By Core 4 Insurance Team · Licensed Florida Insurance Agency · Miramar, FL
On a total loss, agreed value pays the figure on your declarations page; actual cash value pays what an adjuster decides the boat was worth that day. You’ll see when the cheaper basis is a fair trade, why canvas, sails and trailers can still depreciate, and which “stated value” wording to question.
Most boat owners choose between agreed value and actual cash value once, at purchase, based mainly on the premium difference. Then they never think about it again until the boat is gone.
That is exactly backwards. The valuation basis is the single term that decides what a total loss pays, and in Florida total losses are not rare events.
What is the difference between agreed value and actual cash value?
The short answer: Agreed value pays a figure you and the carrier set in writing when the policy starts. Actual cash value pays the boat's market value at the time of the loss, which reflects depreciation, age and condition.
| Agreed value | Actual cash value | |
|---|---|---|
| Total loss pays | The amount agreed when the policy was written, less the deductible | Market value at the time of loss, less the deductible |
| Depreciation on a total loss | None — the figure is fixed | Yes — the boat's age and condition reduce the payout |
| Partial losses | Often repaired new for old, with some items depreciated | Depreciation generally applies |
| Premium | Higher | Lower |
| Setting the value | Purchase price, survey or valuation guide, agreed in advance | Determined after the loss |
| Surprises at claim time | Few on a total loss | The market value figure itself |
General structure of how these terms are commonly written. Your policy language governs, and carriers define both terms in their own forms.
What does each one actually pay when a boat is totaled?
The short answer: Agreed value pays the figure on your declarations page. Actual cash value pays what an adjuster decides the boat was worth that day, which on an older boat can be tens of thousands of dollars less.
Take an illustrative example. You bought a used center console for $80,000 three years ago and insured it for that amount.
| Basis | What the settlement is based on | Illustrative payout |
|---|---|---|
| Agreed value | The $80,000 agreed at purchase | $80,000 |
| Actual cash value | An adjuster's market value for a three-year-older boat of that model and condition | Whatever that market value is — for example, $58,000 |
Illustrative arithmetic only. Actual cash value settlements depend on the model, condition, equipment and comparable sales at the time of loss.
The gap is not a penalty. It is the depreciation the actual cash value owner accepted in exchange for a lower premium. The problem is that most owners never price that trade until they are living it.
How do partial losses work under each basis?
The short answer: Under agreed value, most partial losses are repaired new for old, minus the deductible. But many agreed value policies still depreciate items such as canvas, sails, trailers and some machinery. Under actual cash value, depreciation generally applies throughout.
This is the detail that catches agreed value owners by surprise. "Agreed value" describes the total loss figure. It does not always mean every part of every claim is paid at replacement cost.
- Canvas and enclosures. Often depreciated by age, because they wear out on a predictable schedule.
- Sails. Frequently depreciated, which matters a great deal on a sailboat.
- Trailers. Often depreciated or sublimited.
- Some machinery. Engines and outboards may carry depreciation schedules on some forms.
- Everything else. On most agreed value forms, repaired or replaced new for old, less the deductible.
Is actual cash value cheaper, and is the saving worth it?
The short answer: Actual cash value is generally cheaper, because the carrier's exposure falls every year the boat ages. Whether that is worth it depends on how much of the boat's value you could afford to lose in a total loss.
The premium difference is real, and on an older, lower-value boat it can be sensible to take it. The question to ask is not "how much do I save a year" but "how big is the gap on the day the boat is totaled, and could I absorb it?"
- A useful test. Estimate the gap between what you would want paid and what the boat would likely fetch today. That gap is what actual cash value leaves you holding.
- Financed boats. If you owe more than the boat's market value, actual cash value can leave you short of paying off the loan.
- Low-value older boats. When the market value is modest and you own it outright, the saving may be worth the risk.
- Liability is separate. The valuation basis affects only the boat. Your liability coverage does not change with it.
How valuation fits alongside storage, deductibles and other price levers is covered in how much boat insurance costs in Florida.
Which should you choose for your boat?
The short answer: Agreed value for newer boats, financed boats, restored boats and anything you could not afford to lose at a depreciated price. Actual cash value can make sense for an older, low-value boat you own outright.
New or nearly new boat
Depreciation is steepest early. This is when the gap between the two bases is widest.
Financed boat
Protects against owing more on the loan than an actual cash value settlement pays.
Restored or classic boat
Market tables undervalue restoration work. Document it and agree the figure.
Sailboat
Choose agreed value, then read the sail and rigging depreciation terms closely.
Older, low-value boat owned outright
If a depreciated payout would not hurt, the premium saving can be reasonable.
Boat in a coastal wet slip
Hurricane total-loss exposure makes the valuation basis the term most likely to be tested.
General guidance, not advice for a specific vessel. Carrier eligibility for agreed value can depend on the boat's age, condition and survey.
How is an agreed value set, and how do you keep it right?
The short answer: From the purchase price, a marine survey or a published valuation guide, agreed with the carrier in writing. It stays fixed until you change it, so review it at every renewal and after any upgrade.
An agreed value protects you from depreciation arguments. It does not automatically follow the market, and it does not reward over-insuring.
- Newer boats. Usually set from the purchase price and bill of sale.
- Older or higher-value boats. Many carriers ask for a marine survey before agreeing a value. The threshold varies by carrier.
- After upgrades. New engines, electronics or a refit change the value. Tell the carrier and document it.
- At renewal. Values move with the used boat market. A figure set years ago can be too high or too low.
- Keep the records. Photographs, receipts and the survey belong somewhere other than on the boat.
Can you get agreed value coverage on an older boat?
The short answer: Often, but with conditions. Many carriers ask for a recent marine survey on older boats, some offer agreed value only up to a certain age, and some move older boats to actual cash value automatically. The age limits are set by each carrier, not by Florida law.
Older boats are where valuation decisions get made for you if you are not paying attention. A renewal notice can quietly change the basis on a boat the carrier now considers too old for agreed value.
- Expect a survey request. A survey documents condition and supports the value you want. Keep it current and keep a copy off the boat.
- Read every renewal's declarations page. Confirm the valuation basis has not changed from the year before.
- Ask where the carrier's line is. If you are close to an age threshold, knowing it lets you shop before the change instead of after.
- Consider the market tier. Some carriers write older vessels that others decline, including on agreed value. That is a reason to compare, not to accept the first answer.
- Refits count. A repower, new wiring or a documented restoration can support a higher agreed value on an older hull.
Where carriers tend to sit on older vessels is covered in our guide to the best boat insurance in Florida.
Why does the valuation choice matter more in Florida?
The short answer: Because hurricanes produce total losses in large numbers, and the total loss is where agreed value and actual cash value differ most. A Florida boat is more likely than most to have its valuation basis tested.
In most states, a total loss is an unusual event: a fire, a theft, a serious collision. In Florida, a single named storm can total a large number of boats in a week.
Two Florida rules make the total loss more expensive still. Your named storm deductible is often a percentage of the boat's insured value, and if the boat becomes derelict, Florida law makes you pay for its removal. Neither of those changes with the valuation basis, but both land at the same moment the valuation basis is decided.
How the named storm deductible and wreck removal work is covered in hurricane haul-out and boat insurance in Florida.
What if a policy uses a different term, like stated value?
The short answer: Ask exactly how a total loss is settled. Some forms described as "stated value" pay the lesser of the stated amount or actual cash value, which brings back the depreciation argument agreed value is meant to remove.
Valuation language is not standardized across carriers. A figure printed on the declarations page is not proof that it is the figure you will be paid.
- Ask: "On a total loss, do you pay this figure, or the lesser of this figure and actual cash value?"
- Ask: "Which items do you depreciate on a partial loss?"
- Ask: "What do you need from me to support this value if it is questioned?"
The same distinction applies to collector cars, where it catches owners just as often. We cover it in classic and collector car insurance in Florida.
The bottom line on agreed value vs actual cash value
Actual cash value is cheaper because it pays less when the boat is lost. That is a fair trade on an older boat you own outright and could afford to lose at a depreciated price. It is a poor trade on a newer, financed or restored boat.
Agreed value is the better default for most Florida owners, but read it closely. Know which items it still depreciates, keep the value documented, and update it at renewal.
In a state where a single hurricane can total boats by the thousand, the valuation basis is the line on your policy most likely to be tested. Call (954) 420-1501 and we will compare valuation terms across the market. Disponible en español.
More Florida boat insurance guides.
- Best boat insurance in Florida — which carriers offer strong agreed value terms
- Is boat insurance required in Florida? — what lenders and marinas expect
- The Florida Boat & RV Owner's Insurance Guide — every recreational vehicle in one place
More from our Florida insurance library
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About this guide
Who wrote it. Written and reviewed by the Core 4 Insurance team — licensed Florida insurance producers based in Miramar, Broward County, a short drive from the Fort Lauderdale and Miami boating markets.
Where we work. Statewide across Florida, with our office and deepest local experience in Broward, Miami-Dade and Palm Beach counties.
How we source it. Descriptions of how agreed value and actual cash value policies handle total and partial losses, including items commonly depreciated on partial losses, reflect published marine insurance guidance from the National Boat Owners Association and carrier materials. Derelict vessel rules trace to Fla. Stat. § 823.11. All dollar examples are illustrative arithmetic, not quotes.
Regulator. Core 4 Insurance is licensed by the Florida Office of Insurance Regulation.
Last reviewed by the Core 4 Insurance Team on September 22, 2026. Valuation terms vary by carrier and change between policy forms. We re-verify this guide quarterly. For the broader picture, see our guide to the best boat insurance in Florida.