Insurance question

Rich Stidger · May 1, 2020

Try MSW Marine Insurance at mswmarine@mcgriff.com. 1-800-937-8895

They specialize in writing insurance for United States Power Squadron members, but I don't think you need to be a member. They do insure older boats. Mine is a 1997.

capta · May 1, 2020

"a good insurer for an older boat" Isn't that an oxymoron?

HMT2 · May 1, 2020

My 37 year old boat is insured by Progressive, agreed value. Had one claim four years ago, I am a happy customer.

dLj · May 1, 2020

I also have Geico, through BoatUS with an agreed hull value. I'm happy with the way it's setup.

dj

Dalliance · May 1, 2020

I discovered in February that a change like that had been made to my agreed hull value Gieco/Boat US policy at some time recently. Probably a year or so ago at a time when I was overwhelmed with other things in my life that I won’t go into here and was just not paying enough attention to notices they sent. I’m pretty sure it wasn’t always there. Anyway, I called them about it and was able to add a $50 rider that gets rid of that depreciation clause. Given the age of my boat, I basically would have otherwise been covered for 20% of what I thought I was covered for unless the boat was a total loss. Being able add that rider may have had something to do with the age of the policy and/or my claims record. I’ve had Boat US for twelve years with no claims to date.

Richard19068 · May 1, 2020

Even with agreed hull value I think they still get you for depreciation unless your boat is totaled. I went around about this with Geigo a couple years ago and never really fully understood it. Hopefully an insurance guy can chime in and help.

Just read Dalliance's post. I'll have to look into that rider.

Dalliance · May 1, 2020

Richard19068 said:
Even with agreed hull value I think they still get you for depreciation unless your boat is totaled. I went around about this with Geigo a couple years ago and never really fully understood it. Hopefully an insurance guy can chime in and help.

Just read Dalliance's post. I'll have to look into that rider.

I asked them what happens in this hypothetical situation: My 1982 boat is hit at the dock by a powerboat. The agreed hull value is $27k. There is $8k of fiberglass damage above the waterline, so the boat is neither sunk nor totaled. How much do they pay? If I understood the answer correctly, it’s $8k with the rider and 20% of $8k without the rider. The $50 rider seemed like a no brainer. Otherwise I would have been looking for a new insurance company.

dlochner · May 1, 2020

Mr Fox said:
I was told by Geico that they no longer offer the depreciation rider on a boat that’s 20 years old or more. Maybe I got wrong info from the agent I spoke to or maybe that’s specific to my state. Agreed value is fine in the event of a loss, I have that; I’m more concerned about the 8k in damage scenario. I’ll call back and talk to someone else.

This. GEICO changed their policy this spring. Over 20 years and repairs are depreciated to not less that 20% of the boat's value. The rider is not longer available for boats over 20 years old. That would be many of us. There was an article in Practical Sailor earlier this year about the issue.

Clearly this is an attempt by GEICO to limit losses. Understandable after all the hurricane damage in the past couple of years. Nonetheless, it leaves us with inadequate coverage for substantial damages that are less than a total loss.

Time to start voting with our checkbooks.

dlochner · May 2, 2020

The language in the contract was changed around March 15 for new and renewing policies. Older policies had the depreciation clause, but it did not appear to apply to hull repairs.

From Section IV A (2) of my policy.

“We” will pay the reasonable cost of repairs or replacements, in accordance with quality marine repair practice, less depreciation. Depreciation shall be calculated at 10% for each year beginning with the 20th year from manufacture. In all cases, there shall remain no less than 20% residual value regardless of age. In the event of damage to plywood, plastic, fiberglass, metal, cement, or other molded material, “we” are obligated to pay only the reasonable cost of repairing the damaged area, in accordance with quality marine repair practice. If there is a covered loss requiring repainting of an “insured boat,” “we” will pay the cost of repainting or resurfacing the damaged area in accordance with customary marine repair practices so that the area repaired will match, as closely as practical, the original color. “We” have the option to make or reimburse “you” for repairs or replacements, or to pay “you” directly based on an agreed estimate of loss. Repairs and replacements will be made with like kind and quality.

Kings Gambit · May 2, 2020

I’ve discovered recently re: GEICO, that if your boat is damaged/allided with, even if in the slip, that you may, because of likely outcomes associated with alternate scenarios, be compelled to make a claim against your own policy. If so, then you’re on the hook for the deductible and depreciation schedules of your policy. In California insurance law, an insurance company cannot subrogate against itself. So, if the offending party is also GEICO insured, the division (BOAT US) cannot through subrogation recover the cost of your claim from the other GEICO policy holder, so it’s a wash to them. But to you, if you do not recover damages through a liability claim against the other guy, where you could get a settlement including the depreciation & deductible losses, you’re stuck with ‘em, plus the inevitable up-charge to your policy upon renewal for having made the claim. In this kind of situation, you are likely on your own. Further, the insurance companys have perfected the neat little trick of filing Plaintiff-in-Liability suits on behalf of those clients who hit your boat, to limit their liability, so if you do try to make that liability claim, you could end up having to go to federal court (Admirality Court) to settle it. And, it is complicated. Most likely for smallish claims, you’d punt. But for big claims where nearly the entire value of the vessel is at risk, and you cannot recover fully from your own policy due to the depreciation, and the other guy is also GEICO insured, you may be SOL unless willing to fight.

KG

PS Hiring a lawyer may or not help if limitation is granted. You still cannot get more than the limit; which could be zero liability. The best chance is to fight in federal court against the Plaintiff’s motion to grant the limitation. To do that you’ll need a lawyer who can anticipate, and be ready for, the Plaintiff-in-Limitation suit, which can come quickly, even before much of the smoke has cleared, and which sets up the time line.

Rick D · May 2, 2020

See my letter in Practical Sailor. I have the waiver. It will not be available upon renewal (unless they have a change of heart, which is not likely). I think they are just trying to offload those of us with older boats. It makes absolutely no sense to carry hull insurance with those depreciation rates. Self insure or find a good alternative.

Richard19068 · May 2, 2020

Rick D said:
...or find a good alternative.

Do you have a good alternative to suggest?

Thanks

Dalliance · May 2, 2020

It w

dlochner said:
This. GEICO changed their policy this spring. Over 20 years and repairs are depreciated to not less that 20% of the boat's value. The rider is not longer available for boats over 20 years old. That would be many of us. There was an article in Practical Sailor earlier this year about the issue.

Clearly this is an attempt by GEICO to limit losses. Understandable after all the hurricane damage in the past couple of years. Nonetheless, it leaves us with inadequate coverage for substantial damages that are less than a total loss.

Time to start voting with our checkbooks.

It was that article in Practical Sailor that prompted me to take a close look at the policy language regarding depreciation back in February. Also, in December, or maybe it was January, there was another article in Practical Sailor about consequential damages. That too prompted a look at the policy and a phone call to Gieco/Boat US. No changes were needed on that one for my policy. I was happy about that.
Last summer, after an absolutely awful experience with State Farm Auto Insurance, I switched my auto, home & umbrella policies from State Farm to another company. I had been with State Farm for 25 years, but they are NOT the same company they used to be. Over the last year I have realized that I have to be much more vigilant about ALL of my insurance policies.

Mr Fox said:
When did they give you that info? I’m curious to know if you still have the rider... Probably it stays on until the policy renews, or maybe it’s still offered in some places?

I spoke with them the last week of January this year and the rider, a ”Partial Waiver of Depreciation”, is attached to my policy for 2/08/2020 to 2/08/2021. It doesn’t completely protect me from depreciation, but it waives enough of it to be worth the extra $50 to me. I did gather from their comments that this may not be available for all policies. Other riders I have, like Ice & Freeze damage, have stayed on the policy with each renewal so far. I check for them each renewal. I’ve attached a screen shot of the endorsement.

Rick D · May 2, 2020

Richard19068 said:
Do you have a good alternative to suggest?

Thanks

I wish I did; I'm covered until November. I will look for another. I have my Boston Whaler too that is also not worth carrying hull insurance on. My first stop will be Clarke Marine Insurance. They insure most of the yacht clubs in CA. Not sure what insurers they use. Clarke Marine Insurance

Rick D · May 2, 2020

if I understand the question, it's 80% of the repair that would be subject to depreciation. The limit is not that percentage of the value.

Insurance question

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