Renewing insurance and valuing my boat

[doratheexplorer]

I've just been renewing my insurance.  I've been with the same insurer since I got my boat, and the valuation has always been the sale price of my boat.  This year, boat prices have soared so I asked to insure it for a higher value.  My insurer wouldn't have this and said it had to be the sale price or I would have to get it valued by a surveyor.  This seems weird to me, because when I originally insured it, they just took my word for it on the sale price, I could have said anything.  So I've renewed with another insurer who was a lot cheaper and is happy to insure the boat for the revised value.

 

Thoughts?

[IanD]

Insurance for things like houses/boats is normally based on the cost to replace or rebuild it or buy another one, on the principle that it puts you back into the same situation you were beforehand -- no better but also no worse.

 

If the only realistic option is to buy another one -- which is the case with a boat -- then the insured value should be *at least* the cost of doing that, not what you bought it for -- so in today's market it should go up.

 

If you insure it for less then the insurer will only pay out the lesser value because that's all you paid premiums for, so they lose nothing but you can't afford another boat.

 

If you insure it for more by inflating the value them you'll pay a higher premium, but if you make a claim a loss adjuster will knock it back to the cost of replacement, so they win.

 

So most insurers don't care what valuation you put on the boat, they'd be happy if you inflated the value above the real one because you'll pay more in premiums but they'll only pay out the real value if you claim...

Edited March 22, 2021 by IanD

[frahkn]

16 minutes ago, doratheexplorer said:

I've just been renewing my insurance.  I've been with the same insurer since I got my boat, and the valuation has always been the sale price of my boat.  This year, boat prices have soared so I asked to insure it for a higher value.  My insurer wouldn't have this and said it had to be the sale price or I would have to get it valued by a surveyor.  This seems weird to me, because when I originally insured it, they just took my word for it on the sale price, I could have said anything.  So I've renewed with another insurer who was a lot cheaper and is happy to insure the boat for the revised value.

 

Thoughts?

When I first insured my boat (it was not new) the insurer asked for the surveyor's confirmation of the value. Steve Hands was happy to provide me with this.

 

I did not wish to provide the insurance company with a copy of his full survey.

[doratheexplorer]

9 minutes ago, frahkn said:

When I first insured my boat (it was not new) the insurer asked for the surveyor's confirmation of the value. Steve Hands was happy to provide me with this.

 

I did not wish to provide the insurance company with a copy of his full survey.

So they just took your word for it?

[Tracy D'arth]

What you are asking is for an insurance company to insure for an "Agreed Value" rather than market value, current value or purchased cost price. It is common in the vintage car fraternity, but many boat insurers  won't do it.

Insurance premiums for canal boats are incredibly low anyway relative to other risks.

[Alan de Enfield]

 

Last year, Lloyds announced that in future no insurers will be allowed to insure boats for 'agreed value' and must only offer 'market value' cover.

 

I have previously posted copies of letters from Lloyds on the subject.

[frahkn]

6 minutes ago, doratheexplorer said:

So they just took your word for it?

Sorry, I was not clear.

 

Steve just repeated his valuation (as given in his survey report) on a sheet of his headed notepaper. He did this for free, the insurance company was happy and so was I.

[Alan de Enfield]

1 minute ago, Alan de Enfield said:

 

Last year, Lloyds announced that in future no insurers will be allowed to insure boats for 'agreed value' and must only offer 'market value' cover.

 

I have previously posted copies of letters from Lloyds on the subject.

 

Once such thread :

 

Surveys and insurance requirements - Boat Building & Maintenance - Canal World

[doratheexplorer]

1 minute ago, Alan de Enfield said:

 

Last year, Lloyds announced that in future no insurers will be allowed to insure boats for 'agreed value' and must only offer 'market value' cover.

 

I have previously posted copies of letters from Lloyds on the subject.

So does that mean that in the event of a right off, the insurer will make a judgement on the vessel's value irrespective of what the insurance schedule says?

[Alan de Enfield]

Just now, doratheexplorer said:

So does that mean that in the event of a right off, the insurer will make a judgement on the vessel's value irrespective of what the insurance schedule says?

 

 

Yes.

(Based on the value before whatever has caused it to be a write off)

[peterboat]

My boat builder has given me a valuation of my boat which the insurance were happy to accept 

[doratheexplorer]

1 minute ago, Alan de Enfield said:

 

 

Yes.

(Based on the value before whatever has caused it to be a write off)

That makes me question even more why my original insurer wouldn't accept my revised valuation, when they would accept my original valuation (without any back up evidence).

 

I'd be interested in the loss adjuster's methodology for valuing a boat after it's completely burnt and then sunk.  How could they reasonably determine its prior value?  My new insurer knows:  Age, length, engine.  And that's about it.

2 minutes ago, peterboat said:

My boat builder has given me a valuation of my boat which the insurance were happy to accept 

Lots of people missing my point here.  Boats have unusually risen in value over the last 12 months.  Therefore it unsuprising that many owners would like to increase their insurance valuation.  If it can be determined that boat prices have increase on average by 20% then why can't insurers accept that and quote a little higher to allow for it?

 

But then if Alan is right, and the insurer will decide on the valuation themselves after a write off, then why even ask for the boat's value before insuring?  They could just ask a series of question on what the boat is, and how it's used, and quote based on that.

[Slim]

I fitted my boat out from a bare shell. Initially it was insured at hull purchase price. When I had half finished they wanted a valuation. I got this from my local marina that did some boat sales. One page of basic fit out info. They accepted the valuation without question. Some years later I wanted to up the insured value. They wanted to go through the process again. I just switched insurer who accepted the value I put on it. Who knows what they would pay out. As an aside my car insurance is due soon. When I got an on line quote from my present insurer I wasn't even asked it's value. 

[Alan de Enfield]

Just now, doratheexplorer said:

How could they reasonably determine its prior value?  My new insurer knows:  Age, length, engine.  And that's about it.

 

That is why they have experienced insurance loss adjusters

 

We had 'great fun' when the Jag was T-Boned, written off and our Daughter in law broke her back.

.

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[pearley]

12 minutes ago, Alan de Enfield said:

 

Last year, Lloyds announced that in future no insurers will be allowed to insure boats for 'agreed value' and must only offer 'market value' cover.

 

I have previously posted copies of letters from Lloyds on the subject.

Does 'average' count here? If you have under valued your boat is any payout in proportion to your valuation and market value?

[Slim]

7 minutes ago, peterboat said:

My boat builder has given me a valuation of my boat which the insurance were happy to accept 

Yes, but what would they base their payout on ? That's the important point.

[Alan de Enfield]

Just now, pearley said:

Does 'average' count here? If you have under valued your boat is any payout in proportion to your valuation and market value?

 

My insurance states that if you have undervalued your boat, 'tough' that is the maximum they will pay out, but, it may be less if the loss adjuster decides its market value is lower than your cover..

[peterboat]

10 minutes ago, doratheexplorer said:

That makes me question even more why my original insurer wouldn't accept my revised valuation, when they would accept my original valuation (without any back up evidence).

 

I'd be interested in the loss adjuster's methodology for valuing a boat after it's completely burnt and then sunk.  How could they reasonably determine its prior value?  My new insurer knows:  Age, length, engine.  And that's about it.

Lots of people missing my point here.  Boats have unusually risen in value over the last 12 months.  Therefore it unsuprising that many owners would like to increase their insurance valuation.  If it can be determined that boat prices have increase on average by 20% then why can't insurers accept that and quote a little higher to allow for it?

 

But then if Alan is right, and the insurer will decide on the valuation themselves after a write off, then why even ask for the boat's value before insuring?  They could just ask a series of question on what the boat is, and how it's used, and quote based on that.

No I asked Jonny what its worth and he gave it a market value higher than last year which the insurance accepted, other factors were involved like electric drive and 6KW marine genny 

6 minutes ago, Slim said:

Yes, but what would they base their payout on ? That's the important point.

A market value which is what Jonny gave me

[doratheexplorer]

10 minutes ago, Alan de Enfield said:

 

My insurance states that if you have undervalued your boat, 'tough' that is the maximum they will pay out, but, it may be less if the loss adjuster decides its market value is lower than your cover..

Which explains why I wanted to up the value on mine.  I know I'd get more than I paid for it now so why would I stay with an insurance company who makes me get a survey to prove it, when any payout would only be based on their assessment anyway?

[Alan de Enfield]

2 minutes ago, peterboat said:

A market value which is what Jonny gave me

 

 

The problem, as I see it, is that the 'market value' suggested by the Loss Adjuster will not be the same as the owners perception of the 'market value'.

 

There is no "Kellys Blue Book" for boats as there is for cars, every boat is an individual, no two boats are the same, one boat may have a value of £50,000, but another 'identical' boat has Lthium batteries and electric motors that cost £30k to install - is the value of the 2nd boat £30k more than the other one, or, a proportion of that £30k more, or valued at the same as boat one.

 

That is why you should employ your own Loss Assessor to argue against the Loss Adjuster's valuation.

[peterboat]

1 minute ago, Alan de Enfield said:

 

 

The problem, as I see it, is that the 'market value' suggested by the Loss Adjuster will not be the same as the owners perception of the 'market value'.

 

There is no "Kellys Blue Book" for boats as there is for cars, every boat is an individual, no two boats are the same, one boat may have a value of £50,000, but another 'identical' boat has Lthium batteries and electric motors that cost £30k to install - is the value of the 2nd boat £30k more than the other one, or, a proportion of that £30k more, or valued at the same as boat one.

 

That is why you should employ your own Loss Assessor to argue against the Loss Adjuster's valuation.

But the valuation gives me a better chance than not 

[Alan de Enfield]

2 minutes ago, doratheexplorer said:

I know I'd get more than I paid for it now so why would I stay with an insurance company who makes me get a survey to prove it, when any payout would only be based on their assessment anyway?

 

 

You only know what you'd get for it when you sold it - That is why they say, if you want to increase the value, prove it. A (approved insurance valuation surveyor) will have a better idea of market prices.

 

You (I) can understand the stance the insurers are taking.

 

Say :

 

I have insured my oil tanker for £50,000,000, but I know it needs serious work doing costing £20,000,000 so I up the insurance value by £10m, go to sea and scuttle it, instead of getting £30m I now get £60m

Fraud.

[doratheexplorer]

4 minutes ago, Alan de Enfield said:

 

 

You only know what you'd get for it when you sold it - That is why they say, if you want to increase the value, prove it. A (approved insurance valuation surveyor) will have a better idea of market prices.

 

You (I) can understand the stance the insurers are taking.

 

Say :

 

I have insured my oil tanker for £50,000,000, but I know it needs serious work doing costing £20,000,000 so I up the insurance value by £10m, go to sea and scuttle it, instead of getting £30m I now get £60m

Fraud.

I don't need to prove it.  I went with another insurer who didn't question my valuation.

[TheBiscuits]

8 minutes ago, Alan de Enfield said:

I have insured my oil tanker for £50,000,000

 

I know Sea Wolf has large fuel tanks, but I didn't think they were that big!

[David Mack]

Years ago I found you could ask the insurer to up the value by a small amount each year on renewal, to cover inflation, and most insurers would do this. But you couldn't leave the value unchanged for a few years and then ask for the corresponding increase in value in one hit without a new valuation.

More recently I had this discussion with a professional insurance adviser. The insurance companies will now only insure on the basis of a written valuation. This could be documentation confirming the price paid or a surveyor's valuation. So if you think the boat has increased in value during your ownership, you need a proper valuation to substantiate this. And presumably many of us are now going round in under-insured boats.