Insurance question

[Dalliance]

I saw RickD’s post above and decided to just give Boat US a call. They stated there is no current intention to discontinue the rider at the next renewal period, but it is not available to new customers if the boat is already more than 20 years old. I was able to get it because I was grandfathered in; had the policy for twelve years with no claims. Some of you may be able to get it, others not.

 

[Dalliance]

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.

I agree. Stated another way, they would pay 20% of the cost of the repair.

 

[FastOlson]

FWIW, when I called and spoke with a BoatUS insurance rep in 2018, the nice lady upped the Agreed Value of the policy on my '88 boat by the price of my new $10K engine/drive train replacement. That was parts only with no allowance for labor.
I have been with BoatUS for over a decade. I offered to send a copy of the engine invoice and was told they would take my word for it. Since insurance is priced out on a premium cost per thousand basis, this did not change my premium too much either.
Our boat is insured for (almost....) what it would cost to replace this exact kept-up-to-date boat, and not what an unmaintained one would sell for, I should point out.
I am not sure I follow the thread discussion about % payment for a repair. I might be missing something.... and now you all have me feeling a tad concerned. Hmmm...

 

[Dalliance]

FWIW, when I called and spoke with a BoatUS insurance rep in 2018, the nice lady upped the Agreed Value of the policy on my '88 boat by the price of my new $10K engine/drive train replacement. That was parts only with no allowance for labor.
I have been with BoatUS for over a decade. I offered to send a copy of the engine invoice and was told they would take my word for it. Since insurance is priced out on a premium cost per thousand basis, this did not change my premium too much either.
Our boat is insured for (almost....) what it would cost to replace this exact kept-up-to-date boat, and not what an unmaintained one would sell for, I should point out.
I am not sure I follow the thread discussion about % payment for a repair. I might be missing something.... and now you all have me feeling a tad concerned. Hmmm...

I too have had very good experiences talking to them and actually also a similar situation regarding Agreed Value. Take a look at your policy re depreciation and give them a call.

 

[Rick D]

Here is the (long) letter I sent to Practical Sailor. It outlines the issue from my perspective:

March 25, 2020

Practical Sailor
practicalsailor@belvoir.com

Regarding your April insurance article, when I got my BUS/Geico renewal, I spotted a optional coverage that they referred to as a partial depreciation waiver for FRP hulls, railings and masts. That, I thought, is weird. Why would you depreciate those things anyway? (The coverage was $50 on $1100 premium, so it wasn’t particularly expensive).

Generally, the principle basis for depreciation is that the customer should not benefit from the action of a settlement, in other words, betterment. The theory is that you will take a lot better care of your sails if you know you will have 50% depreciation on a claim for your seven year old sails contrasted to getting a brand new sail with no contribution (depreciation) from yourself.

So, I really don't understand how you can be "bettered" by getting a new spar, or stanchion, or a hull repair (non-consumables). I asked and the underwriter who responded ducked the question and simply replied “that’s how we do it here”. (The reason I was so curious is that I used to train adjusters once a very long time ago.)

I called back and was told that GEICO will depreciate the hull repair, spar replacement, railings, and hardtops by 10% per year, after 20 years of your boat's age up to a maximum of 80% for replacement or repair. When pressed, I was told "that's how our claims do it; it's our policy". Yikes. So, if I get hit, and the repair for the hull, rail, lifelines and stanchions is $12,000 on my 25 year-old boat, I will bear my $1000 deductible plus $6000 of the repair. I don't understand how GEICO can apply it in the real world unless claim customers simply don't push back. How am I any better for having a collision hole in my FRP hull repaired?

Mr. Pellerin of BUS writes that a depreciation waiver for partial losses of “soft goods and machinery” will be available for boats less than 10 years old. In another paragraph, he notes that “we will no longer offer a depreciation waiver for boats beyond 20 years of manufacture”. I assume that is any waiver. He then goes on to make (in my opinion) confusing comments about the “challenges” providing coverage. I say confusing, since GEICO likely has the best actuarial and pricing people around and they were already pricing into the product a pre-policy adjusting practice.

I can only surmise that this policy is a way to shed older boats from their in-force policies and offloading them to either forced self-insured or another carrier. I respect BUS/GEICO a lot, but this is disruptive, illogical and shocking from a customer point of view.

Regards;

Rick Dinon
s/v Attitude Adjustment
1994 Hunter Legend 40.5
Long Beach, CA

 

[David in Sandusky]

I’m happy with my USAA policy which makes no mention of depreciation. (Just read the Docs to check.)

 

[smokey73]

I’m happy with my USAA policy which makes no mention of depreciation. (Just read the Docs to check.)

David, is you policy with USAA directly. I have mine "through" USAA but it is a issued with Progressive.

I have been very pleased with Progressive. Just recently my boat was tied to a slip and a freak heavy blow came through and jammed me up against the pier and my fenders shifted. It did considerable paint damage and some scraping in the fiberglass hull itself (no holes though). They paid the whole cost to fix the fiberglass, repaint the side of the boat, put on new graphics ANd they even paid to prep and put one new coat of Interlux Ultra (hard paint) on the bottom since when hard paint is out of the water it loses its effectiveness. All this for a "vanishing deductible" of $200. I was really surprised by the bottom paint being done under the claim but the whole hull and bottom had just been painted on in August. Standing by for the $$ increase in premium though.

 

[MitchM]

you do NOT need to contemplate an admiralty claim in federal court if you are merely trying to collect against your own unfair insurer. . in most states you can file a small claims suit for up to 25K against your insurance company for failure to settle a claim fairly. my state has an unfair insurance practices law that makes insurers liable for 3x the acutal damages, plus lawyer fees and plus punitive damages, if an insurer fails to make a fair settlement on a claim. research the law in your state.

 

[capta]

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.

In the above case why wouldn't the power boat's insurance be paying? Many years ago when I was running mega yachts, my insurance guy told me that basically my payments were to cover an attorney to get money from the other guy or his insurance company, when applicable.

 

[Dalliance]

In the above case why wouldn't the power boat's insurance be paying? Many years ago when I was running mega yachts, my insurance guy told me that basically my payments were to cover an attorney to get money from the other guy or his insurance company, when applicable.

Yes, but not directly. My understanding of this situation is that my insurance company would pay my claim and then subrogate the other boater or their insurance company to recover what they paid me. So yes, in that sense, part of my insurance premium pays the cost of them recovering what they paid toward my claim. If the other party is uninsured, they go after the individual rather than an insurance company, which is a longer and more costly process with a lower recovery rate. I believe this is why we also pay for uninsured boater coverage just like we pay for uninsured driver coverage on our auto insurance.

 

[capta]

With the insurance costs for cruisers being what they are, I wonder how many can afford the extras like uninsured boaters these days.
With two claims in over 5 decades of almost daily vessel operating, insurance has been a poor investment for me over the years. Sadly, charter boats cannot self insure.

 

[Dalliance]

With the insurance costs for cruisers being what they are, I wonder how many can afford the extras like uninsured boaters these days.
With two claims in over 5 decades of almost daily vessel operating, insurance has been a poor investment for me over the years. Sadly, charter boats cannot self insure.

I didn’t think uninsured boater coverage was an extra on my policy. I assumed it’s just a line item in the policy, but I wouldn’t go without it if I had the option. Not worth the risk.
Fifty years and only two claims sounds like a great record! You’re lucky to be able to view it as a ”poor investment”, but that‘s what makes the insurance business work.