The Difference Between Agreed Value and Market Value

If you recently bought a boat in Chicago and are looking for a watercraft insurance policy, then you will soon learn about “agreed” and “market” values. Understanding the difference between the two is important because you will need to decide which category your boat falls under. And choosing the wrong one could potentially lose you money in the long run.


Like automobiles, new water crafts begin depreciating as soon as you start driving them. When you purchase watercraft insurance, your insurer will determine the amount of money you will get paid in the event of a total loss, like if your boat were to sink to the bottom of the ocean. If you and your insurer decide on the “agreed value,” then your watercraft insurance policy will cover however much the boat was worth when you bought it. In other words, the policy will not take your boat’s depreciation into consideration.


With “market value,” on the other hand, the policy will only pay as much as the boat is currently worth. So, if you buy a boat in 2007 and sink it in 2017, you will receive much less coverage because the boat has been depreciating over ten years. Policies under market value tend to be much cheaper than policies under agreed value. So, if you are trying to save money up front, that might be the right option. However, you might regret it later on if your boat is swept away by a tornado.


At Insurance Navy in Palos Hills, we provide low-cost watercraft insurance with high-quality coverage. If you want to learn more about how to find an affordable watercraft insurance policy in Illinois, the Insurance Navy agents are here to help. To learn more about our cheap watercraft insurance policies, please visit our website at

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