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There are many more differences than there are similarities between boat and automobile insurance; including how a physical damage (comprehensive and collision) claim is settled. A claim on a boat is settled differently than how a claim is settled on an automobile.

First, we have to determine if the loss is a partial loss or total loss. A partial loss is when the boat or automobile has been damaged but can be repaired. A total loss is when they have been destroyed or the cost to repair exceeds their value.

Partial Loss

When an automobile sustains a partial loss, the insurance company simply pays for the damage less the deductible. A partial loss on a boat may be subject to depreciation. If an automobile has $3000 in repairs with a $250 deductible, the insurance company pays $2750. If a Boat has $3000 in repairs to an aged stern-drive subject to 50% depreciation, the insurance company would pay $1250 ($3000 loss less $1500 depreciation less $250 deductible).

Total Loss

A total loss to a boat insured using agreed amount is not subject to depreciation. If the boat is insured for $100,000, the insurance company will pay $100,000. A total loss to an automobile is subject to the depreciated market value. The insurance company will pay the depreciated value of the automobile at the time of the loss.

Partial Loss
Automobile No Depreciation – Boat Subject To Depreciation.

Total loss
Automobile Subject To Depreciation – Boat No Depreciation.

It Is Not Just Boat Insurance!

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3 Responses to Boat vs Automobile Insurance

  1. Tim Shealy says:

    Well informed and thanks for the explanations of losses.

  2. WALKER LEE says:

    Question, will liability from your boat
    insurance policy follow you to a rented or borrowed boat? Physical damage?

  3. Larry Tencer says:

    Well done and will share with clients.

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