtracting the cost of depreciation. If the repair costs exceed the actual costs of the boat, then the approximate book value of the boat is determined by using pricing books.

If the boat is partially damaged, then the amount of money paid to the boat owner is equal to the difference between the total cost of damage and the deductibles.

The Agreed Amount Value insurance policy allows boat owners to insure their boat for an agreed total money value of the boat. This agreed value is the cost of the boat and equipment after allowing for depreciation.

Boat owners can also apply for a Waiver of Depreciation that will allow them to claim full insurance that does not consider depreciation.

Boat insurance should include medical payment protection; this will cover the expenditure incurred on medicines and funeral costs up to the limit mentioned in the policy. It may or may not cover coverage for injuries from an uninsured boater; if such insurance is not provided, then uninsured boater coverage should be obtained.

Towing coverage is also important as it covers the costs of towing/rescue operations that may have to be executed due to mishaps, engine failure, mechanical breakdown, grounding, etc.

In deciding the amount of insurance required, work with a professional to review what a total loss would mean to you. These are very frequent, and hence coverage for total losses should ideally be the minimum amount that a boat owner can pay with ease.

On the other hand, partial losses are fairly common, and thus coverage should be obtained accordingly. It is also worthwhile to consider the fact that a percentage of the insured value is deducted; therefore, if the insured value is less, it reduces the expenses that a boat owner bears from his pockets in the case of a partial loss.

While trying to arrive at a figure for their boat insurance coverage, boat owners must factor in the minimum insurance required by marinas; a minimum of $ 300,000 is required by most marinas.

If you don’t have a personal agent, give me a call to schedule a time to review your policies — Patrick Colgan: (480) 558-8200; e-mail:, or visit