Insurance valuations

[lustyd]

Just renewing my insurance and changed the value to reflect current market value (aka I can’t buy similar replacement at the old value any more) as well as a complete electronics upgrade. I didn’t go crazy and if anything underestimated. I’ve been told that to increase value it needs a surveyor to value. Seems fair enough I guess normally as there aren’t usually market forces changing the value upwards.
does it then work the same way in the other direction? Is the current value just set in stone as far as insurance is concerned or will they eventually decide to reduce the value of the boat, and will they want a survey for that too?

I’m not overly bothered either way just nice to know how these things work as I’ve not come across it before

 

[JumbleDuck]

Just renewing my insurance and changed the value to reflect current market value (aka I can’t buy similar replacement at the old value any more) as well as a complete electronics upgrade. I didn’t go crazy and if anything underestimated. I’ve been told that to increase value it needs a surveyor to value. Seems fair enough I guess normally as there aren’t usually market forces changing the value upwards.
does it then work the same way in the other direction? Is the current value just set in stone as far as insurance is concerned or will they eventually decide to reduce the value of the boat, and will they want a survey for that too?

I’m not overly bothered either way just nice to know how these things work as I’ve not come across it before

Generally speaking insurers assume that things (cars, boats etc) depreciate with age. They therefore look askance at claims of increased value unless supported by professional evidence. I had precisely the same issue when I increased the declared (not at that stage agreed) value of my DS.

 

[Resolution]

On the good news front, AFAIK, our friends at HMRC treat yachts as depreciating assets and therefore not liable to capital gains tax. So if you do sell your boat for more than you paid, you should keep all the gain. (Please check with a tax expert before rushing off to your nearest yacht broker!)

 

[lustyd]

Trust me, if I didn't have a deep desire to own a yacht I'd already have the profits! The entire issue I have here is that I pay for the insurance so that I could get a replacement if something were to happen. As it stands I'd have to add quite a sum to get something similar even if there was one on the market (which there almost never is, they're bought immediately!). I guess I could look at it that I wouldn't be out of pocket, but it seems odd that they refuse to acknowledge the market changing when it's very obvious to everyone that it has. With upwards of 10% inflation on the horizon I don't see this as the last year boats will "increase in value", but more likely the first of quite a few drastic upshifts in the numbers. Every boat owner paying a surveyor a couple of hundred quid a year to acknowledge this rise seems like money for old rope.

 

[Tranona]

Actually recent boats have increased in value by 10-15% in the last year. I have just been through this with my insurance renewal as I would have been reducing the agreed value if the market had not changed. I have sight of what same model boats, similar age changed hands for recently (only 2!) and they were closer to my agreed value than I expected, and a bit above the asking prices of replacement boats which would have to come from the EU, so I left it the same.

You are right insurers require evidence if you want to increase value - brokers, surveyors, and evidence of recent expenditure that enhances value, for example. However, in the event of a write off most policies have an equal value clause which they can fall back on if you grossly overinsure. I queried this (as it is new for my policy - it was not in the old Y policy) and was assure it was rarely used. The main reason for having a robust agreed value is to prevent the boat from being written off if the claim is too high value. Not so important with higher value boats, more for older lower value boats where repair costs can be a high proportion of market value - and market value is lower than replacement cost if there has been significant recent expenditure on the boat..

 

[Sandy]

Just renewing my insurance and changed the value to reflect current market value (aka I can’t buy similar replacement at the old value any more) as well as a complete electronics upgrade. I didn’t go crazy and if anything underestimated. I’ve been told that to increase value it needs a surveyor to value. Seems fair enough I guess normally as there aren’t usually market forces changing the value upwards.
does it then work the same way in the other direction? Is the current value just set in stone as far as insurance is concerned or will they eventually decide to reduce the value of the boat, and will they want a survey for that too?

I’m not overly bothered either way just nice to know how these things work as I’ve not come across it before

They just want an independent individual to audit that the work has been done.

 

[Sandyshore]

Some insurers in my opinion accept your word as to increase as your policy is a market value insurance and they will look at web sites and come up with a figure based on policy conditions and wordings if unfortunate with a claim.
You are in effect paying for over the odds,
If you have an agreed value policy then by producing documentation as to value such as carried out by a surveyor all is logged and that is what they will pay following a total loss.
Yes ,the premium might be slightly higher but you can rest easy.
I am wary of any market value policy .