Insurance Claim - Yacht Valuation Problems

[TradewindSailor]

My boat was badly damaged in an accident in a boatyard. The boatyard excepts responsibility but has put the matter in the hands of their insurer's.

The insurer's solution is to pay me £17,000 for my 36' ocean-going yacht, including all the £14,000 odd navigation goodies I put on during a recent refit.

I had the boat surveyed by a reputable surveyor .... CEng, MRINA, etc ..... and he placed a value on it at about £60,000.

The boat was built in the late 60's and was rebuilt by me in 2000 and 2001. It has also completed two trans-Atlantic crossings with no problems ..... and was a seriously go-anywhere yacht with wonderful sailing characteristics.

My problem is that the insurer's are valuing the yacht on a 'book' or 'sold' prices ....... which would have been low even when I bought her prior to her rebuild.

As they are taking no notice of the Survey valuation ...... I have resorted to taking legal action.

Has anyone out there got any bright ideas how I can get them to see reason?

 

[fluffc]

The insurers can offer what the like to try and settle the claim, but ultimately they are responsible to put the damage right to as before the incident.

If they insist on this route, then put the pressure on them to find you a comparable yacht in the same condition and with the same amount of quipment.

I think they are having a laugh, and just trying it on.

 

[rwakeham]

which insurance company is it ?

 

[Allan]

Sorry to hear of your plight and also sorry to say I can't help that much. I would suggest the first thing you should do is to name the company. After all there are a lot of people on here who insure their boat, car, house and business. When the insurers realise their mistake and pay you a fair sum we will all see what a good company they are and consider using them in the future. I would also suggest that your claim is with the yard, I think the fact they chose to insure is their problem, not yours.
Allan

 

[Poignard]

Surely your first step is to make a claim on your policy and then it's up to your insurers to recover what they can from the other party. If you are not insured then you are going to need a solicitor. Can't see you getting a fair settlement without professional help.

 

[AlJones]

I wish you all the best! Fight the B's.

What is the difference between insuring a £14,000 and a £60,000 boat? I bet there is one.

Would love to hear the outcome.

As I said, all the best,

Al.

 

[Guest]

Try serving a winding up order on the boat yard for not paying their debts. My brother did it to a major company by having it served personally on the chairman in London. They paid out instantly.

I've just won a case against a insurance company by proving that they were negligent. Sadly it was their own solicitor that let it out of the bag! Just keep going and do not let any detail go. Certainly do not give them a minute of silence unless they give you a time scale of the next action that they need to do.

Ask them to find an equivalent boat? Then you have a 1 to 1 comparison that a surveyor can tear apart.

Been away a while, but it seems the problems of sailing have not changed. Electrical, insurance...
Good luck

 

[Birdseye]

[ QUOTE ]
The insurers can offer what the like to try and settle the claim, but ultimately they are responsible to put the damage right to as before the incident.

If they insist on this route, then put the pressure on them to find you a comparable yacht in the same condition and with the same amount of quipment.

I think they are having a laugh, and just trying it on.

[/ QUOTE ]

Nonsense. Your claim is against the yard. The yard's insurance company indemnitifies the yard against your claim. The insurance company have no responsibility to put your damage right or to find you another boat unless it is written into their contract with the yard. Unlikely.

Whats more, insurance companies are used to being hassled. How often do you hear someone say their insurance claim payout was over generous? Everyone thinks their property was worrth more than they were offered.

Having said all that, your right is to be put back in the position you would have been had there been no accident. The vauation your surveyor gave may well be an "insurance valuation" , a figure which is not related to what you paid for the boat or what it was worth before the accident. So try and assemble a dossier of prices for similar boats from the local brokers. Evidence of value is what you need.

Lawyers can be very expensive , take ages, and still not get anywhere.

 

[Aeolus]

As Birdseye points out, your claim is against the yard, not against their insurers. You should send the yard a demand for the full value of the boat, supported by your surveyor's valuation.

Although solicitors are expensive, there are ways of wording such demands that will make subsequent steps (court, foreclosure etc.) simpler and, since you are at risk of losing £46,000, a slice of that on legal advice may be worthwhile. You may even be able to add the legal fees to your claim.

 

[PaulR]

as said note that the insurer is not your insurer but is the yard liability insurer- their sole objective (not unreasonably) will be to pay the claim being made against their policyholder (the yard) at minimum cost to themselves.

if the damaged boat is a standard production model with a recognised and easily established 2nd hand market value then the claim, if the boat is beyond repair, is relatively easy to quantify ,

on the other hand if your yacht is less common then establishing a value is much harder- my approach if it were mine would be to do some serious research to establish the availability of what might reasonably be argued as comparable boats and their selling (not asking) price and produce that information as evidence to support my claim against the yard.

by way of an example, some years ago my wifes car was written off in an accident by a third party who proceeded to offer next to nothing for it as it was x years old - I was able to obtain a much !! fairer settlement by showing that she had owned it from new, the exact history and mileage and by that show that the offer they had made would not fairly reflect the cost to us of buying an EQUIVALENT replacment- yes we could get a 2nd hand car of same age for their offer - but not a 2nd hand car of equivalent age, history and mileage and condition which is what our claim (and yours) is fairly based on.

doing the homework will pay off either in proving the insurer wrong or showing that perhaps they are right.

re survey valuations - does anyone actually take them seriously? seems to be a growing market in numerous areas such as boats, classic cars, jewellery - where the so called "valuer" states a figure but in practise such figures seem so often to be much higher than the market value of the items described - would you have paid the "valuation" figure for it if you were buying?

one final point - I suspect that in addition to the "agreed" cash value for the boat you may have a valid claim for the hassle and grief involved - if you could pop down to tescos and buy an identical replacement then it would be easy but with boats always more challenging - all part of the negotitation to achieve a satisfactory final figure,

good luck!

 

[Pye_End]

As a matter of interest, what values have you got on your policy?

 

[Guest]

[ QUOTE ]
The insurers can offer what the like to try and settle the claim, but ultimately they are responsible to put the damage right to as before the incident.

If they insist on this route, then put the pressure on them to find you a comparable yacht in the same condition and with the same amount of quipment.

I think they are having a laugh, and just trying it on.

[/ QUOTE ]

I think you'll find that TCL is in effect being called on by them ....

Total Constructive Loss .... which is their option and they will use Loss Adjuster and Market valuations not other to decide what they pay you. I have had this situation personally and its a difficult one to be in as normally Ins Underwriter is the factor who wont back down.

I solved it by arguing that if they did TCL - then they would have problem to sell on a damaged yacht and probably not recover what they pay out ... Finally we agreed same pay-out and I kept the yacht.

One other thing .... some brokers do not protect the client - they protect the Underwriter .. without UW - they have no foundation to biz.

It is not only in boats this problem ... look at Cutom Cars etc. no matter what value you insure at - they love "over-value" - makes premiums higher ... the crux comes when they calculate value for pay-out.

You may be able to contact Ombudsman .. but they "in-house" so ????

You have to tough it out .... argue and bang the table ... be a right PITA ....

 

[ean_p]

Can you not insist on the boat being repaired to a condition reasonably similar to that which it was in prior to the accident. Refuse financial compensation. then the costs involved are academic to you. We had much the same thing in a claim we made against a yard accident . And though we involved our insurer's who in reality paid us a sum in lieu of repair , the level of that sum was much much higher then that banded about in the early stage's. The reason we felt was that we constantly suggested that we would like repair and that as the skills required where not available then repair would mean transport to Holland or something similar. In the end they (our insurer's) payed up on a list of quotes that would encompass the repair and we took the money in lieu of. They then went hard at it to recover the money from the other sides insurer's which they did but for a couple of hundred. At no time did we have any dealings with the other side at all. One point that our insurers surveyor made (and he is hugely experienced in this field) is that boat insurence is not the same as car insurence and also remember that he was their surveyor, the other side had their own surveyor and had we had forsight then we would have had our own surveyor too.

 

[Guest]

[ QUOTE ]
Can you not insist on the boat being repaired to a condition reasonably similar to that which it was in prior to the accident. Refuse financial compensation. then the costs involved are academic to you. We had much the same thing in a claim we made against a yard accident . And though we involved our insurer's who in reality paid us a sum in lieu of repair , the level of that sum was much much higher then that banded about in the early stage's. The reason we felt was that we constantly suggested that we would like repair and that as the skills required where not available then repair would mean transport to Holland or something similar. In the end they (our insurer's) payed up on a list of quotes that would encompass the repair and we took the money in lieu of. They then went hard at it to recover the money from the other sides insurer's which they did but for a couple of hundred. At no time did we have any dealings with the other side at all. One point that our insurers surveyor made (and he is hugely experienced in this field) is that boat insurence is not the same as car insurence and also remember that he was their surveyor, the other side had their own surveyor and had we had forsight then we would have had our own surveyor too.

[/ QUOTE ]

The Loss Assessor vs Loss Adjustor situation ...

 

[jamesjermain]

I'm sorry to be a bit of a party pooper, but I find your surveyor's valuation of your yacht rather odd. On the open market, a late sixties 36ft cruiser would be doing well to fetch £25,000 and brilliantly to fetch £30,000.

I don't know what damage the boat suffered but I imagine the £14,000 worth of electronics probably survived and could be transfered to a new boat. In any case, the value, for insurance purposes, of even one year old electronics would be a small fraction of the cost new.

I don't think the yard or the insurance company is obliged to do anything more than either repair the boat to the condition it was in before the accident (old for old) or provide a replacement boat in the same condition or, failing these two, offer a sum of money equivalent to the lesser value of the two options above.

A replacement boat could be found for considerably less than £60,000, if maybe a little more than £17,000.

 

[TimfromMersea]

Was the yacht insured by you? if so, the value that you put on it is the value that you will get if you make a claim. A yacht insurance is normally a 'valued policy', i.e. the insured value is paid out if there is a claim.

I suggest that you claim from your own insurers and they should pay the full value of the yacht as you have specified. They will then have the right to 'subrogate', i.e. stand in your shoes and take over the claim, against the yard and indirectly the yard insurers. If they can get their claim money they have paid you back then great for them, and you won't lose any No Claims Bonus, but if they can't then tough luck on them, you've still had your money.

If you were not insured yourself then it's a lot more difficult.

The yard are responsible to you in breach of contract and/or negligence. The fact that they have passed the financial consequences of that liability on to an insurance company is their business and not yours. To achieve business efficacy the responsible party's insurance company often deal with the claimant direct but if legal action is taken then it is against the responsible party and not their insurers that you will fire the legal guns.

The problem with expert evidence is that the Courts are full of cases where the expert appointed by one party says one thing, and then an equally competent and qualified expert appointed by another party says the complete opposite. They hardly ever agree.

And no-one ever gets rich from litigation except lawyers!

Suggest claim from your own insurers first and then leave them to fight the other insurers to their heart's content.

Good luck!

 

[duncan]

all pretty solid

be nice to here from the OP again sometime - especially with regard to his own insurance valuation which, as has been raised by others, could have some bearing on the situation he finds himself in.

overall there is clearly scope for resolution although I would also be interested in the relationship between the amount offered and the estimate to repair. You could get a lot of repair work for that money on a boat that size! (yes I know the initial offer was based on transfer of yacht but it would help to understand what's going on).

Finally is there not a danger that in refusing an initial offer he will have to 'win' an increased offer in order to be successfull in his claim for delay costs going forwards from the time of the offer? This might make me reticent to 'go large' on this element in isolation but retain it as an element of any eventual settlement.

 

[DRANNIE]

Its not nonsense, although the yard are the Defendant, unless the yard has £60k lying around to settle claims you are looking to their insurer. If the insurer 'does not have a contract with the yard' why on earth are they offering money in the first instance??? The sum in dispute is well in excess of the small claims limit, this is not something to tackle yourself legally unless you know what you are doing.
Sensible suggestions:

1. Use your boat insurance (if you have it) to claim and recover the loss and them let them sort it out with the other insurer. lost no claims v £45k is no contest. You will avoid 2 years legal wrangling and will be back in the water much sooner.

2. If uninsured have a look at any other insurance policies you might have such as home contents etc to see if you have legal expenses cover, then go and see a firm of solicitors with a decent civil litigation department. There is £45k at stake, a solicitor will be able to advise on the practical next steps including issuing proceedings if that will move matters forward.

 

[TradewindSailor]

Many thanks to all for your views and support.

First, I am currently in the West Indies whilst I am dealing with this claim.

My access to the intrnet is limited so I can't reply as often as I would would like.

I insure myself as have found it impossible to get insurance for the ocean sailing that I enjoy.

I am not currently willing to name the boatyard or their insurers as we are currently involved in a legal process. My intention from the post was to try and ensure that I had taken all the relevant steps to support my claim ..... there's a wealth of knowledge and experience out there: so tap into it!

The valuation figure of £60,000 is that of a Replacement Yacht on the UK market. The insurer's offer is based on the US market for a similar age yacht .... BUT without the benefit of a full structural rebuild and equipment refit.

The legal advice I have down here is that Replacement Value on the UK market is supportable ....... but this is not agreed by the insurers!

James Germain .... what value would you have placed on Gypsie Moth just after the refit? If it was written off as beyond economic repair what value would you find acceptable? By the way I haven't kept up to date with Gypsie Moth so I have no idea how the project has faired.

My yacht has a certain specification. The main difference from a standard yacht is that it has a raised deckhouse that allows me to have good visibility whilst navigating in a well protected and comfortable sitting position. It also has two permanent double berths and a pilot berth ..... all in a 36' er.

If I accepted the insurer's offer I MAY be able to purchase a similar condition American boat to the one I purchased in February 2000 ...... before 18 months of hard work and expense. The boat would have to meet the current RCD requirements (if it was not originally built in the EC, or one of the exclusions apply) and VAT and import duties would have to be paid in order that I could put it into service in European waters.

I'll have some more comments ..... later

 

[jamesjermain]

With regard to the value, £60,000 would nearly buy you a new 36 footer in the British market. You have clearly invested a lot in this boat but the sad fact is that much of it will not be reflected in uplifted secondhand value. The addition of a raised deckhouse may well make her a better yacht for you but may also limit her market as she is no longer a standard boat (this depends on what she is and how popular the original design was).

PS: Gipsy Moth is now nearing the end of her circumnavigation and will be returning to Lymouth on 28 May - 40 years to the day after Chichester's triumphant return. GM had an incident filled voyage including, you may not have heard, a grounding on a South Seas reef which cause extensive damage and required a very expensive refit in New Zealand.