Insurance hassle

[Pinkatpole]

Anybody capable of giving me a written proffesional valuation of my completed fit out, for insurance purpose. Live in Nottingham, boat is moored at Chapel Farm, Shardlow.

 

Insurers will not insure it for anything more than the total build cost @£40,000, with proof of spending ie receipts spreadsheets etc.

 

I have asked for an insurance value of £60,000 which adequately reflects its true value now completed, with the estimated £14000 in labour hours, based on a rate of £10.00 per hour, added to the build costs.

 

I have explained to the insurance company that I have received verbal valuations, placing the boat at current market rates in the £60,000 to £70,000 bracket, but they are insisting on a written valuation.

 

The insurance company is in full agrreement with me that I should not under value it for insurance, but they will not move on anything less than a written valuation.

 

They suggested using the local boat brokers, but none will give written valuations for exactly this reason. People wasting their time getting insurance valuations with no hope of brokerage business.

 

Catch 22

[Oliver]

Pinkatpole

 

There is a lengthy thread on insurance in General Boating. Suspect it will not help you because no-one found a way of insuring a new boat for replacement value rather than cost

 

Insurance Thread - General Boating

[David Schweizer]

It is very unlikelythat you will be able to find an insurer who will cover your boat for more than you paid for it. Think about it from their point of view. You buy a boat for forty grand, insure it for sixty grand and push it over a weir - twenty thousand profit. You may not have thought of it, but they have, and there are criminally minded people out there who have as well.

 

As far as valuation is concerned I would suggest that you contact one of the smaller independant brokers, someone like Virginia Currier and ask her to give you an written estimate of the boat's value. You will obviously have to pay a fee but it may just be worth it.

 

Having said that I doubt whether you will get anyone to value a boat at 50% more than it cost to build. That may be what it would cost to start building today but would you be able to sell it for that amount? That is what the Insurance Company is intetrested in. As far as they are concerned as soon as the boat leaves the yard it is second hand and they will only shell out the cost of what a second hand (albeit almost new) comparable boat would be, not what it would cost to build a new boat.

 

At the end of the day, the liklyhood of suffering a total loss is so small that rationally it is probobly not worth worrying about, even if it is annoying. In a couple of years you can get a re valuation done, possibly with a different Insurance Company, and things may even out a bit. If it helps I had my elderly boat re-valued last year from twenty thousand six years ago to twentyeight thousand this year, and I found an insurance company willing to undewrite that valuation.

[Richard Bustens]

Surley when you insure your boat you insure it for replacement value at todays market prices.

[David Schweizer]

As I understand it, boat insurance does not work on a new for old principle, it works on exactly the same basis as car insurance. If you suffer a total loss you will be reimbursed the assessed selling valuation, which with a nearly new boat will usually be less than what you paid for it.

[Richard Bustens]

Hi David

But cars depreciate where as boats like houses apreciate in value

[Paul Evans]

Richard, that might seem sensible but insurance companies simply won't do it. They will insure it for what it cost you to build or buy because you can prove that you incurred the cost. As David says, it may be possible to insure at replacement value - secondhand value - in a few year's time but until then you are stuck with actual cost.

[Gary Peacock]

We get asked to do quite a few insurance valuations including valuing self builds. A valuation and actually being paid that amount in the event of a disaster are two different things. But there must be companies out there who request and accept these valuations rather than the actual itemised cost of purchase.

How would you quantify the cost of your own labour on a self build £5, 10, 20 per hour?

 

Don't you just love insurance companies!

 

 

Gary

[Bob.Doubles]

The on-line insurance firms allow you to value the boat for whatever you want. However, I suspect that when (or if) they pay out, it would be on the basis of evidence of value in the same way as the non-on-line. So, in fact, you could be paying to insure your boat for, say, £60k for years when the maximum they might ever pay out is a lot less.

 

Anyone confirm this is what happens?

[wynd lass(nb.Black Pearl)]

As Oliver says earlier in this thread, we have both bought rand new boats and we can only insure them at what we paid for them, even thought my boatbuilder told me ours would cost several thousand pounds more today for an identical boat.

 

The only way round it is to get it professionally valued. One major boat insurer said that only then they would accept the grater value.

 

I literally argued for ages about the fact boats arn't like cars etc, but they seem not to be seeing this point (just yet)!

[dor]

Couldn't you write out invoices to yourself for the labour costs, perhaps once a week or month, then include these in your breakdown of costs.

 

After all, if someone else you knew was doing it, they would expect to be paid.

 

Shouldn't cause a tax issue as it would net off - you may even make a gain by deducting expenses from your labour income.

 

Another thought: if planning to do a self-build, is it worth buying an off-the-shelf limited company (they used to be about £60), then the company does the work on the boat, and you then buy the boat from the company. I'm sure I read once about somebody doing this for a classic car they were restoring. (classic cars often face the sme insurance problem - you can spend thousands restoring a car which the insurance company then write off for £50 as an "old banger"). Might be a bit trickier taxwise but I'm sure there are ways round that.

Edited November 17, 2004 by dor

[Pinkatpole]

Couldn't you write out invoices to yourself for the labour costs, perhaps once a week or month, then include these in your breakdown of costs.

 

After all, if someone else you knew was doing it, they would expect to be paid.

 

Shouldn't cause a tax issue as it would net off - you may even make a gain by deducting expenses from your labour income.

 

Another thought: if planning to do a self-build, is it worth buying an off-the-shelf limited company (they used to be about £60), then the company does the work on the boat, and you then buy the boat from the company. I'm sure I read once about somebody doing this for a classic car they were restoring.  (classic cars often face the sme insurance problem - you can spend thousands restoring a car which the insurance company then write off for £50 as an "old banger"). Might be a bit trickier taxwise but I'm sure there are ways round that.

<{POST_SNAPBACK}>

 

I thought of doing that, as I own a currently dormant limited company. Accountants advice was that it was possible, with all the benefits of claiming the VAT back, although you would have to charge VAT on the selling price, but you would be better to do it over 2 boat builds. My missus would kill me if I started another one so soon after finishing the first!

[Paul Evans]

But playing about with that limited company is just going to cost you money - Companies House filing fee, accountants, - so you would just be putting up the cost of your insurance!

 

Given the very low incidence of total losses, I think you will be better off insuring the boat for what it cost you and then paying for a professional valuation after a couple of years. Let's not worry too much about unlikely events - I have enough worrying about whether that next lock is set for me, when the gas/water/diesel will run out, if that pub will be as good as it was last time, whether it will rain......

[Pinkatpole]

Insurance hassle solved.

 

Supplied insurance company with summary of hrs worked.

 

Multiplied by £10 per hr. Stated that this was a very resonable rate, compared to the cost of having it fitted. Total £14400. Added that to the fit out costs.

 

Placed in a nice letter stating that this was what my estimated £60,000 minimum valuation was based on, inclusive of the above labour costs.

 

Clearly stated that I was not willing to under insure the boat, and if necessary I would have to look elsewhere.

 

Hey Presto.

 

Underwriters agree to the valuation, fullcover at £60000. Certificate through today.

[ChrisPy]

But playing about with that limited company is just going to cost you money - Companies House filing fee, accountants, - so you would just be putting up the cost of your insurance!

 

Given the very low incidence of total losses, I think you will be better off insuring the boat for what it cost you and then paying for a professional valuation after a couple of years. Let's not worry too much about unlikely events - I have enough worrying about whether that next lock is set for me, when the gas/water/diesel will run out, if that pub will be as good as it was last time, whether it will rain......

<{POST_SNAPBACK}>

why does it need to be a limited company?

I have operated as a sole trader and had all the benefits with no evident disadvantages