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Old 04-09-2016, 11:00 AM   #1
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Hull depreciation--how common?

My insurance company notified me that my current policy (1987 boat) will not be renewed and the replacement they're offering has a 50% depreciation provision for partial losses -- anything other than full replacement. Coupled with a hefty deductible, this seems to make any serious claim short of scuttling the boat extremely costly for the insured.

Do others have this provision in their policies and do you find it reasonable?

I've been trying to get in touch with Peter Ricks (Pau Hana) but it looks like he's no longer a broker and has taken a job as an underwriter.
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Old 04-09-2016, 11:05 AM   #2
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What insurance co (if you don't mind) as it sounds like one to avoid?


And ANY major changes to a policy for no real positive statistical reason from an insurance company to me NEVER sounds like a good reason.


2 reasons should change a policy dramatically for an individual....their "care" of the insured and their claims record.
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Old 04-09-2016, 11:05 AM   #3
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My insurance company replaced my "agreed value" policy with an "actual value" policy once the boat was over ten years old. I can understand the reasoning because at the agreed value, I could sink it and make a hefty profit.


The question is, how do they determine the actual value?
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Old 04-09-2016, 11:33 AM   #4
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Usually you are charged a price for an agreed upon value based on risk...if you are willing t pay that premium...what is the big deal?


if they can insure singers voices and all kinds of other crazy stuff...no matter the cost....why are they so 'fit in the column" about some things?


I know because they can...but some insurance companies still work with you and that's why I was inferring switch companies if something seems wrong.


BandB seems to have a pretty good handle on insurance issues...let's see if he chimes in.
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Old 04-09-2016, 11:34 AM   #5
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Gimmicks to be watched.

There is nothing preventing changing the agreed value. It obviously should decrease year by year.

Now two of you present different situations. One says their insurer just changed them to actual value, but doesn't mention if any other changes made such as the depreciation change. I don't like actual value and would have asked for an agreement on a new agreed value.

However, the depreciation issue is serious. It means you are highly unlikely to get paid what it costs to make any repairs. Think of your car a moment. One reason your premium doesn't drop much with age is that parts still cost the same. If you have an accident and need a new rear bumper, it costs the same as if that was a new car. Your insurer doesn't say "depreciated value" and pay only 50% of the price of the bumper. You'd never go for that.

Well, that's just what your boat insurer did and I'll bet they didn't cut your premium in half. It becomes a nightmare even in dealing with how they administer it. Although it doesn't work out exactly this way, the theory is that your boat is only worth 50% of new value so they're only going to pay 50% of repair costs since each part is only worth 50%. Well, that's not going to get you going again. It's almost like putting a 50% copay in.

I would never accept that change and would immediately look elsewhere. A 10 year old boat isn't old. If your boat was 30 years old, it would be more difficult. I don't know your insurer, but turn to marine insurers, not homeowners and auto insurers doing it on the side.
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Old 04-09-2016, 11:42 AM   #6
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if they can insure singers voices and all kinds of other crazy stuff...no matter the cost....why are they so 'fit in the column" about some things?


I know because they can...but some insurance companies still work with you and that's why I was inferring switch companies if something seems wrong.


BandB seems to have a pretty good handle on insurance issues...let's see if he chimes in.
I chimed in. And to your point of crazy stuff, it's not the same insurer or same type. You wouldn't go to State Farm or Allstate to get your vocal cords insured or your hands (if a hand model) or your breasts or any of the things we've heard of. You go to people like Lloyd's and others who specialize in insuring anything for a price. Well, many companies will insure boats but I recommend companies and brokers that specialize in it. Pau Hana will likely speak up and he is one who deals with it all the time although he's not gone to work for an insurer I believe. Still, he gives excellent advice based on decades of experience.

There are other brokers and insurers who have been recommended here. Your agent or broker let you down. If they were going to come to you with the change, they should have also come with some alternatives. Likely they're single line though and can't offer others. Most marine brokers insure through many different companies and would have said, "Your insurer, company A, is changing all 10 year old boats to 50% depreciation policies. However, I got you a quote from company B and I'd recommend changing to them." Or they should have said, "I don't have anything else I can offer you, but I'd suggest you talk to xxxx as they often have other options."
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Old 04-09-2016, 02:20 PM   #7
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Gimmicks to be watched.

There is nothing preventing changing the agreed value. It obviously should decrease year by year.

Now two of you present different situations. One says their insurer just changed them to actual value, but doesn't mention if any other changes made such as the depreciation change. I don't like actual value and would have asked for an agreement on a new agreed value.

However, the depreciation issue is serious. It means you are highly unlikely to get paid what it costs to make any repairs. Think of your car a moment. One reason your premium doesn't drop much with age is that parts still cost the same. If you have an accident and need a new rear bumper, it costs the same as if that was a new car. Your insurer doesn't say "depreciated value" and pay only 50% of the price of the bumper. You'd never go for that.

Well, that's just what your boat insurer did and I'll bet they didn't cut your premium in half. It becomes a nightmare even in dealing with how they administer it. Although it doesn't work out exactly this way, the theory is that your boat is only worth 50% of new value so they're only going to pay 50% of repair costs since each part is only worth 50%. Well, that's not going to get you going again. It's almost like putting a 50% copay in.

I would never accept that change and would immediately look elsewhere. A 10 year old boat isn't old. If your boat was 30 years old, it would be more difficult. I don't know your insurer, but turn to marine insurers, not homeowners and auto insurers doing it on the side.
Thanks. My boat is approaching 30 years of age but people who own Defevers don't seem to have trouble repairing them. But your 50% copay analogy is excellent. Unless I am grossly misreading the notification, which is doubtful, the insurance company raised my premium and added the 50% deductible to the replacement policy they are offering. I intend to call them Monday and verify. If that holds true, they have lost me (and anyone who listens to my recommendation) as a customer. I don't want to tar them publicly until I confirm their side of it. After that, I'll post the facts.
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Old 04-09-2016, 03:09 PM   #8
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Thanks. My boat is approaching 30 years of age but people who own Defevers don't seem to have trouble repairing them. But your 50% copay analogy is excellent. Unless I am grossly misreading the notification, which is doubtful, the insurance company raised my premium and added the 50% deductible to the replacement policy they are offering. I intend to call them Monday and verify. If that holds true, they have lost me (and anyone who listens to my recommendation) as a customer. I don't want to tar them publicly until I confirm their side of it. After that, I'll post the facts.
Don't agree until they send you a copy of the policy so you can see how it reads in respect to partial losses. It will either indicate no deduction for depreciation or indicate that they are subject to depreciation. The vast majority of claims are not total losses, but partial claims. The reason I don't like actual value is that it may be difficult to prove to them your boat was in superior condition. Obviously the agreed value should be much less than new and less than when you acquired it.
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Old 04-09-2016, 03:52 PM   #9
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Don't agree until they send you a copy of the policy so you can see how it reads in respect to partial losses. It will either indicate no deduction for depreciation or indicate that they are subject to depreciation. The vast majority of claims are not total losses, but partial claims. The reason I don't like actual value is that it may be difficult to prove to them your boat was in superior condition. Obviously the agreed value should be much less than new and less than when you acquired it.
I have the proposed policy and it indicates a 50% deductible for partial losses. I intend to verify that with the insurer.

I don't concur that the agreed value should always be less than someone paid for a boat. That may apply to newer vessels that are still depreciating, but not for fully depreciated boats that have had many thousands of dollars in upgrades added over the past year. It also ignores what someone might have paid for the boat in the first place.
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Old 04-09-2016, 04:48 PM   #10
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I have the proposed policy and it indicates a 50% deductible for partial losses. I intend to verify that with the insurer.

I don't concur that the agreed value should always be less than someone paid for a boat. That may apply to newer vessels that are still depreciating, but not for fully depreciated boats that have had many thousands of dollars in upgrades added over the past year. It also ignores what someone might have paid for the boat in the first place.
You're right that one might have made upgrades. But if you made those up front they should have been reflected in actual value if not initially, after year one. So, let me rephrase that.

Unless some major work is done on a boat it's actual value should decrease. I don't believe though that any boat is fully depreciated.

The 50% on partial losses would really bother me. For that and the change to actual value instead of agreed your premium should have dropped significantly. I'm betting it didn't.
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Old 04-09-2016, 08:05 PM   #11
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We bought. 1987 41' President last year. BOAT/US insured it for the surveyor's estimated value which was more than I actually paid for it. They did require a survey and I had to take care of the surveyors recommendations. It is an agreed value policy. I then added new electronics and they raised the agreed value to include the electronics. I just had to send them a copy of the invoice for the electronics.
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Old 04-09-2016, 08:20 PM   #12
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The 50% on partial losses would really bother me. For that and the change to actual value instead of agreed your premium should have dropped significantly. I'm betting it didn't.
Yes, as I noted earlier, the premium actually went up a few hundred dollars. They are pretty much history with me.
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Old 04-10-2016, 12:39 AM   #13
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My insurance company replaced my "agreed value" policy with an "actual value" policy once the boat was over ten years old. I can understand the reasoning because at the agreed value, I could sink it and make a hefty profit.


The question is, how do they determine the actual value?
Aye, and there's the rub. My insurance co demands an 'actual', or market value now, and insists on a 5 yrly survey now in view of her age, ostensibly when the actual market value will be reassessed.

Trouble is when I used the surveyor they themselves recommended for this purpose the last two times, when I asked them what they made the actual market values, one responded, asks a broker, I'm just a surveyor. Probably the best answer actually...as the second one valued it so low it was a sick joke, and said he based it on glancing through some boat sales magazines, as he wasn't a broker or valuer either. Go figure who is going to lose out if the boat was lost.
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Old 04-10-2016, 01:23 AM   #14
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08 and 09 my ins cost just under six hundred dollars per year... with good coverage in general and an acceptable, honest stated value if total loss occurred. Then the big storms on east coast f'd up many thousands of boats. Suddenly my annual premium somewhat more than doubled. At first I was pissed off. Then I learned my ins cost is not too bad at all compared to coverage provided, so I decided to grin and bear it. Oh well... share the loss; and, all that stuff. Since then annual cost has crept up slightly... but not too much. Been thinking of going with Paul... just never got around to a new survey. Ins co I currently deal with does not require surveys on regular basis.
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Old 04-10-2016, 02:00 AM   #15
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Seems to me the PO is being told that they don't want his business, but in a strange way. I agree that a specialist marine insurer is the best way to go. I hope you can get hold of Pau Hana - they looked after me well when I was in North America with the boat.

My boat is 35 years old. No problems getting insurance for 'market value'. Agreed value might have been a different story though, and I am carrying some risk as I've spent more than the market value. Policy is with Club Marine, wholly owned by Allianz. The main reason I have the insurance, and am not too concerned about the market value, is the $10 million third party liability.

Deductible varies from hull, motor, equipment or property but maximum is $2000.
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Old 04-10-2016, 03:34 AM   #16
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That`s tough Angus, increased premium greatly reduced cover. An easily resisted offer. Brian is probably right about them not wanting the business, hope you find a more accommodating insurer.We have several marine specialist insurers, I hope you do too. It helps if they understand boats, and owners needs.
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Old 04-10-2016, 06:53 AM   #17
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That`s tough Angus, increased premium greatly reduced cover. An easily resisted offer. Brian is probably right about them not wanting the business, hope you find a more accommodating insurer.We have several marine specialist insurers, I hope you do too. It helps if they understand boats, and owners needs.
This is the strange thing. This is a MAJOR marine insurance firm. Apparently this is a new product they are switching many of their their (soon to be former) customers to based on (I assume) age of the vessel.
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Old 04-10-2016, 06:54 AM   #18
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I'm with Club Marine also Brian, and cover for the $80k it is now insured for costs me $1300 per year.
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Old 04-10-2016, 06:55 AM   #19
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This is the strange thing. This is a MAJOR marine insurance firm. Apparently this is a new product they are switching many of their their (soon to be former) customers to based on (I assume) age of the vessel.
Any problem with giving a name?

Not yet because of still having them?

Would be nice for the record when you can...please...
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Old 04-10-2016, 07:17 AM   #20
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Any problem with giving a name?

Not yet because of still having them?

Would be nice for the record when you can...please...
Well, I've narrowed it down so much, I might as well. . It's Pantaenius. And they are portraying this as a "select" policy for boats with agreed hull values of less than $250K, which mine is just under. Full loss is covered to the limits of the policy. Partial losses for boats more than 5 years of age are subject to 50% depreciation. ('Younger" boats under this policy have a lower depreciation factor.) The prior policy I had with them did not have these limits. So I don't get the sense they're after me individually, but as a class of boater they might be. I'm sure I'll be walking but I want to talk to a rep to see what's behind this and to ensure I'm not missing something. Will post what I learn.
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