Insurance and why the need for a valuation.

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ifoxwell

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We bought an old boat last November for £4k which we have been restoring over the winter.

Fixed all the problems, rewired, reroped, rerigged, fitted all new instrumentation including wind, depth, chartplotter etc etc.

Just tried to ensure it with GJW for £8k which is still well below the 12k that you sometimes see these advertised for and was told that they would only ensure it for £4.4k without a written valuation....

So I'm looking for other insurers, firms that place value on people improving their boats, any one any suggestions.

Regards

Ian
 
Craftinsure. Do it online and there's no question about what you paid for it.

Alternatively call Barrie at Y Yacht Insurance. He's a very sensible chap.
 
ifoxwell said:
We bought an old boat last November for £4k which we have been restoring over the winter.

Fixed all the problems, rewired, reroped, rerigged, fitted all new instrumentation including wind, depth, chartplotter etc etc.

Just tried to ensure it with GJW for £8k which is still well below the 12k that you sometimes see these advertised for and was told that they would only ensure it for £4.4k without a written valuation....

So I'm looking for other insurers, firms that place value on people improving their boats, any one any suggestions.

Regards

Ian
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Very simple. You are asking them to take the risk from you and they would like an independent opinion that it is worth what you claim it is worth. Of course you may find another insurer that will accept your word.
 
Or, to put it another way: how do they know you are telling the truth? You might have done nothing at all to the boat..... and then it 'mysteriously' disappears/sinks/catches fire. Try getting a car insurer to pay out more than 'book value' just because yours was (according to you) a pristine example.

Having said that, GJW do seem to be particularly formulaic when it comes to surveys/values, although they also seem to have excellent feedback when it comes to claims.
 
As I understand it, boat insurance is completely different from car insurance. With boat insurance, you have an agreed value for the boat, and pay a set percentage of the agreed value as a premium (plus further amounts for 3rd party, etc). On this basis, I can't see why an insurer would want proof of value as, if the value's higher, you'll be paying a higher premium.
 
pvb said:
As I understand it, boat insurance is completely different from car insurance. With boat insurance, you have an agreed value for the boat, and pay a set percentage of the agreed value as a premium (plus further amounts for 3rd party, etc). On this basis, I can't see why an insurer would want proof of value as, if the value's higher, you'll be paying a higher premium.
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That maybe how the hull and machinery insurance part is calculated, but their risk is to put you back in the position you were in before the claim. The insured value is the maximum they will pay in the event of a write of, or, more importantly the cost of repairs. With low value boats like this the write off value can be reached very easily so the insurance company is trying to limit its risk.

Of course GJW may well be saying they don't particularly want to insure low value boats by putting these hoops to jump through, whereas others are quite happy to take the risk based on self declaration of value. So, just a case of shopping around.
 
VicMallows said:
Or, to put it another way: how do they know you are telling the truth? You might have done nothing at all to the boat..... and then it 'mysteriously' disappears/sinks/catches fire. Try getting a car insurer to pay out more than 'book value' just because yours was (according to you) a pristine example.
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pvb said:
As I understand it, boat insurance is completely different from car insurance. With boat insurance, you have an agreed value for the boat, and pay a set percentage of the agreed value as a premium (plus further amounts for 3rd party, etc).
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Classic car insurance is generally "agreed value". For well known makes that is generally fairly easy to check, but sometimes an independent valuation, often from an owners' club, is needed. I have two cars on one agreed value classic policy at the moment, and for those I simply told the insurers what I thought it was worth and why, with some photographs, and they accepted it.

Of course that's a very different situation from claiming that one's fifteen year old Corolla is worth twice what Glass's Guide says because it was shiny.
 
In all my many years as a boat owner I have never disclosed a purchase price to an insurance company (I consider it private & cofidential information). Nor have I to HMRC for VAT purposes. I merely state the value I require and never had a problem - presumably because the values reflected market value of similar craft. Of course the applications to insurance companies were accompanied by surveys to confirm the sea worthyness of the vessels.
 
theoldsalt said:
In all my many years as a boat owner I have never disclosed a purchase price to an insurance company (I consider it private & cofidential information). Nor have I to HMRC for VAT purposes. I merely state the value I require and never had a problem - presumably because the values reflected market value of similar craft. Of course the applications to insurance companies were accompanied by surveys to confirm the sea worthyness of the vessels.
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How many total loss claims have you made?
They may start asking about purchase price when the time comes?
It might be better to have the conversation up front.
If they believe your boat is only worth £4k, that's what they will pay, even if you've paid a premium based on £12k.
 
lw395 said:
How many total loss claims have you made?
They may start asking about purchase price when the time comes?
It might be better to have the conversation up front.
If they believe your boat is only worth £4k, that's what they will pay, even if you've paid a premium based on £12k.
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If I buy a potentially £100k boat off my brother for the nominal £1.00 on the bill of sale why shouldn't I insure it for £100k? I don't expect to only get £1.00 if it becomes a rightoff. Market value and purchase price can be quite separate figures.
 
Just insured it with Craftinsure instead.

As has been said by other, nice and simple on line form, and no questions regarding the purchase price
 
JumbleDuck said:
The hard questions about value are asked when you make a claim, not when you take out the insurance.
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Exactly. The insurers who insist on valuation now are avoiding the hard/disappointing scenario when a claim is made but the value insured was too high and the insurers must refuse to pay

Broadly speaking, a person may only insure a yacht if he has an insurable interest (II) in it. The law behind that is designed to remove the moral hazard of deliberately letting or making the boat sink, or murdering an insured life. If there is no II, the yacht contract is deemed to be a bet (under MIA 1906) making the contract void. Actually the 2005 Gambling Act (I forget its correct name) made bets enforceable without repealing MIA 1906, which looks like a legislative mistake, but the conflict of laws here makes most insurers steer clear of non II policies.

If a boat is valued in the insurance contract for materially more than the financial interest of the policy holder (generally thought to be new price for a recent boat and something broadly similar to market value for an old boat), that is generally a non II scenario. As JD says, you want to be having that debate at inception of the policy not after the boat has sunk

Going back to OP, I would if I were him insure with a firm that adopts the Craftinsure approach (assuming the policy is otherwise ok - I don't comment here on that) but keep a very good file of values of comparable boats and make sure to insure only for a value supported by that file and no more. Then if there is a total loss he has what he needs to deal with any assertion from insurer that he is due no policy payout for lack of II. And I do mean a very good file, not a collection of cherry picked ads from Apolloduck. Imaging you insure for £12k and suffer total loss, and insurer gets 2 surveyors to say the boat was worth £6k. Make a file that will defeat that!
 
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jfm said:
Imaging you insure for £12k and suffer total loss, and insurer gets 2 surveyors to say the boat was worth £6k. Make a file that will defeat that!
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This sort of thing happens regularly in the classic car world. There are some cars which are very easy to value, like a nice Moggy Minor or a 1929 Speed Six Bentley, and there are some which are extremely hard to value, like a concours winning Capri, which might (might!) fetch a bomb if the right OCD purchaser can be found but which may look to the loss adjuster like a nice shiny old banger.
 
Don't rule out actually talking to insurers.
10 minutes on the phone might be better than hearsay on here.
 
The OP has just insured his boat so that is his him fixed up.

Of course the classic scam is to insure to the hilt, and beyond, and then have a timely and deeply regrettable loss. We cannot expect underwriters not to have clocked this.

Faced with a similar difficulty, I went to a local broker and asked the youngest if he would do a private job of valuation for me. I bunged him 50 quid he valued the boat and made out a fancy letter with his string of qualifications attached. Everybody happy at that.
 
I had the same discussion by email with GJW this year. However when i spoke with them they were perfectly happy to receive a list of the work we'd done with our estimates of the yard charges, had a yard done the work, we could then increase the insured value by that amount.

Found them very reasonable when we rang them and discussed it.
 
Tia said:
I had the same discussion by email with GJW this year. However when i spoke with them they were perfectly happy to receive a list of the work we'd done with our estimates of the yard charges, had a yard done the work, we could then increase the insured value by that amount.

Found them very reasonable when we rang them and discussed it.
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Increase the value of a boat by the labour charges ? Hell, I must double my boat's insured value immediately.:) - I don't think so !
 
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