Increasing boat insurance valuation ?

[pragmatist]

We bought our 36' catamaran early in the Covid saga before prices began to shoot up. Since then 2nd hand boat prices seem to have increased markedly. Having looked around we cannot see that we could replace the boat for the purchase price, for which she is insured, in the event of a total right-off and get anything like a similar boat. She is also a rare make/model so there are few sales to backup any change in valuation.

Does anyone have any ideas or experience of discussing an increase in valuation with the insurers ?

 

[Refueler]

The only people that will give a proper answer - are your insurers.

Regardless of whether you have a Valuation Survey done or not - Insurers will decide what figure they will pay out. In most cases - its a depreciated amount and not as originally agreed. I know this to my own cost ... when my S23 was written off - Insurers referred back to Underwriter who depreciated for age and settlement was put at 50% of original insured value. The only solution I could get to that - was to press for the boat to not be scrapped and remain in my ownership along with the offered payout. Underwriter finally agreed as it was then not left on 'his hands' to dispose off. Money was used to repair and boat was then sailed for a number of years before selling on.

If you can get Insurance that replaces Like for Like - then you stand a chance. It all comes down to the type and stipulations in the policy.

 

[Tranona]

Speak to them. Some will accept what you say, but most will want supporting evidence such as known sales at a higher value, a surveyor or broker valuation or evidence that you have added value above the purchase price. When I bought my current boat a value higher than the purchase price was agreed based on the surveyor valuation. I am spending money on replacements and upgrading so when finished I will submit details of this to support another lift in value - not to the total of purchase and expenditure, but to top value based on other sales plus a bit for replacement of the new equipment. Sometimes it is worth changing insurer rather than trying to get the existing one to up the agreed value!

 

[Tranona]

The only people that will give a proper answer - are your insurers.

Regardless of whether you have a Valuation Survey done or not - Insurers will decide what figure they will pay out. In most cases - its a depreciated amount and not as originally agreed. I know this to my own cost ... when my S23 was written off - Insurers referred back to Underwriter who depreciated for age and settlement was put at 50% of original insured value. The only solution I could get to that - was to press for the boat to not be scrapped and remain in my ownership along with the offered payout. Underwriter finally agreed as it was then not left on 'his hands' to dispose off. Money was used to repair and boat was then sailed for a number of years before selling on.

If you can get Insurance that replaces Like for Like - then you stand a chance. It all comes down to the type and stipulations in the policy.

That is just not the case with agreed value insurance. Important to read the policy so you know exactly what is insured and what the payout will be for write off, or the maximum payable for repairs. not all policies are the same.

 

[Refueler]

That is just not the case with agreed value insurance. Important to read the policy so you know exactly what is insured and what the payout will be for write off, or the maximum payable for repairs. not all policies are the same.

Do not disagree with that - except that Insurers will always decide - not you.

As you have indicated - You will provide evidence of additions / improvements that affect valuation. It will still be Insurers decision as to what they accept or reject in terms of that valuation.

Yes - read the policy and stipulations - I already said that.

It will always come down to the difference of Loss Assessor (your guy) and Loss Adjustor (Underwriters guy) for Loss / damages.

I closed my UK based Surveyor business when I moved to Baltics. But during those many years - Surveyors valuations were considered by Insurers but not automatically accepted. In many cases I know of - rejected.

 

[Tranona]

Do not disagree with that - except that Insurers will always decide - not you.

I was disagreeing with your first sentence of the second paragraph. While insurers may or may not accept your valuation before insuring, once they have accepted it that is what they will pay out because that is what the insurance contract says. There may well be a dispute about the extent of damage and cost of repairs, but not about the maximum that will be paid - for example if the boat is a total write off or is stolen. Some policies only insure for replacement and it is there that they will try to minimise the amount they pay as the contract does not specify a sum. It is important people understand the difference when deciding on insurance. Equally it is important to understand that claiming on your own insurance is governed by the laws of contract, whereas claiming direct off a third party is covered by the laws of tort where you are claiming against the other party who joins his insurer so you have to first prove negligence and second determine the value of your loss. This is where the insurer will seek to minimise his payment using methods such as you described.

 

[Refueler]

You can disagree with my 'first sentence of second paragraph' - but having fought the battles with various Insurers as a Surveyor on behalf of clients - I still maintain they will determine what they pay out - subject of course to any binding clause in policy.

I don't disagree that if you have a binding value - then that could prevail - but knowing Insurers and how they squirm - I wish all luck !! And its no good going to Industry Watchdog - as that's comprised of Insurers themselves.

Final comment - I can well believe an Insurer would be happy to increase valuation in policy - premium increase would no doubt be applied. But if Insurer is not bound to that value - its questionable whether you'd receive that in event of loss. The problem is many policys have clauses of depreciation etc. and that's where they catch you.

As already said ... Talk to Insurer ... Look at alternative providers ...

 

[pragmatist]

Thank you all for your useful comments. We have found one boat which has sold recently for significantly more than we paid. The other issue is that our insurer used to be really helpful - easy access to the underwriter to discuss - but since the pandemic it is taking weeks or months for an email to receive a response. Have other people found this with insurers recently ?

 

[Concerto]

Last year I spoke to my insurer at increasing the value due to increased secondhand sales. They would allow upto a 10% increase if supported with documentary evidence like a broker's opinion. Higher increases would require an insurance survey. After chatting with my local broker, he thought current valuation was fair in the current market, so I pursued it no further.

 

[Refueler]

Thank you all for your useful comments. We have found one boat which has sold recently for significantly more than we paid. The other issue is that our insurer used to be really helpful - easy access to the underwriter to discuss - but since the pandemic it is taking weeks or months for an email to receive a response. Have other people found this with insurers recently ?

If you were communicating directly with Underwriter - that is unusual. Underwriters will usually refuse to directly communicate with Insured other than a Fax or Email. Its actually part of the industry setup - that communications are dealt with by Broker - its part of what he's paid for. Access to Underwriter usually only occurs when Broker is unable to solve an issue . An example is when my S23 claim was in progress and I proved Broker acted outside of remit. Broker then refused to deal and it was then down to negotiation direct via Fax with Underwriter.

 

[Graham376]

We bought our 36' catamaran early in the Covid saga before prices began to shoot up. Since then 2nd hand boat prices seem to have increased markedly. Having looked around we cannot see that we could replace the boat for the purchase price, for which she is insured, in the event of a total right-off and get anything like a similar boat. She is also a rare make/model so there are few sales to backup any change in valuation.

Does anyone have any ideas or experience of discussing an increase in valuation with the insurers ?

Yes, we have an insured value which looks far higher than market prices but, it's agreed with insurers because what we purchased was a very basic boat without liferaft, dinghy, radar, windlass, gantry, solar, etc., all of which were added later. Our insured value is what it would cost to replace with a boat of the same model and condition, with similar level of equipment.

Whether they will just accept market prices in some cases having risen to justify your increased value, is something you need to discuss with them and they may want an insurance valuation.

 

[KompetentKrew]

Thank you all for your useful comments. We have found one boat which has sold recently for significantly more than we paid. The other issue is that our insurer used to be really helpful - easy access to the underwriter to discuss - but since the pandemic it is taking weeks or months for an email to receive a response. Have other people found this with insurers recently ?

Exact same experience.

I don't know if it's solely down to the pandemic or not, but Pants were fantastic when I signed up with them in 2019 - I got a phonecall with the underwriter, and he came across really sensible and pragmatic. Emails were replied to quickly - they were so helpful.

Two years later I just feel like I have a combative relationship with them, and I don't dare leave because I'm afraid that anyone else will require an expensive survey or otherwise be worse. An email sent a week ago hasn't been replied to, so I phoned them up today and the lady I spoke to was just harried, couldn't answer any questions and just said "it's been passed to the appropriate department". You must be freakin' busy if you can't manage to answer a 3-line email within a week.

I was reflecting in the shower this evening that I'd happily pay an extra €100 a year if I could phone them up and get the same service I got 3 years ago - to be able to speak to a competent decision-maker about my cruising areas for the next year. It wouldn't take 10 minutes.

 

[Sandyshore]

Interesting comments from Refuler from inside the industry.
I checked with my insurer underwriting agent who confirmed an agreed value policy is precisely that and in the event of a Total Loss that is the figure insurers would pay.
If on the other hand you have purchased a policy based on market value then irrespective of sum insured the insurer is only bound to pay what they or the expert normally the surveyor believe the value of the vessel immediately before the incident .
First check your policy conditions if market value mentioned in the wording walk away and purchase agreed value.
As for increase in value not really any point if you have a market value why pay for an increase that insurers will never pay back!.
Agreed value on the other hand is a contract on a specific value ,hence a valuation report makes sense for insurers to consider.

 

[dankilb]

Interesting thread. I’ve been planning a similar query to GJW. We’ve sunk close to two-thirds of the (2019) purchase price of ours in refit items (equipment/parts - not labour or ‘maintenance’) over the past few years and would like to know where we’d stand in getting that back. Sounds like we need a new agreed valuation going forward.

 

[neilf39]

I tried to get my boat insured value increased after many upgrades such as a new engine, sails, holding tank, hot water etc and they were prepared to add a maximum of 10% to the previous value which was based on the purchase price of the boat (under £20k). Obviously nowhere near what I spent on upgrades but then the value of the boat won't reflect the cost of upgrades, just put it nearer the top of the price bracket for similar boats and be easier to sell.

 

[Tranona]

Interesting thread. I’ve been planning a similar query to GJW. We’ve sunk close to two-thirds of the (2019) purchase price of ours in refit items (equipment/parts - not labour or ‘maintenance’) over the past few years and would like to know where we’d stand in getting that back. Sounds like we need a new agreed valuation going forward.

Yes, start again when the boat is finished, or at a point where it looks at its best and spend the £400 on a survey and valuation. Not only will you get a valuation but you will get a day with the surveyor going over your work and his report will give your insurer confidence. That is the process I am following as in post#3.

 

[Refueler]

Interesting comments from Refuler from inside the industry.
I checked with my insurer underwriting agent who confirmed an agreed value policy is precisely that and in the event of a Total Loss that is the figure insurers would pay.
If on the other hand you have purchased a policy based on market value then irrespective of sum insured the insurer is only bound to pay what they or the expert normally the surveyor believe the value of the vessel immediately before the incident .
First check your policy conditions if market value mentioned in the wording walk away and purchase agreed value.
As for increase in value not really any point if you have a market value why pay for an increase that insurers will never pay back!.
Agreed value on the other hand is a contract on a specific value ,hence a valuation report makes sense for insurers to consider.

Thank you ...

Regardless of what is the item - boat .. car ... house ... Insurers (underwriters) are not a charity and will do all they can to lessen their pay-outs. Too often I have seen actions to void or dispute claims ...

To the OP - yes - approach Insurers - try to get the increased value and TIE it down to Contractural ..... but make sure of all the other wording to see that they cannot squirm out.

I do not normally quote a name or company as often the fault is a one-off or isolated .. !

I will give the tale of woe - and hope that others can learn or use to prevent them from suffering as I did. Lets give the Broker the name NC ...

My Snapdragon 23 was insured with as Tranona likes to keep on about - Total Loss Value Payout. It was contracted as I expected - that on 'write-off' - I would receive the agreed value.

Boy was I in for a surprise.

About 6 months prior to incident - the boat was broken into and sails / gear / various stolen. Forecabin door was ripped off hinges etc. My being in the Mariner Surveyor business (SGS at that time as well as my own Yacht Survey Co - NMS) - I was in good position to provide all evidence etc. Claim was settled .. various other items such as fishing gear paid out by House Contents as well.

Myself and Harry (ex SBS) later sailed to Bembridge from Langstone ... weather took an unexpected turn and we decided to make a run back to Langstone before it got too bad. The S23 had a Yammy 5hp OB .. while motoring out of Bembridge - freak wave and stern dug in - swamping the OB. We ran out the genny from the furling just enough to be safe but power us out.
BANG ... forestay came out of deck .. if anyone knows the S23 - the forestay has a throughbolt with captive nut under deck.
Genn completely unfurled ... was going to break mast ! So up on deck - grab spinny halyard - tension to deck ... while Harry used the furling and sheet to get genny in ... he still has marks on his hands today many years later.
By now we were bouncing on Bembridge shoals with the Fort ahead ...

We had no way to power the boat ... mainsail would risk mast .. OB was waterlogged ... weather by now was easily F7 and gusting.
Called Solent CG advising them of situation ... and Lifeboat was sent out.
The LB of course could not approach due to lack of depth where we were .. so a Rocket Line was fired .. tow line set up and we were dragged of the shoals and back into Bembridge Hbr.
You can imagine that we were in quite a state by then !

I knew the owner of a yard in Bembridge and we agreed - boat would be cared for by them while we took Hovercraft home and made claim to Insurers.

NC were contacted .. claim filed. We had photos and they were sent in post. Bembridge by then had also looked over the boat and reported the damage etc.

Time dragged on .. finally NC sent a letter claiming that I had fraudulently claimed previously and that they were considering action. WOW !!! Note that both Broker and I had signed a Full and Final Settlement Doc after first claim. Supposedly binding both.

Brain cells clicking away - I thought - mmm what has caused this ? I called Bembridge and yard told me a Surveyor had visited the boat and asked specific questions about sails / cabin door etc. As they said - he was not interested in the damages at that time.

Armed with this info .. and I now had the Surveyors identity / contact details .... I called NC and asked why they sent someone to the boat without first advising me ? Second that now that I had obtained a copy of the report - which NC had instructed should not be available to me ... I was going to take action.
I had lengthy discussions with that Surveyor and he admitted that report and findings were basically to void my claims (BOTH !).

Take note that I was a Surveyor with one of the worlds largest and most respected Marine Survey Company's. With that - I confronted NC with all the information of both claims again ... with notice that I would be contacting my Solicitor if necessary.

NC then stated they would not deal with this matter any further, that I was to contact the Underwriter direct via Fax.
This I did and Underwriter stated they do not communicate in any form other than Fax / Email.

The discussions dragged on for months - with Underwriter insisting he had right to devalue the boat based on age. His 'offer' being approx 50% of the Insured value. I contacted the Insurance Ombudsman - who were not not interested - they said I had to settle and then approach them. They were honest and said it was unlikely I could alter the result.

Close friend of mine - Paul - was a solicitor and I had chat with him ... he looked at the paperwork and basically said I would most likely lose.

The final settlement after long drawn out argument : 50% payout - I keep the boat .... instead of them writing it off and then having to dispose themselves. I spoke to Bembridge and we agreed repairs which came to just under the payout. Note that I designed a new stemhead fitting that did not have forestay bolted through deck ...

NC not long after closed up shop and good riddance ...

Later I have used a German Insurance Broker - Mannheimer Nautica ............... what a difference in service. Premiums are much lower, coverage is wider and greater without Geographical limitations as UK do ... I get to talk with a REAL boating person ... and no surveys as long as a Yard and photographic evidence can be provided.

Sorry for the long novel ... but just to show that you may think you are covered - but beware - Insurers are well known for finding a way out.

 

[Refueler]

I tried to get my boat insured value increased after many upgrades such as a new engine, sails, holding tank, hot water etc and they were prepared to add a maximum of 10% to the previous value which was based on the purchase price of the boat (under £20k). Obviously nowhere near what I spent on upgrades but then the value of the boat won't reflect the cost of upgrades, just put it nearer the top of the price bracket for similar boats and be easier to sell.

Sorry to say it ... but boats are like cars ... you can fit all the gear you like - but in the end the boat overall value is what market sustains.

Do not also forget that many items you wish to add to Marine Cover - can be better covered on House Contents ........... honest .. FACT ! House content can be set to include 'portable' items ....