Insurance Terms

A general overview of common marine insurance terms follows. You should read your insurance contract for the actual coverage provided by the policy. All policies are different and are subject to definitions, terms, conditions, exclusions, and limits contained in the actual written policy and endorsements to that policy.

Agreed Value Policy

An Agreed Value Policy stipulates the amount of payment to the insured in the event of a total loss to the vessel. You, the insured and the insurance company agree to this amount of insurance at the outset of the policy. The “agreed value” is usually the purchase price of the hull and equipment. In the event of a total loss, the agreed amount is paid without regard to depreciation. For partial losses, reasonable repair or replacement is made without subtracting for depreciation except for certain items such as bottom paint, sails, canvas, fabric, batteries, tires, outdrives, and machinery.

Actual Cash Value Policy

Actual Cash Value policies will apply depreciation at the time of loss or damage. In a total loss situation, usually the settlement is the lesser of the coverage amount or the actual cash value of the property at the time of the loss.

Protection & Indemnity (P&I)

Protection and Indemnity is the most comprehensive form of marine liability.
P&I provides liability coverage for the insured for bodily injury and property damage to third parties, liability to hired crew, defense cost coverage and wreck removal when required by law. Be sure to talk with our representative if you employ a captain or crew, as a yacht policy will usually cover your liability to crew, by endorsement.

Watercraft liability

Watercraft liability provides liability coverage for the insured for bodily injury and property damage.

All Risk

All risk coverage provides coverage for any loss unless it is specifically excluded from the policy. Make sure you read the policy so you know what is covered and what is not as this insurance term is often misunderstood.

Named Peril

A Named Peril Policy provides coverage for only specific losses listed on the policy.


Deductibles can be a cost savings measure. When you take a higher deductible, your insurance premium is less. Deductibles are usually applied when there is partial loss or damage. Depending on the policy terms, a separate deductible may apply when there is a total or partial loss due to a named windstorm.

Also, we have highlighted some core differences in marine insurance coverage. Our representatives are always ready to discuss additional coverages like:

  • Medical payments
  • Personal Effects
  • Uninsured Boater
  • Personal effects
  • Towing