Hello, Doug. This is Clyde at NBOA. Actual cash value policies apply depreciation to losses. Agreed value policies may apply depreciation to losses for items such as canvas, batteries, sails, curtains, etc, but total losses are settled at the face amount of the policy, without depreciation, regardless of the value of the boat at the time of the loss. No matter what the face amount of coverage is on an actual cash value policy, a total loss is settled at the value of the boat at the time of the loss. For the companies that I represent, partial losses that don't involve the items listed above are also settled on a replacement basis until your boat is over 7 years old. After 7 years, depreciation is applied to losses involving outboard motors, outdrive units and other machinery. But, a total loss is still settled at the face amount of the policy. I hope that helps clear up the difference between the two policy types.
