Insurance valuation, a leap of faith

[LadyG]

So, someone mentioned my boat should be insured at £100K, which is OTT in my opinion, but I've bumped it up quite a bit, just as I did last year, is everyone doing this?

Essentially the boat is in good nick as far as I am aware, and I keep spending another thousand ( this year it's a galley upgrade). I was thinking my max lifespan (boat wise) would be three years, I can't be sure. 

I'm just not sure how much spend is too much, or too little: my rule of thumb is that money spent should be reflected in boat value, but it's just so difficult with inflation, cost of living etc etc.

For example, last year a boat valued at £50K, maintenance and upgrades £2,500?

This year same boat value £60K? Should maintenance and upgrades £3000?

Next year same boat value £70K, maintenance and upgrades £3500?

Am I overthinking it, do I just wait till the boards are on green and put myself through the next lock?

[Naughty Cal]

You are overthinking it (and over valuing it)......................................massively!

[LadyG]

2 minutes ago, Naughty Cal said:

You are overthinking it (and over valuing it)......................................massively!

I did not mention the value on my boat, I mentioned A Boat!

Any boat, today we are looking at new boats costing a good twenty percent more than two years ago, so this must increase the value of the second hand market, just look on Apollo Duck.

The point of the post was not to talk about the value of my boat.

The post is to open a discussion.

This is a forum for discussion.

Edited March 28, 2023 by LadyG

[merline]

You opened by saying someone suggested YOUR boat,

The boat a thing is not very clear, may I suggest at least a capital A? 

And a brief explanation before to clarify it's NOT your boat you are referring to 

 

[Peanut]

The insurers were happy to increase the value of a friend's wide beam by 10% this year.

[Tony Brooks]

1 minute ago, Peanut said:

The insurers were happy to increase the value of a friend's wide beam by 10% this year.

 

Yes, but ow much will they pay in the case of a total loss - I bet it will be THEIR valuation at the time and not the sum insured.

[Peanut]

Quite right, unless you get an agreed value.

[PaulJ]

3 minutes ago, Peanut said:

The insurers were happy to increase the value of a friend's wide beam by 10% this year.

 

1 minute ago, Tony Brooks said:

 

Yes, but ow much will they pay in the case of a total loss - I bet it will be THEIR valuation at the time and not the sum insured.

While this true , what you would pay in an increased premium is peanuts compared to what you will lose if the worse happens and your boat is under insured.

[Slim]

3 minutes ago, Peanut said:

The insurers were happy to increase the value of a friend's wide beam by 10% this year.

Yes, but in the event of a claim they would only pay up to the market value unless the policy specifically states otherwise. 

[Naughty Cal]

21 minutes ago, LadyG said:

I did not mention the value on my boat, I mentioned A Boat!

Any boat, today we are looking at new boats costing a good twenty percent more than two years ago, so this must increase the value of the second hand market, just look on Apollo Duck.

The point of the post was not to talk about the value of my boat.

The post is to open a discussion.

This is a forum for discussion.

I think you should reread what you have written.

 

You specifically mention YOUR boat. 

[LadyG]

12 minutes ago, merline said:

You opened by saying someone suggested YOUR boat,

The boat a thing is not very clear, may I suggest at least a capital A? 

And a brief explanation before to clarify it's NOT your boat you are referring to 

 

 

12 minutes ago, Peanut said:

The insurers were happy to increase the value of a friend's wide beam by 10% this year.

Insurers are happy to take any owners value, but if there is a claim they will only pay out on an independent valuation. Same with house, if you under estimate a house, and it burns to the ground. You won't get a new house the same as the one that burnt down. When valuing a house for insurance purposes you have to overpay because of the cost of reclamation and rebuilding.

 

Edited March 28, 2023 by LadyG

[cuthound]

For the last two renewals I have discussed increasing the insured value of my boat with my insurers.

 

The first year they said I could increase the value by £10k without a valuation survey or to the value proposed by the surveyor with a survey. I chose to increase the insured value by £10k.

 

When I had my BSC last year the surveyor informally said my boat was worth around £30k more than I paid for it in 2014.

 

Last year they said I could increase the value by 10% without a valuation survey, so I did that. I'll see what they say this year. If it is £10k again, the the value will be there or thereabouts less the value of any increase for this year.

[Tracy D'arth]

3 minutes ago, LadyG said:

 

Insurers are happy to take any owners value, but if there is a claim they will only pay out on an independent valuation. Same with house, if you under estimate a house, and it burns to the ground. You won't get a new house the same as the one that burnt down. When valuing a house for insurance purposes you have to overpay because the cost of reclamation and rebuilding.

 

House insurance is a con often because it takes into account the cost of the land as part of the insured value. In the event of a total destruction of the property the land still remains so you have been overvaluing for the benefit of the insurance company.

[Naughty Cal]

17 minutes ago, Tony Brooks said:

 

Yes, but ow much will they pay in the case of a total loss - I bet it will be THEIR valuation at the time and not the sum insured.

This is an interesting point.

 

Insurers seem to pick a value which suits them. The other half is coming across more cases now where insurers are unwilling to pay out more than the value stated on the insurance policy at the time of insuring even if the market value has increased.

 

The devil is in the wording of the insurance documents. Most will not pay more than "market value" unless insured for an agreed value. Some will only insure what you specify on the policy schedule.

 

We have now increased the value the van is insured for by 25% since we purchased it in April 2021 which is in line with market values. Even so replacing it should the worst happen, will be difficult, as it would be with a boat.

 

2 minutes ago, Tracy D'arth said:

House insurance is a con often because it takes into account the cost of the land as part of the insured value. In the event of a total destruction of the property the land still remains so you have been overvaluing for the benefit of the insurance company.

For what little it costs however you wouldn't run the risk of not insuring a house 

 

Wouldn't fancy the rebuld costs of ours coming from my own pocket!

Edited March 28, 2023 by Naughty Cal

[LadyG]

2 minutes ago, cuthound said:

For the last two renewals I have discussed increasing the insured value of my boat with my insurers.

 

The first year they said I could increase the value by £10k without a valuation survey or to the value proposed by the surveyor with a survey. I chose to increase the insured value by £10k.

 

When I had my BSC last year the surveyor informally said my boat was worth around £30k more than I paid for it in 2014.

 

Last year they said I could increase the value by 10% without a valuation survey, so I did that. I'll see what they say this year. If it is £10k again, the the value will be there or thereabouts less the value of any increase for this year.

I'm interpreting that as you failed to keep up with increases over the last ten years, and of course you may have been correct to do so for most of those years, but suddenly prices have risen, and you are happy that the insured value and the market value are now aligned?

[cuthound]

17 minutes ago, Tony Brooks said:

 

Yes, but ow much will they pay in the case of a total loss - I bet it will be THEIR valuation at the time and not the sum insured.

 

I specifically asked this question for the two increases I agreed with my insurance company and have their written agreement to pay out the insured sum provided the boat is kept well maintained and in good condition.

[Tonka]

3 minutes ago, Tracy D'arth said:

House insurance is a con often because it takes into account the cost of the land as part of the insured value. In the event of a total destruction of the property the land still remains so you have been overvaluing for the benefit of the insurance company.

That is not 100% true. We had a large house in Croydon. When we were buying it I asked the surveyor for a valuation for insurance and he told me the land was worthless. So I asked him to find me some land in  Croydon of the same size going free. I am still waiting

[Peanut]

Rebuilding a house costs more than building one from scratch.  The debris has to be removed and heat may have damaged the concrete slab.  Building costs have also gone up.

[cuthound]

10 minutes ago, LadyG said:

I'm interpreting that as you failed to keep up with increases over the last ten years, and of course you may have been correct to do so for most of those years, but suddenly prices have risen, and you are happy that the insured value and the market value are now aligned?

For most of those ten years the boat was a depreciating asset or simply maintained its value. It is only in the last few years that boats have increased significantly in value.

 

Yes I am happy that market and insured values are approximately aligned.

[Richard10002]

18 minutes ago, Tracy D'arth said:

House insurance is a con often because it takes into account the cost of the land as part of the insured value. In the event of a total destruction of the property the land still remains so you have been overvaluing for the benefit of the insurance company.

You seem quite bitter about this?

 

Home buildings insurance is based upon rebuild cost, which is completely unrelated to value, (other than by coincidence).

 

Given that we generally give our insurance companies the rebuild figure, (often on the advice of a surveyor), I don't see how it can possibly be a con by the insurance company?

 

 

[Phoenix_V]

42 minutes ago, Richard10002 said:

You seem quite bitter about this?

 

Home buildings insurance is based upon rebuild cost, which is completely unrelated to value, (other than by coincidence).

 

Given that we generally give our insurance companies the rebuild figure, (often on the advice of a surveyor), I don't see how it can possibly be a con by the insurance company?

 

 

That is correct and if you don't want to take the time to find out the estimated rebuilding cost plenty of policies out there which don't need this just ask what type / size house

1 hour ago, cuthound said:

 

I specifically asked this question for the two increases I agreed with my insurance company and have their written agreement to pay out the insured sum provided the boat is kept well maintained and in good condition.

Marine policies (as distinct from motor) used to be "agreed value" and paid out the sum insured in the event of a total loss (unless fraud involved) but I think some are now just market value and if you overestimate the value you are wasting your money conversley if you underestimate may not get full payout. It will be in the policy wording which it is.

[Arthur Marshall]

I just regard insurance as basically a swindle, so ignore it as much as possible. All my houses have been insured which has been free money for the companies. Most of my cars were 3rd party, and would be now except it's virtually the same as fully comp. The boat has always been 3rd party + recovery if it sinks.

I've asked before on here - how many people have ever made a claim on their insurance? And got back more than they would have saved on premiums otherwise? I'd set up a survey, but apathy has struck again.

 

[harleyj]

 

5 minutes ago, Arthur Marshall said:

I just regard insurance as basically a swindle, so ignore it as much as possible. All my houses have been insured which has been free money for the companies. Most of my cars were 3rd party, and would be now except it's virtually the same as fully comp. The boat has always been 3rd party + recovery if it sinks.

 

I've asked before on here - how many people have ever made a claim on their insurance? And got back more than they would have saved on premiums otherwise? I'd set up a survey, but apathy has struck again.

 

We made a claim in early 2020 when water entered the engine via the exhaust and were extremely happy with the pay out.

Because we now had a new engine in a 2002 boat and quite a bit of other work done we wanted to increase our insured value which our insurance  company required a survey valuation. We went back to them with a written valuation from our local broker, which they accepted.  It is now insured for more than 50% above what we paid for it in 2015.

 

 

 

 

[Graham Davis]

1 hour ago, Tracy D'arth said:

House insurance is a con often because it takes into account the cost of the land as part of the insured value. In the event of a total destruction of the property the land still remains so you have been overvaluing for the benefit of the insurance company.

My understanding and reading of my house insurance is that includes the restoration of the land if required, so for example, after a fire the removal of any contaminated soil and it's replacement, plus the rebuilding of the property.

[Alan de Enfield]

2 hours ago, Naughty Cal said:

I think you should reread what you have written.

 

You specifically mention YOUR boat. 

Don't confuse her with the facts, she'll just modify her post.