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Agreed value or market value?
Short answer
Agreed value fixes the sum in the contract before anything happens. Market value works it out afterwards, when the boat is gone and the argument is about what it was worth.
Every hull policy answers one question somewhere in the wording: if the boat is a total loss, what is it worth. An agreed value policy answers it in advance. The figure is written into the contract, both sides accept it when the cover starts, and it is what gets paid. A market value policy answers it afterwards, by working out what an equivalent boat would have cost on the day of the loss, with age and condition taken into account. The second approach is not unreasonable, but it moves the conversation to the worst possible moment.
The practical difference shows up in two places. On a well maintained older boat, a market valuation tends to sit below what the owner would need to replace it, because a boat kept properly is worth more than its year suggests and a table does not know that. And after a refit, new rigging, new engine, new electronics, the money spent rarely appears in a market figure at all. Owners who have just invested a serious sum are exactly the ones who should check which system their policy uses.
Whichever system applies, the evidence is built at purchase, not after the loss. Keep the bill of sale, the invoices for engine, rigging and electronics, the declaration of conformity and a set of photographs taken from several angles, and keep them somewhere other than on board. If your policy works on an agreed value, revisit the figure after a refit or a change in the market rather than letting it stand for a decade. If it works on market value, ask what evidence the insurer will expect and collect it now. With us the agreed value applies from Basis Plus; for boats over five years old only while the current value still reaches half the sum insured and replacement is proven. Premium has no age limit, and Basis pays the current value with an age deduction.
Worth remembering
Before
is when an agreed value is settled
After
is when a market value is argued
The same boat, the same loss, and a difference that only appears once you can no longer influence it.
Questions
What owners ask us about this
What does agreed value mean?
The sum insured is fixed in the contract when cover starts and is the basis for settling a total loss, instead of being calculated afterwards from age and condition.
How do I prove what my boat is worth?
With the bill of sale, invoices for engine and equipment and a recent survey if you have one. Photographs from several angles help more than owners expect.
Does a refit change the figure?
It should. New rigging, a new engine or new electronics raise what it costs to replace the boat, so tell your insurer rather than discovering the gap later.
What about partial damage?
That is a separate clause. Look for how deductions for new parts replacing old ones are handled, because that is where two similar policies part company.
Related
Not sure whether you qualify?
Whether it is “Agreed value or market value?” or another question: send us your residence and the flag your boat flies. You will get a straight answer in one email; including a no, if that is the answer.
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