Insurance

Joe · Nov 17, 2013

Boat US......

Don S/V ILLusion · Nov 17, 2013

Your underwriter may be doing you a favor. If the value really is 20k, they won't pay more than the value regardless how whether you have an ACV or agreed-value policy.
Read the fine print and don't be misled by the implication of "agreed value" titles.

Rick D · Nov 17, 2013

As Don says, what your boat is worth is what you can sell it for, not what you have in it. Upgrades are not worth what they cost in terms of market value, although they do make the boat more marketable. The way to resolve it is to submit evidence to the underwriter of the vessel's worth. So, shop, record, document, evaluate and submit. And, good luck to you! Also, don't get too focused on total value insured. Most losses are overwhelmingly partial losses, so consider your willingness to absorb those costs before you drop the hull coverage.

bffatcat · Nov 17, 2013

I had my boat completely refurbished in2011 New algrip topsides and deck etc new rub rail new sails new outboard before the upgrade Keel resurfaced I had the boat insured for $6000
before the up grade The boat is a 75 Pearson 26 W after the upgrade which cost me 18K the insurance co agreed to up my insurance to 10K a boat is worth what its worth to them regardless of what I thought I have never had a claim.

FastOlson · Nov 17, 2013

Don S/V ILLusion said:
Your underwriter may be doing you a favor. If the value really is 20k, they won't pay more than the value regardless how whether you have an ACV or agreed-value policy.
Read the fine print and don't be misled by the implication of "agreed value" titles.

My policy with BoatUS, is for an agreed-upon amount. We both agree and it's in writing in my policy. Not sure where you are getting your info that would seem to imply that your insurer is automatically planning to defraud you (and that you seem to accept this as normal).
If so, report him to your insurance regulatory agency and get another insurer asap.

Loren

Don S/V ILLusion · Nov 17, 2013

FastOlson said:
My policy with BoatUS, is for an agreed-upon amount. We both agree and it's in writing in my policy. Not sure where you are getting your info that would seem to imply that your insurer is automatically planning to defraud you (and that you seem to accept this as normal).
If so, report him to your insurance regulatory agency and get another insurer asap.

Loren

I can assure you the underwriter will never pay more than the value of the boat. If you think otherwise, just imagine why an underwriter would ever allow someone tp profit from a loss.
That's not the way insurers get to build those fancy buildings but if you are content in your belief, I hope you never learn this lesson the hard way.

I don't know you or your boat but if it is insured for more than the actual market value, you are just wasting money by paying more than you should.

Bob 04 H260 · Nov 17, 2013

My policy is for the "agreed value". That amount is 10% more than we paid for the boat. We put a bit of money into it so probably about right I think.

The policy states in case of total loss they will pay the "agreed value" without a deductible, except in the case of a named storm and then a 5% deductible will apply.

In case of just damage to the vessel, repairs will be made up to the amount of the agreed value at which point it would be written off.

They have a formula for depreciation of the sails and canvas. It looks like they figure on about a 10 year lifespan, seems fair. The electronics have a $250 deductible, no depreciation. No deductible on the dinghy or motor, agreed value of $1500 each, about the replacement cost of new ones.

My policy appears to be very clear to me, it does not have any fine print.

I suppose it all depends on the insurance company, always good to read a policy and know what you are buying.

Bob

-from my insurance companies web site, seems very clear to me,

What is the difference between Actual Cash Value and Agreed Value?

Concerning insurance claims, the Actual Cash Value policy permits your boat insurance agency to apply full deduction for depreciation of your boat’s value. An Agreed Value policy will provide you with the agreed-upon boat value stated originally on your policy (no depreciation) if your boat is a total loss.

http://www.harbourinsurance.ca/faqs...ce-between-actual-cash-value-and-agreed-value

Don S/V ILLusion · Nov 17, 2013

I wasn't clear. I was referring to the OP in which he suggested unilaterally increasing the insurability amount.
If your underwriter makes a determination the insurable market value is X, you should expect to receive X upon total loss. If, conversely, an owner thinks it should be insured for more, he is just wasting money in excess premiums.

Finally Free · Nov 17, 2013

With regards to Boat US We have our insurance through them. They refused to write the policy for more than the contract amount on the boat even though the survey said it was a fair market value of 20k above that amount. Yes it is an agreed value policy.

FourPoints · Nov 17, 2013

Finally Free said:
With regards to Boat US We have our insurance through them. They refused to write the policy for more than the contract amount on the boat even though the survey said it was a fair market value of 20k above that amount. Yes it is an agreed value policy.

Go back to them in 6-12 months after you have the policy and tell them what upgrades you have put into the boat, and what you want it insured for, they will increase the coverage for anything you do to the boat that increases the value. I was originally insured for $7k, even though it appraised for $12k. After a few years of significant upgrades to the boat and many many dollars, it is now insured for $16k (and I wouldn't sell for a penny under $17k, maybe even a bit more) They base the premium on the insured amount, so it doesn't really matter (wihin reason) what the boat is actually worth, since you are paying them the premium for what they will pay you.

Joe · Nov 17, 2013

I was not aware that MARKET value approach, or the REPLACEMENT value approach, was the predominant factor in writing insurance for boats. I always understood that the COST approach was the priority. So replacement of the owner's investment (cost), along with other risk factors
such as location, condition and existing additional equipment (verified by a survey) would determine the premium......

In other words, if you can verify that you invested 50k in a boat.... real money... then you should expect to be able to have that dollar amount protected by the policy. There was no mention of market value when my premium was set, nor when I increased the policy amount.
I simply had to show proof of the boat's existence, it's condition and location and, of course, verification of the purchase amount. Later on I documented my improvements and added equipment.. and submitted them for additional coverage... no problem....why???? it gave them an opportunity to increase the premium.

Finally, any opinion of value is simply that: an opinion. Surveyors can offer opinions till they're blue in the face but they don't really mean much until some one actually agrees to pay you that amount.

Bob 04 H260 · Nov 17, 2013

Don S/V ILLusion said:
I wasn't clear. I was referring to the OP in which he suggested unilaterally increasing the insurability amount.
If your underwriter makes a determination the insurable market value is X, you should expect to receive X upon total loss. If, conversely, an owner thinks it should be insured for more, he is just wasting money in excess premiums.

Regarding the OP, his insurance company does not agree with him on what the vessel is worth. I don't think they were doing him a favor.

I think that is why the term agreed value is used. You can't increase that unilaterally. If there is no agreement on the vessels value then you do not have a policy. You both have to agree.

Once they sell a policy for an agreed value then I think in most cases they have to pay that amount, even if the boat could not be sold for that amount.

I know of loses at my old sailing club where the owner got significantly more than the boat could have been sold for. However his cost to actually replace it might in fact be more than he got under the agreed value policy.

This may be the situation the OP is facing. A different insurance company may be willing to increase that value. As the boats age I think it becomes more and more difficult.

Bob

Benny17441 · Nov 17, 2013

Insurance companies do need to be able to evidence the value of the boat they are insuring. They can do that by obtaining average market values or having an appraisal done by a reputable and licensed professional. The second alternative obviously bears a cost that they would expect you to cover. At this point a $20K valuation for a 30 year old Pearson 303 seems quite reasonable based on average market values. If you feel strongly that your specific boat is worth more then you may have to step up to the plate and offer that you would be willing to pay for a valuation if they would agree to set the agreed upon value based on its results. When you have a boat worth much more than the average market value you will be frequently called upon to prove and document its value. A appraisal every 5 years would not be out of the realm. But before you incur in any expenses do make sure that your feel for the value is set on solid basis.

Ken Cross · Nov 18, 2013

I'd check with another insurance company.

Tim R. · Nov 18, 2013

I have seen Rich's boat and I would say it is easily worth more than $20k. The first time I was on it I thought it was new.

The insurance company last year agreed on the $30k value and then depreciated his boat $10k in one year? Something is not right here.

Rich, I was able to increase the agreed value of my previous boat, the Ericson 35, by sending receipts and pictures to my insurance company. They said "no problem". My carrier at the time was Amica. Very good company with excellent customer service. You deal directly with them instead of through an agent.

northptsailor · Nov 18, 2013

My policy is with Boat US. It is an agreed value policy that has been the same for thirteen years since new.My premium went up a bit this year, probably due to Sandy,and I thought that I would lower the agreed value to current market value to save some money.
Then I realised that when I buy that replacement boat for exactly what I could sell my boat for, I willl be giving the state about 9 percent of the purchase price( about 18,000) and unless the boat is local, paying delivery charges.
I decided that I will keep my agreed value where it is. Even then I would be very lucky to replace my boat with a duplicate for what I thought might be more then I could get in a sale.

Jes Hillman · Nov 18, 2013

Rich (P303) said:
After 6 years of paying for boat insurance (no claims)... I just received a letter stating that they were dropping the insurable value of my vessel from 30k to 20k. I feel the vessel is worth 30k... and wouldn't insure it for less. Anyone know what my options are... besides trying to find another carrier and shelling out $$$ for another survey?

Personally I would be shopping for another policy. I originally insured my boat with BoatUS. They insured it for the purchase price (approx $30K). After investing another $30K in upgrades, electronics, etc, they agreed to lift the valuation to $35K.

When I relocated from San Diego to Houston, Texas, they informed me that my coverage would be reduced to $30K and the cost of the policy tripled. Needless to say I am not insured with BoatUS anymore.

I found a company based out of Rhode Island by the name of Falvey Insurance that put me on XLinsurance with a Agreed upon Value of $65K less a named storm deductible. The policy cost me $988 a year for my 1989 Hunter 33.5. Because I was unfamiliar with this specific company, I had fellow member of my yacht club who is an insurance broker review the policy. He was so impressed with both the policy and the company, he now sells their products.