YOu need to read your policy closely. A fellow who busted his mast submitted the quote to Boat US. The boat is 7 years old. Boat US depreciated the mast by 70%according the policy holder. It would appear that this fellow does not have replacement cost in the event of an accident on his policy. It is also odd that the mast if according to the depreciation will only last 10 years as it is being depreciated 10% for each year. I think masts do last longer than 10 years for as long as I have been in this industry. Read the fine print on your policy as it is your responsibility. You pay for what you get. I would recommend replacement cost if the boat of course is not totaled. Crazy Dave Condon
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Masts -- 10 years?
Very strange. My non-Hunter boat is a 1975 Windrose (I've had it since 1979). It has the original mast -- and is still fine.
Very strange. My non-Hunter boat is a 1975 Windrose (I've had it since 1979). It has the original mast -- and is still fine.
I have to insure via The Hartford as I have an...
...an umbrella policy with them. They are not "boat people" but only depreciate the sails and batteries. Not the mast. alan
...an umbrella policy with them. They are not "boat people" but only depreciate the sails and batteries. Not the mast. alan
70 Percent Depreciation Is Nonsense..
..tell your friend to refuse the settlement and demand arbitration under the terms of the policy. (Most have such a clause.) He can hire a rigger to represent him The life of an aluminum mast should be at least 50 years, maybe more. Actually, there should be NOMINAL depreciation on the mast itself. Maybe 20 years on the LP or annodizing. About 20 on the rigging. That's my call, but I know what I'm talking about. Rick D.
..tell your friend to refuse the settlement and demand arbitration under the terms of the policy. (Most have such a clause.) He can hire a rigger to represent him The life of an aluminum mast should be at least 50 years, maybe more. Actually, there should be NOMINAL depreciation on the mast itself. Maybe 20 years on the LP or annodizing. About 20 on the rigging. That's my call, but I know what I'm talking about. Rick D.
Another Thought Re: Boat Insurance
A friend advised me the insurer for Boat US had added a depreciation factor. I looked and indeed there was. After seven years, I think, they start applying depreciation to the boat and systems. I will look more carefully, but the point is that you get these strange outcomes when such a clause exists. A boat is a large investment and a heavy dose of depreciation can leave the owner with a huge bill and a big share of the loss. I think its time, for me, to shop for a policy that has a greater full replacement cost application. This isn't as easy as it sounds, so those of you who know what you have, please let the rest of us know. Rick D.
A friend advised me the insurer for Boat US had added a depreciation factor. I looked and indeed there was. After seven years, I think, they start applying depreciation to the boat and systems. I will look more carefully, but the point is that you get these strange outcomes when such a clause exists. A boat is a large investment and a heavy dose of depreciation can leave the owner with a huge bill and a big share of the loss. I think its time, for me, to shop for a policy that has a greater full replacement cost application. This isn't as easy as it sounds, so those of you who know what you have, please let the rest of us know. Rick D.
Most boat owners will be suprised.
Most boat owners will be suprised when they go to file a claim with MOST insurers.
Most boat owners will be suprised when they go to file a claim with MOST insurers.
As a person who sells State Farm insurance, we rate the boat on the age and value. We tend to be higher than some companies based on the age of the boat when insured. However, if when we insure it the value is based on the value of the boat a that time. Thus if you have an old sailboat, State Farm may have high rates. However, if you insured it with with State Farm from the start (or when close to new) the rates may be reasonable. These are the kind of questions you may wish to ask your agent.
Thanks Warrebn
Warren, you hit it on the nailhead. I use to be an adjuster for Libery Mutual many moons ago and to be frank, I was surprised about the depreciation clauses by Boat US. Crazy Dave Condon
Warren, you hit it on the nailhead. I use to be an adjuster for Libery Mutual many moons ago and to be frank, I was surprised about the depreciation clauses by Boat US. Crazy Dave Condon
Rate drop
Just a short question. If the boat depreciates 10% each year why doesn't the rate we pay drop as well. The insurance companys sure want to take our money then try to pay back little or nothing when or if we have a claim. Mark Price
Just a short question. If the boat depreciates 10% each year why doesn't the rate we pay drop as well. The insurance companys sure want to take our money then try to pay back little or nothing when or if we have a claim. Mark Price
Costs increase as boats depreciate
Yard rates seem to go up a couple of $$ an hour every couple of years...parts/equipment prices go up...and overall claims experience, especially during bad hurricane years, affects premiums too. However, none of the above is the biggest reason. The biggest portion of your insurance premium goes to liability coverage. As long as suing people for every hangnail remains a big chunk of our GNP, insurance rates are just gonna keep going up.
Yard rates seem to go up a couple of $$ an hour every couple of years...parts/equipment prices go up...and overall claims experience, especially during bad hurricane years, affects premiums too. However, none of the above is the biggest reason. The biggest portion of your insurance premium goes to liability coverage. As long as suing people for every hangnail remains a big chunk of our GNP, insurance rates are just gonna keep going up.
Opportunity, Phil...
..I said I was going to shop for an insurer that still had a replacement cost policy (see 8/27 post). Well, I found several marine brokers with sites and I filled out the request for quote forms with four. Told them also interested in a full-repacement policy. Two weeks ago. Guess what... not a single response! I guess that it's not unusual for guys that just have a site up because someone told them they should. Still, you'd think they'd check the stupid thing once and a while. So, Phil, maybe you should get a broker on board? Never mind, you don't need the aggravation. Well, on to the telephone! Rick D.
..I said I was going to shop for an insurer that still had a replacement cost policy (see 8/27 post). Well, I found several marine brokers with sites and I filled out the request for quote forms with four. Told them also interested in a full-repacement policy. Two weeks ago. Guess what... not a single response! I guess that it's not unusual for guys that just have a site up because someone told them they should. Still, you'd think they'd check the stupid thing once and a while. So, Phil, maybe you should get a broker on board? Never mind, you don't need the aggravation. Well, on to the telephone! Rick D.
Boat US Policy
Assuming someone has agreed upon valuation, a mast should be fully covered unless I missed something. Someone should contact their insurance commissioner. "BoatU.S. Marine Insurance is underwritten by a company of the CNA Insurange Group (referred to below as "the carrier"), one of the largest specialty insurers for over a century. The following paragraphs explain payment information in the event of a loss as explained in the policy. Total or Constructive Total Loss You will be paid the Agreed Hull Value if the boat is lost absolutely, or if the reasonable cost of salvage and/or repair exceeds the Agreed Hull Value.The carrier is not obligated to accept or pay for the boat or any boating equipment which you abandon. If you are paid the Agreed Hull Value, the carrier has the right to the insured property. Repairs for Partial Losses The reasonable cost of repairs is paid with depreciation applied to the following items: paint and finishes, protective covers, fabric or sails. Depreciation also applies to outdrive units, outboard motors and gel coat beginning with the sixth year from the year of manufacture, and to internal machinery beginning with the eleventh year from the year of manufacture. However, if used or remanufactured parts are available and you agree to accept them, depreciation will not apply. In the event of damage to plywood, plastic, fiberglass, metal, cement, or other molded material, the carrier is obligated to pay only the reasonable cost of repairing the damaged area. The carrier has 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. ©2001, Boat Owners Association of The United States. All Rights Reserved"
Assuming someone has agreed upon valuation, a mast should be fully covered unless I missed something. Someone should contact their insurance commissioner. "BoatU.S. Marine Insurance is underwritten by a company of the CNA Insurange Group (referred to below as "the carrier"), one of the largest specialty insurers for over a century. The following paragraphs explain payment information in the event of a loss as explained in the policy. Total or Constructive Total Loss You will be paid the Agreed Hull Value if the boat is lost absolutely, or if the reasonable cost of salvage and/or repair exceeds the Agreed Hull Value.The carrier is not obligated to accept or pay for the boat or any boating equipment which you abandon. If you are paid the Agreed Hull Value, the carrier has the right to the insured property. Repairs for Partial Losses The reasonable cost of repairs is paid with depreciation applied to the following items: paint and finishes, protective covers, fabric or sails. Depreciation also applies to outdrive units, outboard motors and gel coat beginning with the sixth year from the year of manufacture, and to internal machinery beginning with the eleventh year from the year of manufacture. However, if used or remanufactured parts are available and you agree to accept them, depreciation will not apply. In the event of damage to plywood, plastic, fiberglass, metal, cement, or other molded material, the carrier is obligated to pay only the reasonable cost of repairing the damaged area. The carrier has 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. ©2001, Boat Owners Association of The United States. All Rights Reserved"
Absolutely Right, Steve
I looked at my own policy and the language is correct and I don't see any other sections applying. It would seem applying depreciation to the mast was flat wrong. They should correct it themselves. Dave: tell him. I once had State Farm insurance. Got dismasted. Adjuster said mast not covered because mechanical breakdown is excluded. I said, nope. Rigging tang that broke not covered. All else is. They agreed. Point is that with depreciation clauses, you get some pretty stupid adjustment offers. From the company point of view, if they didn't have those clauses, insuring an older boat would be prohibitive. A fresh look at Boat US (CNA) policy reveals it to be less of a problem than I thought, but it still has the potential for headaches I'd rather avoid, although my experience with them, including one claim about ten years ago, has been excellent. Rick D.
I looked at my own policy and the language is correct and I don't see any other sections applying. It would seem applying depreciation to the mast was flat wrong. They should correct it themselves. Dave: tell him. I once had State Farm insurance. Got dismasted. Adjuster said mast not covered because mechanical breakdown is excluded. I said, nope. Rigging tang that broke not covered. All else is. They agreed. Point is that with depreciation clauses, you get some pretty stupid adjustment offers. From the company point of view, if they didn't have those clauses, insuring an older boat would be prohibitive. A fresh look at Boat US (CNA) policy reveals it to be less of a problem than I thought, but it still has the potential for headaches I'd rather avoid, although my experience with them, including one claim about ten years ago, has been excellent. Rick D.
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