Ins and Outs of Boat Insurance – Advocating for Owners

What do you do when your engine is still under the manufacturer's warranty, and after experiencing a covered failure, your insurance company only offers to use a remanufactured gearcase or requires your repair shop to rebuild yours, rather than replacing with a factory-new unit?

There are great insurance companies and there are others.

There are companies who offer special policies for lower units as their way to help the consumer get the claim paid, as mechanical failures are not covered, though sometimes it is not easy to tell which came first – the chicken or the egg. This is why we are here, to advocate for the customer and to help guide the direction of the settlement via real facts and evidence – not opinion!

Once the decision is made to pay the claim, it is important for the owner to understand that there are several types of policies.

Actual Cash Value: This is a depreciating policy based on how long the unit has been in service.

Another type is Replacement Cost: Usually applicable only on new units and costs a little more, yet you get a whole lot more.

Agreed Value: This one is more for the boat-engine-trailer package, not just then engine. The most important thing to remember is the boat, engine and trailer are covered separately.

Some insurance companies prefer to go the least expensive route and this is where things can get interesting.

Let's say you have more than a year’s warranty remaining on the engine (maybe five or six years when purchased) and the lower unit is rebuilt using factory parts with a one-year warranty on parts and labor. Who covers the remaining portion of the warranty – the insurance company, the engine manufacturer, or you?

The answer is the consumer. The insurance company is not going to honor the manufacturer's warranty.

The myth here of "having the dealer do it with the manufacturer’s parts" does not make this a new unit. Rebuilding it still makes this a rebuilt unit and this will only carry the replacement parts warranty. The manufacturer offers the base warranty and extended warranty on a sealed unit, built by the factory.

No one thinks about insurance – until the time comes to use it. Ask your agent about your policy and about any type of exclusion. Meaning, if you are past the line of demarcation, are you covered? Inland lakes, rivers and streams, are you covered?

Buying insurance on line can be quicker and cheaper, though sitting across from your agent who can explain everything can be far more informative and satisfying.

Have a great spring fishing and boating season, and thank you for your business!

Chris Mapp

Coastal Bend Marine – Port O’Connor, TX – 361-983-4841