Boat insurance question: write off.

[Tin Tin]

Asking for a friend.

We have a friend who keeps his boat in Brittany (UK resident, UK registered and insured boat). We meet up about twice a year. Once on our way down to southern Brittany and again on the way back.

Some weeks ago, the boat broke her moorings and she ended up on some rocks. The hull was holed but she was salvaged pretty promptly. She went on the rocks on a falling tide and was salvaged on the following rising tide.

There is some water damage inside, but apparently nothing extensive. Apart from the hole in the rudder, there is also some damage to the rudder.
Now, the boat is quite old (nearly 40 years I believe) and my friend is afraid that the insurance will declare the boat a write off based on age alone.

Questions:
- Can they do this?
- Who decides the value of the boat? Or is it always the value the boat is insured for?
- If my friend accepts the insurance pay out, who does the boat belong to? Can he decide to take the money and have the boat repaired anyway?
- If he accepts the insurance pay out but the boat no longer belongs to him, can he remove equipment from the boat? Over the past few years he lavished a small fortune on this boat - almost everything is new: electrics, electronics, sails, engine... All items he would like to recover for his 'next' boat.

Apologies if all of this is somewhat vague, but my friend wants the whole thing kept quiet whilst the whole matter is still 'pending' (survey and quotes for repair).

 

[lpdsn]

I presume he has agreed value insurance, which is the norm. That's how much they'll pay if the boat isn't worth repairing.

I think all you can remove is personal gear - interestingly this year's insurance talks about gear not normally sold with the boat as specifically mentions binoculars as an example. Wouldn't normally include the things you list.

I've heard of people buying the boat back to become a project. Probably not worth it. Taking the money and buy another boat is probably the most cost-effect way to keep sailing.

PS he could quite legitimately make offers for things he wants to buy off the boat.

 

[Tranona]

Depends entirely on the terms of his insurance. If it is an agreed value as lpdsn says that is what they will pay plus any salvage costs. He can then either accept the cash and the insurer has to deal with the remains or he can negotiate to buy it back. Would suspect in the circumstances the amount the insurer will ask for will be minimal. Last thing they want is to own a wrecked boat in France.

If it is not agreed value then they will pay "market" value which obviously they will try to minimise so there may be some negotiation there. However once again there will be the possibility of negotiating the payout and keeping the boat.

If he does walk away with the money then normally he can only take personal belongings rather than anything that is part of the boat, although there may be room for negotiation.

Best approach is to wait for the insurer to assess the damage and make an offer then decide what to do. Would guess there is not a huge sum involved, so maybe not worth involving a surveyor to fight the insurer, but that is always an option. However contested claims have a habit of taking over your life and bank account, and it may be better in the long run to take the money and walk away.

 

[lw395]

Talk to the insurer.
Don't forget there are costs like the recovery and storage and maybe eventual disposal which the insurer would be paying.

 

[Sandyshore]

First of all he should check if an agreed value policy and that the insurer has an in house claims department.
If yes should be a straight forward claim plus cost of salvage ,storage removal of wreck etc
If agreed value WITH claims outsourced to a Loss Adjuster then problems may easily arise.
A Loss Adjuster is paid to reduce the claim that is their role so be wary
if insurer has an in house claims department then they may request an independent surveyor to assist. The surveyor would report on the facts and the insurer would review claim on facts and policy conditions .Often found surveyors will go beyond normal role to help the insured.
Always check at time of purchase if agreed value and in house claims team .
Advice walk away from any policy that refers to any outside claims handler .

If your friend has a market value insurance unless he has a decent argument based on facts I doubt he will get a full pay out, simple as that .


Do you really wish to buy back electronics that may have been shook up leave them insurers might not want them and let you keep them anyway with out knocking the claim down.
As already mentioned in other posts take off any personal belongings or items not insured such as bottles booze etc.
Speak to your insurer. If they have appointed a surveyor he will normally offer guidance. Avoid a loss adjuster like the plague his role is to save insurers money .
My advice always speak directly with the claims manager.
I hope your friends claim is settled to his satisfaction .it is always a traumatic time with claims at best of times.

 

[mainsail1]

Sandyshore I guess you must have had a problem with a Loss Adjuster in the past. ...It happens and there are often two sides to the story.
But as a Loss Adjuster for many years I can tell you we do not try to knock down legitimate claims. Full stop.
In fact, you could argue that it is in our interest to pay more on the claim as our fees usually have some reference to the size of the agreed settlement.

 

[Tin Tin]

Thanks for all the replies so far.
I have copy/pasted them in an e-mail and forwarded them to my friend.

At the moment he's trying to find out whether his policy is agreed value or market value.
Seems elementary, but he's a bit shook up at the moment.
He's spent the better part of a decade restoring the boat and was about to sail off into the sunset next year.

Anyway, I'll get back if/when there are any further developments.
At the moment, he's still awaiting quotes for the repairs and the decision of his insurers.
I think that the thought of the boat being written off scares him more than anything.

 

[Hacker]

Sorry Mee that comment is totally out of order

 

[Robert Wilson]

Sorry Mee that comment is totally out of order

+1

I thought mainsail1's comments were helpful in countering an earlier criticism, by using his personal experience; which surely is what most "poster's" on the forum(s) are seeking. IMHO

Mee, you are totally out of order; I wonder which side of the bed you got out off this morning?

As to the OP, thank you - I have picked-up quite a few tips and pointers and I'll be seeking clarity when I talk to my own insurers next month (renewal, not claim!).
I don't know what your friend's boat is worth but my boat is about the same age and I think I'm actually over-insured for the "hull and spars". Hopefully I'd get back my equipment's costs, at cost less depreciation.

 

[Tranona]

Thanks for all the replies so far.
I have copy/pasted them in an e-mail and forwarded them to my friend.

At the moment he's trying to find out whether his policy is agreed value or market value.
Seems elementary, but he's a bit shook up at the moment.
He's spent the better part of a decade restoring the boat and was about to sail off into the sunset next year.

Anyway, I'll get back if/when there are any further developments.
At the moment, he's still awaiting quotes for the repairs and the decision of his insurers.
I think that the thought of the boat being written off scares him more than anything.

The term "written off" has many connotations. With a car it means that it is classified as having been involved in an accident so all buyers, for example can find out. This, for an older car means it probably becomes difficult to sell.

For boats however all it means is that the cost of professional repairs is close to or exceeds the insured value - that is the insurer will not pay for the repairs. There is no mechanism for this to be recorded against the boat. It is quite common to negotiate a settlement in cash without losing ownership of the boat. I did this after the 1987 storm as the insurer would have paid for the repairs back to the original but I wanted to take the opportunity to make modifications to the area that was damaged plus do the other side of the boat to match. I discussed this with their surveyor and got quotes for a straightforward repair which the insurer paid in cash to settle the claim.

Of course the real question is whether the boat is repairable with the resources your friend has. Worth considering sharing the work with a professional to do the skilled bits and DIY the time consuming lower skilled jobs like stripping out, cleaning, painting (know that is skilled, but something easily DIY) and fund it all or part with the payout from the insurer.

Insurers tend to like this sort of arrangement as they make a one off settlement of the claim and retain a customer. I continued insurance with the same company at no change in terms or premium.

Remember it is his boat and he should try to keep control of the process so he gets the outcome he wants.

 

[Tin Tin]

Just hear back from my friend.

After the initial shock of possibly losing his boat, the dust settled somewhat.
It would seem that the damage was not as extensive as first feared.
The cost to repair his boat amounted to about 20% of the insured value. His insurance therefore approved the repairs.
And from what I have gathered the repairs have since been carried out.

 

[Motor_Sailor]

My experience with boats recently that have gone ashore, is that insurance companies are really reluctant to write boats off. In each of the three cases I have dealt with in the last two years, the insurance company has willingly paid significantly more than the agreed value of the vessel in order to have the boats re-built.

The reason for this is obvious - the costs involved to them for disposing of such a vessel are completely unknown; how long will it be stored? how much to cut it up? how much to send it to landfill? They much prefer to pay a fixed (but generous) amount to restore the boat to its owner than for them to become liable for unknown and ongoing costs.

The situation is different with cars; there is an established industry to deal with 'written off vehicles' and all the costs and procedures are well known. So the only time a company will write a boat off is when there's no chance of it being rebuilt at anything like it's agreed value, either by the state of its destruction or a lack of rebuilding resources at the wreck location.

 

[Guise]

Just hear back from my friend.

After the initial shock of possibly losing his boat, the dust settled somewhat.
It would seem that the damage was not as extensive as first feared.
The cost to repair his boat amounted to about 20% of the insured value. His insurance therefore approved the repairs.
And from what I have gathered the repairs have since been carried out.

Thanks for the update, it's always nice when the OP comes back with the outcome, especially when it's a happy ending.