My Geico marine policy has a deperciation clause for boats older than 20 years of 10% per year.
Since my boat was built in 2001 I will have to deal with that year after next. My tactic will be to get ahold of their underwriting department and negotiate the removal of the depreciation language. It might cost me but that is an important exclusion. I am pretty sure I will be successful, but if for some reason I am not, at that point I’ll be taking my business elsewhere.
Negotiating with an insurer is not that difficult. All you have to do is ask. I have done it with my current policy removing a ice exclusion, which was unacceptable to me since I live in snow country and snow loading due to a sudden storm is a risk I am not willing to assume.
Remember that the insurance company wants your continued business as a good customer, and approach negotiations with that in mind.
Here's where depreciation can hit you hardest. It's not in a whole boat loss where you should have a depreciated market value anyway. It's partial losses where you need to get new parts to replace old.
Here are some of the most common areas to look for on policies.
1. Market value or agreed fixed value. While market may seem fair, ultimately it's "whose market" and can be a matter of a great deal of contention deciding the depreciated value of the boat.
2. All risks. Simply what it says. Or are there exclusions? What about implied warranty of seaworthiness. Think of new boat, hull delamination as you cross to the Bahamas (think many Bertrams did this 10-20 years ago). Insurer says "not covered. We assumed it was seaworthy." In addition to seaworthiness, another issue often found is latent defects.
3. Deductibles for different things. We often discuss named storms but some policies have lower or no deductible for things like lightning or fire or even total losses. Get alternative deductibles quoted. We have $100 deductibles on our cars with $0 for Comprehensive deductible. Not because we wanted such low deductibles and not to file small claims but because the price was so little difference that if we filed one claim every ten years we'd come out ahead.
4. Depreciation or New for Old. If new parts are required for repair will the policy cover them or only pay portion due to depreciation.
5. Liability to third parties and for environmental.
6. Towing and salvage. Towing in the event of an accident falls under your insurance policy not a tow membership. Towing due to mechanical issues does not. However, towing and salvage can be large amounts quickly. Bad insurance can leave you hostage to the tow company. Also, in the case of a total loss, do you get full amount or do they pay salvage first and reduce your amount.
7. Areas of navigation. Also, operators who are covered. What about accidents on land such as dropping from travel lift.
