Boat, RV & Powersports

Agreed value, lay-up credits, and where auto coverage stops

The most important choice on a recreational policy is the valuation basis. Actual cash value depreciates the machine every year and pays what it was worth the day before the loss. Agreed value fixes the payout in advance, at a number you and the carrier settle on when the policy is written. For a restored classic, a customised bike, or a boat with a lot of aftermarket electronics, agreed value is usually the only settlement that reflects what you actually have — and the accessories generally have to be listed for that to hold.

Seasonal use is priced into these policies. Lay-up credits reduce premium for the months a boat is out of the water or a bike is off the road, on the understanding that it is not being operated. Comprehensive coverage normally continues during lay-up, so theft and storm damage in storage are still covered. Cancelling outright for the winter to save the premium leaves the machine bare in the months when it is most likely to be stolen or crushed by a falling limb.

Towing is the boundary people misread. While a trailer is hitched to your truck, liability arising from the towing generally follows the truck's auto policy, but physical damage to the trailer and to what is on it does not — that needs to be scheduled on the recreational policy or the auto policy explicitly. Once the boat is in the water or the side-by-side is off the trailer, the auto policy is done and the recreational policy is doing all the work.

Two coverages worth naming: uninsured and underinsured motorist on a motorcycle, because the injuries are severe and the at-fault driver is often carrying minimums; and passenger liability plus wreck removal on a boat, because the cost of raising a sunken vessel is a real number that surprises owners. Navigational limits also matter — most hull policies define a geographic area, and running outside it can suspend coverage.