Agreed value settles one kind of claim. Most claims are the other kind.
Agreed value determines what you are paid if the boat is a total loss. That is the whole of what it does, and it is genuinely valuable, because a total loss on a boat you have owned for years is exactly where depreciation hurts most.
But total losses are the minority of claims. Far more often a boat comes back from a claim repaired: an engine, a section of hull, electronics, canvas. And on those claims, depreciation is frequently still applied even under a policy labeled agreed value. Owners who think they bought new-for-old protection on everything find that out with a bill in hand.
What each term means
Agreed value means the insured value is set when the policy is written and paid on a covered total loss, without depreciation applied to the hull.
Actual cash value means the settlement reflects the vessel’s depreciated value at the time of loss, determined by the carrier rather than agreed in advance.
Agreed value costs more. That part is simple and true.
Most agreed value policies are not agreed value throughout
This is the part worth reading carefully.
A policy can be agreed value on the hull while applying depreciation schedules to other components by age. Outboard motors are the common one. Canvas, covers, upholstery, sails, and batteries are frequently on their own schedules too, sometimes with a percentage deducted per year past a certain age.
So a fifteen-year-old boat with engines repowered three years ago may settle very differently than the owner expects, in either direction. The hull is paid at the agreed number. The outboards may be paid at a depreciated figure that has nothing to do with what a replacement costs today.
Read the valuation section of the policy rather than the label on the declarations page. The question to ask is not whether the policy is agreed value but which parts of the boat it is agreed value on.
Partial losses are where this actually shows up
Because most claims are partial, the depreciation schedules do more work than the total loss provision ever will.
A lower unit destroyed in a grounding, a canvas enclosure shredded in a storm, an electronics package taken in a theft: each of those runs through whatever schedule applies. On a well-written policy the depreciation is modest and predictable. On a cheaper one it is substantial and buried.
This is also the difference that rarely shows up when comparing two quotes on price, because both say agreed value at the top.
Insuring it high is not the answer
Agreed value is a number you and the carrier agreed on, not a ceiling you should push.
Two things happen when the number is inflated. The named storm deductible is usually a percentage of the insured value, so raising the value raises the deductible you pay on every storm claim. And the threshold at which a carrier declares a constructive total loss is tied to the insured value, so an inflated number makes it more likely the boat is repaired rather than totaled, which is not always what an owner wants after a serious loss.
The goal is an accurate number, not a high one. That is a different conversation from the one most owners expect to have.
The number goes stale on its own
An agreed value set at purchase and never revisited is wrong by the time it matters on most boats.
Repowering, electronics, a tower, upgraded seating, and custom work all add real replacement cost, and none of it updates the policy. The reverse also happens: a boat insured at its purchase price through a soft market may be carrying a value the carrier will question at claim time.
Photographs, receipts, and a current survey are what make the number defensible. Keep them.
How actual cash value is actually determined
If you are on an ACV policy, it helps to know what the carrier is looking at: comparable sales, published valuation guides, the vessel’s age and hours, its condition, and its maintenance history.
That is a range rather than a fixed figure, and it is negotiable in practice. An owner with a recent survey, documented maintenance, and receipts for upgrades is arguing from a much stronger position than one with a phone full of sunset photos. Documentation is worth more on an ACV policy than on an agreed value one, precisely because the number has not been settled in advance.
If the boat is financed, look at the gap
On an ACV policy, the settlement can come in below the loan balance, and the difference is the owner’s to pay on a boat that no longer exists.
There is no widely available marine equivalent of the gap coverage familiar from auto lending, so this is worth raising with your lender rather than assuming a product exists to solve it. For a financed vessel, agreed value usually makes the case for itself on this point alone.
When actual cash value is the right call
Agreed value is not automatically correct, and anyone who tells you otherwise is not being straight with you.
For an older boat of modest value, owned outright, where the owner understands the trade and would rather put the premium difference elsewhere, ACV is a reasonable choice. The physical damage settlement is the part being economized on, and that is a defensible decision.
What should not be economized on is liability, which is unaffected by either valuation method and is the coverage that can reach assets well beyond the boat. That is covered in Do Florida Boat Owners Need Umbrella Insurance?.
Worth confirming on your current policy
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Whether the policy is agreed value on the hull only, or throughout
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What depreciation schedules apply to outboards, canvas, covers, and machinery
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How partial losses are settled, separately from total losses
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Whether the insured value reflects repowering, electronics, and upgrades
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Your named storm deductible as a dollar figure, given the insured value
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Whether you have a current survey, photographs, and receipts on file
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If the boat is financed, whether an ACV settlement could fall short of the loan balance
The label is not the policy
Atlantis Insurance is an independent agency in Stuart serving boat owners across the Treasure Coast, Palm Beach County, and Florida’s west coast. Two policies can both say agreed value and behave very differently on the claim you are most likely to have. Valuation is also only one of the provisions that decides a marine claim, and the rest are covered in High-Value Boat Insurance in Florida.
Send us the policy and we will tell you what it actually pays, on both kinds of loss.
Atlantis Insurance Inc 850 NW Federal Highway, Suite 129 Stuart, FL 34994 561-983-4333
