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John G. Alden Insurance Agency
Boston, Massachusetts
Marine Insurance Specialist
Marine Insurance Terminology
- Agreed Value: The Agreed Value is the fair market value of the
vessel that is agreed upon between the insured and the insurance carrier.
Under Agreed Value policies, if there is a total loss, then the full agreed
value is paid without any depreciation. When there is a partial loss, the
company will replace old equipment with new to bring the vessel back to its'
condition prior to the loss.
- Deductible: The deductible is the portion of a loss that is the
responsibility of the insured. There is an inverse relationship between
deductible and premium. The higher the deductible, the lower the premium.
The hull deductible is typically 1% of the hull value. Credits up to fifteen
percent of the hull premium are available for higher deductibles. Lower
deductibles are assigned for specific equipment such as personal property,
electronics, and dinghies. These lower deductibles are separated from the
hull deductible, and therefore, reduce your exposure to a loss.
- Exclusions: Typical broad exclusions include dishonest,
intentional, and illegal acts, fraud, wars, seizures, and nuclear radiation.
The marine exclusions include wear and tear, deterioration, corrosion,
osmosis, electrolysis, or design defects. Check with your agent for a full
list of exclusions that apply to your specific policy.
- Lay-up Warranty: A lay-up period defines the months that the
vessel is out of active service. During the lay-up period the vessel is out
of commission and is not used for any boating activities. In New England,
the typical lay-up period is from November 1st to April 1st. Credits are
available for longer lay-up periods.
- Medical payments: Provides coverage for medical, ambulance, and
hospital costs should someone be injured while boarding, leaving, or upon
your vessel.
- Navigational Warranty: The policy defines the navigational
limitations by a navigational warranty that specifies dates and geographic
locations. For instance, a navigational warranty may limit navigation north
of Cape Hatteras, North Carolina during the hurricane months of June 1st to
November 1st.
- Pleasure Use Warranty: If a policy is written for a pleasure
craft then it is subject to a pleasure use warranty which means the vessel
may not be chartered. Charter endorsements are available to broaden coverage
for commercial purposes.
- Protection and Indemnity: This is the liability portion of the
marine policy. Typical limits range from $100,000 up to $1 million or more.
Protection and Indemnity will cover you if you are sued for negligence,
causing damage to another vessel, or injury to an individual. It provides
protection for property or personal injury damages to someone other than
yourself or a family member. Under the private pleasure policy, it is not
subject to a deductible.
- Seaworthiness Warranty: The seaworthiness warranty requires that
the vessel be maintained in a seaworthy condition at all times. This means
the vessel must be in good repair so that the vessel will not be damaged by
the normal rigors of the sea.
- Uninsured Boaters: The uninsured boaters portion of the policy
provides accidental bodily injury protection for injuries caused by an
uninsured boater.
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