Constructive Loss Lighting Hit

StinkBug · Feb 19, 2014

I dont have a lot of experience in boat settlements, but I know that with cars if they declare it a total loss and pay you off on it you can then buy it back at the salvage price. I actually did this with a small boat that someone rear ended while on a trailer. They paid me $3k, I paid them back $800 and the boat never actually left my possession, just the title changed to "salvaged".

Talk with your insurance company and find out what they say. There's nothing forcing you to take anything from them or give up the boat regardless of their findings. If they declare it a total loss and you disagree you can just choose to cancel the claim, or pursue other options.

shemandr · Feb 19, 2014

I've heard of others doing this buyback at the salvage price after the boat is totaled. As I understand it you would not be able to re insure the boat for the market value. If you like the boat, and are comfortable with the fact that you can't insure the hull etc. to cover future repairs in another incident, then it may be the way to go.

Maine Sail · Feb 19, 2014

Trekfxrider said:
FOlks, After chasing a series of electrical issues by myself, battery charger, power switches, goofy electronics etc, I called in a top electrical tech in the area and he concluded the boat took a lightning hit. His first evaluation indicates around $ 14K to get everything back in order. That's with the proviso, that it doesn't include anything going forward that is identified as a problem. Boat has an agreed insurable value of $ 28 K. Diesel appears fine as does the hull/rigging. In discussion with the local yard, their GM, a former adjuster said: " Assume if cost of repair is above 45% of agreed value the insurer will probably make you a settlement offer in the low $ 20's, declare "Total Constructive Loss" and take boat for salvage. Appreciate thoughts, comments and whatever as I ring the bell in the AM. Lastly, I spoke with my original surveyor, described the events and he concurred lightning was the culprit.

Do you have an "agreed value" policy or fair market value policy....??? If it is an agreed value policy then they will pay you the agreed 28k, it is part of the contract/policy, but if it is below 28k they will likely opt to fix it.

I would never own a boat with anything less than an agreed value policy, but many do, because FMV policies are less money.. Check your policy. If it is fair market you may be surprised that your boat is not even worth 10k... The FMV of boats has taken a HUGE hit lately...

AXEL · Feb 19, 2014

My boat took a hit a couple of years ago. The dead giveaway was the missing VHF antenna. A survey was done, some electronics were cooked, they replaced the rigging, no hull or through hulls damaged. The bill was only about $4000. Your estimate sounds fishy?

Sandy Stone · Feb 19, 2014

Really. You had $14K worth of electronics on the boat?

Maine Sail · Feb 19, 2014

Sandy Stone said:
Really. You had $14K worth of electronics on the boat?

Might not be just electronics there usually is, wire, panel breakers, alternator, engine gauges, starter motor, fuel pump, water pump etc. etc. plus labor, mast step / unstep haul & launch etc. in there too.

14k would be a small lightning hit for a 33 footer.......

I had a sub 30 footer hit last summer that came to a tad over 9k.. The owner had an agreed value of 12k insurance company paid out 9k boat got fixed.

Adds up pretty fast when the plotter/radar was $2600 and the wind, depth, speed was $1600... That job was 32 hours....

This is a partial list of what was lost:

[FONT=&quot]VHF Antenna[/FONT]
[FONT=&quot]Windex
[/FONT][FONT=&quot]VHF[/FONT]
[FONT=&quot]RAM Mic
[/FONT][FONT=&quot]Raymarine ST-60 Wind, Depth, Speed
[/FONT][FONT=&quot]Tachometer[/FONT]
[FONT=&quot]Fuel Gauge[/FONT]
[FONT=&quot]Alternator
[/FONT][FONT=&quot]Garmin 740 GPS & Radar
[/FONT][FONT=&quot]Blower Switch (welded shut)
[/FONT][FONT=&quot]Blue Sea Panel Back Lighting 3 rows
[/FONT][FONT=&quot]Blue Sea LED Indicator Lights 18
[/FONT][FONT=&quot]Steaming Light[/FONT]
[FONT=&quot]LED Bow Light[/FONT]
[FONT=&quot]LED Stern Light[/FONT]
[FONT=&quot]LED Anchor Light[/FONT]
[FONT=&quot]Kenwood Stereo[/FONT]
[FONT=&quot]Bilge Pumps = 2
[/FONT][FONT=&quot]Compass Light[/FONT]
[FONT=&quot]Compass Compensators[/FONT]
[FONT=&quot]Fuel Pump[/FONT]
[FONT=&quot]Macerator[/FONT]
[FONT=&quot]Mast Wiring[/FONT]
[FONT=&quot]13 Panel Breakers[/FONT]
[FONT=&quot]DC Volt Meter[/FONT]
[FONT=&quot]Link Lite Battery Monitor[/FONT]
[FONT=&quot]Battery Switch[/FONT]
[FONT=&quot]Battery Bank fuse[/FONT]
[FONT=&quot]Engine alarm buzzer[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]
[/FONT]

Solstice · Feb 19, 2014

Maine Sail said:
Do you have an "agreed value" policy or fair market value policy....??? If it is an agreed value policy then they will pay you the agreed 28k, it is part of the contract/policy, but if it is below 28k they will likely opt to fix it. I would never own a boat with anything less than an agreed value policy, but many do, because FMV policies are less money.. Check your policy. If it is fair market you may be surprised that your boat is not even worth 10k... The FMV of boats has taken a HUGE hit lately...

+1 on Agreed Value. Another thing to consider is many AV policies still take depreciation into account for things like sails, cushions and even electronics. It's in the fine print and can be a factor in whether or not a total loss or salvage makes sense...

Gunni · Feb 19, 2014

Sandy Stone said:
Really. You had $14K worth of electronics on the boat?

I have that much aft the companionway. By the time you get to my DC /AC panel it would be $25K, easy. Guys like Maine don't work for free, and the survey / repair process is laborious.

capta · Feb 19, 2014

There was a thread a while back by someone who had the insurance company declare the boat a total loss, but somehow he retained it and fixed it up. When he went to get insurance, he couldn't, as the records showed the boat as un-salvageable. I don't remember the exact details but that's the gist of it, so be cautious if you head down that path.

CalebD · Feb 19, 2014

About 9 years ago my boat was a declared a CTL by BoatUS. Insured value was $8K but we bought it back at "salvage" for $800. Used remainder to fix boat. Could NOT get insurance the following year - no where, no how.

If continued insurance coverage is of value to you then I'd suggest you work with your insurance co. and figure out what YOU would be willing to cover out-of-pocket such that your boat will not be declared a CTL. Find out how much the insurer would be willing to pay without declaring it a CTL - you pay the rest.

Sandy Stone · Feb 20, 2014

Yikes! I stand corrected. Years ago when my boat was hit, I had to replace the VHF antenna, VHF, a light fixture, and a few wiring connections. This on an 'oldie but goodie' Pearson 32 that had pretty minimal systems all around. I can see now that on a modern boat with more extensive damage things could add up in a hurry.

Gunni · Feb 21, 2014

Sorry to see this immense hassle, massive repair. Between lightning strikes, and hurricanes, this is why Florida boaters pay higher insurance costs. I've seen that much damage and the strike hit a neighboring boat!

thinwater · Feb 21, 2014

Another options is to consider how much of that stuff is in reality, rather useless. Items that certainly have nothing to do with insurability or cruising.

My boat seem well equipped, and I came up with 8 items I either don't have or never use.

Another option can be a hybrid of DIY and contractor; some items are simple and some you might better contract out. Certainly some things might be improved by a redesign opportunity.

Rick D · Apr 20, 2014

Wow. Sounds too good to walk away from or worth selling for a good price! New wiring & panel which was probably due anyway. New higher-capacity alternator. Upgrade engine panel or run NEMA 2000 to a new chart plotter and get the gauges reading out there. Don't know about your through hulls, but I assume OK? Geesh, a lot is just what would be normal upgrade stuff and you already have the other stuff done. Lucky somebody!