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Old 10-11-2013, 04:42 PM   #1
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Vessel insurance with Allstate -

I've always berated a point about insurance- that the client read their policy so they understand what they are getting into before they bind coverage.

This morning, we received their latest policy; here's a bit of their language regarding Agreed Valuation on a vessel:

Policies with the Premier Plus Option Package (Policy Effective Date: Oct. 5, 2012)
If you have the Premier Plus Option Package, you also have Agreed Value Coverage. If we determine your boat or outboard motor is a total loss, we agree to pay you the respective limit of liability shown on the Policy
Declarations applicable to your boat or outboard motor, reduced by the amount of any salvage if you retain the salvage.

If we determine your boat equipment or boat trailer is a total loss, we will pay, subject to all policy terms and conditions, the smallest of: 1) the actual cash value at the time of the loss, which means there may be a deduction for depreciation; or 2) the respective limit of liability shown on the Policy Declarations applicable to the boat equipment, or boat trailers.

Page 2

Please note that Agreed Value Coverage does not apply to any newly acquired watercraft as defined in the policy. If we determine your newly acquired watercraft is a total loss, we will pay, subject to all policy terms
and conditions, the smallest of: 1) the actual cash value at the time of the loss, which means there may be a deduction for depreciation; or 2) $30,000 for newly acquired watercraft.

As long as you properly pay premiums when due, Agreed Value Coverage will continue for three years from the date it is added to the policy. If, after three years, you wish to maintain Agreed Value Coverage on the
policy, you will be required to obtain an out of water survey of the insured boat by a registered marine surveyor.
The Agreed Value Coverage will be removed from the policy, if you fail to provide us with a then current out of water survey at least 90 days prior to the third anniversary of the date Agreed Value Coverage was added to the policy.
After Agreed Value Coverage is removed, if we determine that there has been a covered loss and the resulting damage to the property described in Property We Cover in Coverage TT Your Property amounts to a total loss, we will pay, subject to all policy terms and conditions, the smallest of:
1) the actual cash value at the time of the loss, which means there may be a deduction for depreciation; 2) the respective limit of liability shown on the Policy Declarations applicable to the boats, outboard motors, boat
equipment, or boat trailers; or 3) $30,000 for newly acquired watercraft.



Translation- you purchase a 2008 37' Riviera ($400K) or a 1995 Marine Trader 35 ($105k) or a 2006 Camano Troll ($100k) and insure it with Allstate. You opt to purchase their Premier Plus Option package, so you have agreed value coverage.

With Allstate, you are required to have the vessel hauled and surveyed every 3 years, or you lose the Agreed Value coverage. It's right there in the policy language.

A Marine policy would not require a survey until the vessel is a least 10 model years old; then, the requirement for a hauled survey is either every 5 years (saltwater usage), 15 years (inland rivers and lakes), OR at the discretion of the insuring company.

Do I represent Allstate? Nope.
Am I mentioning the above to bash on Allstate? Nope.

Am I advocating you read you policy so you know what it covers? You bet your ass I am!
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Old 10-11-2013, 06:43 PM   #2
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Hi Peter
You bring up a great point about reading your policy! Every policy (contract) we enter into needs to be read so we may understand what we are getting into! In the info posted it appears Allstate does not like writing at agreed value and prefers Actual Cash Value at the time of the loss in addition they want you to add the newly acquired vessel at the time acquired. This may vary by state though! By the way how often are our vessels hauled out for servicing it may be more often than every three years than is it a real big deal to get an insurance survey it can't be the same price as a prepurchase survey!
I don't represent Allstate either!
I think it is great that you have brought some light to this!

Gregg Still looking for my boat
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Old 10-12-2013, 12:04 AM   #3
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When my 330 Sundancer got totaled when hit by a drunk boat driver, I was thrust into a prolonged battle with his insurance company....Allstate.

Their drunken insured (and that's how I always referred to him, just to keep reminding him of why the accident happened) was arrested for BUI and pleaded to a lesser crime. That didn't seem to matter, they took the position that somehow I was partially at fault. I was drifting, at night, with all my nav lights on. Their drunken insured was on plane, (25-30mph), no radar on.

It took me awhile but I got into their pockets real deep by the time we were done.

I wouldn't have them insure me on ANYTHING I owned.
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Old 10-12-2013, 08:22 AM   #4
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Allstate, Progressive and other similar auto based insurers all try to avoid insuring some of the unique marine risks.

You are much better off with a marine insurance company with a policy sold by a competent marine insurance broker.

Ask the broker about differences in policy terms. If he is competent he can tell you.

David
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Old 10-12-2013, 10:22 AM   #5
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As of a few years ago Markel was requiring an out of water survey every five years (Great Lakes) for an agreed value policy. They waived the "registered surveyor" when I explained how stupid an accreditation from one of the surveyor lobby groups really is (my NA surveyor refuses to join one on principal...reason enough to hire him). Further, it is bizarre that insurance companies depend in part, on the opinion of a surveyor for establishing value. Given the number of total loss events that I'm aware of in my boating area and the deflated(ing) market value, I'm beginning to wonder if the extra expenses (policy and survey) are worth it.
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Old 10-12-2013, 02:24 PM   #6
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I've never heard of NAMS or SAMS being a lobbying group; they offer a standardized criteria for surveyors to follow. Otherwise, anyone could simply hang a shingle out and declare themselves a surveyor.

Underwriters are, by and large, looking at vessels they are considering as a flat file- information on a sheet of paper. Haveing the NAMS or SAMS affiliation gives underwriting a bit of confidence that the surveyor is clues in to what he/she is doing.
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Old 10-12-2013, 04:53 PM   #7
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I'm not aware of a SMAS/NAMS criteria. They have a standard report format...maybe that's what you mean. The content is often fluff, but it's standardized fluff. Maybe you're thinking of ABYC criteria that some of them try to force on unsuspecting owners. In my experience their membership is so far from being standardized in terms of their actions in the field that it's pathetic. And much of their membership is less experienced than the typical boat owner. They do virtually buy the piece of paper and hang out a shingle. And that's where the lobbying comes in....keeping the insurance industry convinced that the piece of paper is actually worth something. It's smoke and mirrors...and money. The surveyor industry and ABYC have a neat little setup with insurer's ....and the boat owner gets to pay. But then this subject has been covered many, many times on TF...

Regarding agreed value policies, it seems they would be a money maker for insurance companies in the big scheme of things. They're certainly money makers for the surveyor industry. It would be interesting to see the statistics regarding hull loss versus total policy premiums (for the agreed value surcharge).
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Old 10-12-2013, 11:04 PM   #8
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Guys

As a boat owner an agreed value policy is extremely important. With it, you can somewhat insure against a devestating loss on a boat that you've spent a mint refitting. I dont care if it costs a bit extra, the peace of mind is worth every penny.

As far as a survey requirement, I have no problem with that either, as long as the insurance company gives fair warning to allow time to get the survey. In the case that Petes original post pointed out, Allstate does not appear to give warning, and that I do not like.

As far as surveyors, I don't hire idiots, and I'm smart enough to figure out who an idiot is, and not hire him.

As far as AYBC standards, I'm all for them. If my boat does not meet a certain standard I'm happy to fix it. Standards like the AYBC, are a best faith effort at establishing a baseline to make sure our boats are safe, and do not pose a preventable risk of loss. They make an excellent reference guide for persons making repairs or modifications to their boat.

AYBC standards are not just for the novice either. I am an electrical professional, and I refer to the AYBC electrical standards when I have a question about the approved method of accomplishing something.
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Old 10-13-2013, 12:07 AM   #9
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Originally Posted by skidgear View Post
I'm not aware of a SMAS/NAMS criteria. They have a standard report format...maybe that's what you mean. The content is often fluff, but it's standardized fluff. Maybe you're thinking of ABYC criteria that some of them try to force on unsuspecting owners. In my experience their membership is so far from being standardized in terms of their actions in the field that it's pathetic. And much of their membership is less experienced than the typical boat owner. They do virtually buy the piece of paper and hang out a shingle. And that's where the lobbying comes in....keeping the insurance industry convinced that the piece of paper is actually worth something. It's smoke and mirrors...and money. The surveyor industry and ABYC have a neat little setup with insurer's ....and the boat owner gets to pay. But then this subject has been covered many, many times on TF...

Regarding agreed value policies, it seems they would be a money maker for insurance companies in the big scheme of things. They're certainly money makers for the surveyor industry. It would be interesting to see the statistics regarding hull loss versus total policy premiums (for the agreed value surcharge).
I think this subject has been resurrected time and again because it's important- the average layman is relying on the professional surveyor's expertise to aid them in their vessel purchase.

At the same time, the fraternity that believes that surveyors (and perhaps brokers and insurance agents) exist only to collect their money rears it's head to vocally state their position.

Skidgear, I believe in ABYC standards, as well as the NAMS and SAMS programs. You make some declarative statements discrediting the reputations oftheorganizations- I'd like to know where you get your source material from. Wham facts do you have that can be posted here to substantiate your statements? I'm in the business, and I've never heard of any survey organization lobbying insurers.

Please cite your sources.
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Old 10-13-2013, 04:24 PM   #10
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ksanders,

My comments were in regard to insurance surveys, not pre-purchase. Your experience regarding screening out "idiots" mirrors mine. Why do owners have to perform that function? Because SAMS/NAMS aren't doing it and the insurance companies aren't demanding that they do so.

No issue here with ABYC guidelines. They produce guidelines for new builds. When surveyors attempt to use them to force an upgrade to a 1980's design that was deemed safe at time of production I have issues. When ABYC joins with SAMS/NAMS to market their product for old boats, then I have an issue (see below). The insurance companies should be demanding improved standardization and oversite of SAMS/NAMS surveyors because those organizations aren't doing it.

I have an agreed value policy, but wonder if it's worth is or necessary in my boating area. Can't think of a hull loss on Lake Michigan. Marina fire seems the primary risk

Pau Hana,

I had a comprehensive treatise typed before I realized the TF site had apparently timed me out. All lost. But in old posts, I've cited specific unsatisfactory incidents regarding SAMS/NAMS headquarters and their surveyors. I also cited my related interface with the insurer. I fault the insurance industry for not demanding standardization and field oversight of surveyors by the umbrella organizations. Those umbrella organizations primary role is to market the services of thousands of small businesses to insurance companies...they lobby on behalf of their constituency. They sure as heck don't spend a lot of time on workforce standardization and recurrent qualification. Insurance companies have bought a bill of goods. By the way, I recently noted that SAMS/NAMS are joining with ABYC to market safety seminars at marinas. Guess who's paying for that insidious safety creep?

I believe the insurance industry should make a wholesale move to self surveys that are heavily documented with digital photos. Then hire a small but competent internal staff to review the reports and ask specific questions if necessary. The current cowboy situation is expensive, inconsistent and annoying for owners. Like most owners I have nothing to hide and nothing to gain from falsifying a survey.

Anyway, if you want to read where I cite specific incidents, you can do a search on the subject.

Regards
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Old 10-13-2013, 05:08 PM   #11
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Bought our sailboat in '98. Had it surveyed of course. There was always a slight diesel odor but we put if off to having this big diesel engine in the middle of the boat. Never owned a big boat before. Finally realized that the reason the bilge water was pink was because the tanks were leaking. No mention in the survey.

Opened the tanks and lined with fiberglass cloth and West System epoxy. No problems until we sold the boat in '07. Buyer had the same surveyor for the pre-purchase survey. Guess what? Now he determined there was a diesel leak because some of the foam around the tanks was still pink from the previous leaks. No smell, clean bilges, but he wrote it up as leaking tanks.

I'm convinced that he took bribes (such an ugly word) to either help sell the boat like when we bought the boat, or to knock down the price like when we sold the boat. Depending on which side put up the most money.

At the time he was the most highly recommended surveyor in the area.

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Old 10-14-2013, 12:36 AM   #12
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Quote:
Originally Posted by skidgear View Post
ksanders,

My comments were in regard to insurance surveys, not pre-purchase. Your experience regarding screening out "idiots" mirrors mine. Why do owners have to perform that function? Because SAMS/NAMS aren't doing it and the insurance companies aren't demanding that they do so.

No issue here with ABYC guidelines. They produce guidelines for new builds. When surveyors attempt to use them to force an upgrade to a 1980's design that was deemed safe at time of production I have issues. When ABYC joins with SAMS/NAMS to market their product for old boats, then I have an issue (see below). The insurance companies should be demanding improved standardization and oversite of SAMS/NAMS surveyors because those organizations aren't doing it.

I have an agreed value policy, but wonder if it's worth is or necessary in my boating area. Can't think of a hull loss on Lake Michigan. Marina fire seems the primary risk

Pau Hana,

I had a comprehensive treatise typed before I realized the TF site had apparently timed me out. All lost. But in old posts, I've cited specific unsatisfactory incidents regarding SAMS/NAMS headquarters and their surveyors. I also cited my related interface with the insurer. I fault the insurance industry for not demanding standardization and field oversight of surveyors by the umbrella organizations. Those umbrella organizations primary role is to market the services of thousands of small businesses to insurance companies...they lobby on behalf of their constituency. They sure as heck don't spend a lot of time on workforce standardization and recurrent qualification. Insurance companies have bought a bill of goods. By the way, I recently noted that SAMS/NAMS are joining with ABYC to market safety seminars at marinas. Guess who's paying for that insidious safety creep?

I believe the insurance industry should make a wholesale move to self surveys that are heavily documented with digital photos. Then hire a small but competent internal staff to review the reports and ask specific questions if necessary. The current cowboy situation is expensive, inconsistent and annoying for owners. Like most owners I have nothing to hide and nothing to gain from falsifying a survey.

Anyway, if you want to read where I cite specific incidents, you can do a search on the subject.

Regards
Self insuring or an Actual Cash Value policy is always an option, should you feel that the Agreed Value policy is too expensive. Looses can and do happen, and that unknown quantity is exactly the reason insurance occurs.

I respectfully disagree with you statement about having insuring companies allow owners self survey with photo documentation. I'll guess that 90%+ of vessel owners have no clue about what a survey may entail, much less have the skills to perform one.

Moisture intrusion, delamination, wiring issues, corrosion issues, etc., - can Joe Boatowner readily identify problems based on the above? Most likely not. Further, a new owner will let emotional excitement of the purchase override the logical process that a survey requires.

I read surveys for a living- I estimate that I've read well over 5000 in my career. For all the bellyaching that is on the internet about problems with surveyors, I've seen very few in my business, or heard of many from my competitors. Also, marine insurance companies keep good records on surveyors that have a track record of bad surveys: bad surveys and surveyors can cost the insuring company money. Imagine how quickly the cost of insurance would go up if your suggestion were implemented. Insurers would demand that reserves be increased to offset potential claims and losses due to non-professionals surveying their own vessels. That means costs go up for everyone.

I can think of only 2 names that have made insurers cringe in 10 years of being in the business. Both are retired.

Your reluctance to provide sources for your statements tells me that the statements are more subjective opinion that objective fact.
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Old 10-14-2013, 02:26 PM   #13
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....about what I'd expect from someone in the industry with a vested interest and a comfort level with the status quo.

I'm not suggesting that there's no need for insurer's, brokers or even surveyors (particularly for pre-purchase). I've had four insurance surveys done on our boat since purchase. Aside from personal design change/upgrade druthers from surveyors, the most significant item ever noted was a few blisters (from the very first survey). I pointed them out to the surveyor and they were repaired along with a barrier coat immediately after the survey (as planned). The next three surveys found no issues with the bottom. In terms of maintenance sorts of issues they listed two bilge pump hose clamps with small spots of rust, no rubber covers over the starter terminals...which are high on the back of the engine, one missing fire extinguisher location label, and a 3/4 inch air bubble in the wet compass on the flybridge. Those four insurance surveys have cost me roughly $2800 and plenty of aggravation on the phone with the insurance company. The surveyor's personal druthers items were discounted when I spoke with a staff tech specialist....who by the way understood and concurred with my concern with field surveyors imposing their personal "likes" on boat owners.

Now, the insurance company has a stack of reports that show the boat is obviously very sound and obviously well maintained, they know it's in fresh water for at most three and a half months per year, they know it's in a heated storage building the rest of the time. You say they need to send in another surveyor (at my expense) to look for hose clamps and bubbles...and to tell me why my 1989 boat doesn't meet the latest iteration of ABYC. Sorry, there has to be a better way.
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Old 10-14-2013, 08:26 PM   #14
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You say they need to send in another surveyor (at my expense) to look for hose clamps and bubbles...and to tell me why my 1989 boat doesn't meet the latest iteration of ABYC. Sorry, there has to be a better way.
There is a better way, its called self insurance. If you believe that you do not want to comply with the requirements imposed by the insurance company, accept the risk yourself and drop the coverage. Post a bond for the potential liability and insure yourself against loss.

I like the relatively low rates I pay for insurance. Those rates are low because in the shared risk pool, which is really in a big picture sense what insurance is, your boat and everybody elses boat has to meet certain standards proven over time to lower that risk.

So, if you do not want to pay a third party to verify that your boat meets those standards, accept your own risk. As part of the risk pool I do not want to accept your self verified risk assessment. I want an unbiased third party involved.
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Old 10-14-2013, 08:40 PM   #15
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There is a better way, its called self insurance. If you believe that you do not want to comply with the requirements imposed by the insurance company, accept the risk yourself and drop the coverage. Post a bond for the potential liability and insure yourself against loss....
Things may work differently your side of the Pacific. Accepting the risk of the value of your own boat is one thing, self insuring the public liability risk associated with your boat is another thing entirely, and not something I would countenance.
My 3rd party cover is 10 million, that`s standard, I`m glad to have it.
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Old 10-14-2013, 09:59 PM   #16
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There is a better way, its called self insurance. If you believe that you do not want to comply with the requirements imposed by the insurance company, accept the risk yourself and drop the coverage. Post a bond for the potential liability and insure yourself against loss.

I like the relatively low rates I pay for insurance. Those rates are low because in the shared risk pool, which is really in a big picture sense what insurance is, your boat and everybody elses boat has to meet certain standards proven over time to lower that risk.

So, if you do not want to pay a third party to verify that your boat meets those standards, accept your own risk. As part of the risk pool I do not want to accept your self verified risk assessment. I want an unbiased third party involved.
I would agree if more surveyors were worth the expense...especially for something simple like an insurance survey....

What is required by both the insurance industry and done by the surveyors has very little to do with what boat may be at risk or not.

A good friend of mine a few years ago (USCG related) suggested I get into the business...I had other notions at the time...wish I had now. What he told me was expected was a real eye opener to the "inside" of the business...so I tend to agree somewhat with Skidgear ...the whole process while not necessarily a full blown conspiracy scam...it's just flawed beyond belief in my eyes too.
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Old 10-14-2013, 10:49 PM   #17
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....about what I'd expect from someone in the industry with a vested interest and a comfort level with the status quo.

I'm not suggesting that there's no need for insurer's, brokers or even surveyors (particularly for pre-purchase). I've had four insurance surveys done on our boat since purchase. Aside from personal design change/upgrade druthers from surveyors, the most significant item ever noted was a few blisters (from the very first survey). I pointed them out to the surveyor and they were repaired along with a barrier coat immediately after the survey (as planned). The next three surveys found no issues with the bottom. In terms of maintenance sorts of issues they listed two bilge pump hose clamps with small spots of rust, no rubber covers over the starter terminals...which are high on the back of the engine, one missing fire extinguisher location label, and a 3/4 inch air bubble in the wet compass on the flybridge. Those four insurance surveys have cost me roughly $2800 and plenty of aggravation on the phone with the insurance company. The surveyor's personal druthers items were discounted when I spoke with a staff tech specialist....who by the way understood and concurred with my concern with field surveyors imposing their personal "likes" on boat owners.

Now, the insurance company has a stack of reports that show the boat is obviously very sound and obviously well maintained, they know it's in fresh water for at most three and a half months per year, they know it's in a heated storage building the rest of the time. You say they need to send in another surveyor (at my expense) to look for hose clamps and bubbles...and to tell me why my 1989 boat doesn't meet the latest iteration of ABYC. Sorry, there has to be a better way.
I don't know any specifics about your coverage, so I can't say if you need a survey now. After reading this thread over again, I come away with this- you are of the opinion that you know best. You want to hear assent so you have validation for your opinion. I have news for you- you (and me, and the hundreds of thousands of boaters nationwide) are just a file to an insurance company. The insurance companies have built statistical risk tables based on losses, not on what you believe to be true.

Boating is an elective pastime for most. There are risks involved, and insurance was written to mitigate the risks- as far back as 1688 to cover commercial risks. Costs were relatively low, and remain so to this day. It's common to insure a vessel for several million dollars for only a few thousand dollars- a fraction of the value. Further, total loss will result in a payment to the assured of the insured value of the vessel- and partial losses are, by and large, also covered. Insuring companies rely in the expertise of professionals versed in ascertaining the material condition of a vessel to underwrite a risk.

No matter how much you'd like to it happen, it's not realistic to think that insuring companies will ever allow a blanket policy of self surveys being allowed as evidence of a vessel's material condition. Hell, most people cannot even change their oil in their daily driver, or change a spare tire.

This is my profession, and of course I have a vested interest- but not for the apparently twisted reasons you present. Nor do you know that I have been on boards that have helped change polices as the boating industry has changed. Status quo is not in my blood.

And, for the record, a conversation with your agent (conversation, not demand) about your survey concerns could very well mitigate the requirement. I have had this very type of conversation on many occasions, and those talks have led to a survey requirement being negated.

Give underwriting a reason to agree with you, and they just might. Be pigheaded, and the will not.

Or, as Kevin suggests, exercise the option of self insuring, and rid yourself forever of the headache of surveys, insurance, etc.




Quote:
Originally Posted by ksanders View Post
There is a better way, its called self insurance. If you believe that you do not want to comply with the requirements imposed by the insurance company, accept the risk yourself and drop the coverage. Post a bond for the potential liability and insure yourself against loss.

I like the relatively low rates I pay for insurance. Those rates are low because in the shared risk pool, which is really in a big picture sense what insurance is, your boat and everybody elses boat has to meet certain standards proven over time to lower that risk.

So, if you do not want to pay a third party to verify that your boat meets those standards, accept your own risk. As part of the risk pool I do not want to accept your self verified risk assessment. I want an unbiased third party involved.
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Old 10-15-2013, 09:17 PM   #18
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There is a better way, its called self insurance. If you believe that you do not want to comply with the requirements imposed by the insurance company, accept the risk yourself and drop the coverage. Post a bond for the potential liability and insure yourself against loss.

I like the relatively low rates I pay for insurance. Those rates are low because in the shared risk pool, which is really in a big picture sense what insurance is, your boat and everybody elses boat has to meet certain standards proven over time to lower that risk.

So, if you do not want to pay a third party to verify that your boat meets those standards, accept your own risk. As part of the risk pool I do not want to accept your self verified risk assessment. I want an unbiased third party involved.
When I said there has to be a better way, I was referring to the process that currently exists for establishing the material condition of the boat for an agreed value policy. psneeld got my point.

If I elect to keep an agreed value policy, I don't want to throw money away on useless activity, and even worse be coerced by surveyors armed with an ABYC handbook to upgrade items on my boat that are plenty safe as is. Part of the problem, of course, is that "safe" is a relative term and it's easy to abuse.

I have a fair amount of experience with design/safety standards for civil aircraft. By law, airplanes built in 1945 (for example) pass through their entire service life under the design standards that were in place in 1945. Why? Because the cost of keeping up with ever evolving design standards is prohibitive for owners. Another related aside associated with self inspection...I just checked with Haggerty classic car insurance for a policy on my old E-type Jaguar, which is nearing the end of a comprehensive restoration. They'll issue a $150K (or much higher) policy based on a good set of photos. Eyes-on initial inspection? Nope. Recurring surveys? Nope. Photographs.

You mention "standards" that the insurance industry uses to reduce risk. I know of no specific "standard" unless you are speaking of ABYC guidelines (in my personal experience a "standard" is a government mandated regulation).

From what I can determine SAMS/NAMS "sold" the insurance industry on their program in large part by offering a standard report format and telling the insurance companies that they would use this handy dandy ABYC criteria as a standardization tool among their membership. Sounds good on the surface. The insurance companies said great, it will give us a better report product. But no one stipulated exactly how the criteria should be used or the limits of its use. Without such guidelines, individual surveyors (especially the enforcer/cop types) use it in survey reports to plug their individual pet safety improvements. Makes 'em feel smart and in charge...and look good with the reviewer at the insurance company. The insurance companies certainly like newer systems and designs, and they are only too happy to have boat owners pay for them. Unfortunately, arbitrary application of ABYC by individual surveyors is chaotic, non-standard, costly and unfair to owners who think they have some obligation to upgrade their boat. Of course the boat yards like it because they often get the modification business. I fired a surveyor who I discovered was in cahoots with the local yard. Psneeld declined to use the word conspiracy scam and so will I, but I have to agree with him that the process is flawed beyond belief. I have yet to understand how design upgrade recommendations on an old boat fit within a material condition inspection.

By the way, some insurance companies allow self survey for some boats, so the "risk pool" is already tainted.
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Old 10-16-2013, 12:57 AM   #19
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Quote:
Originally Posted by skidgear View Post
When I said there has to be a better way, I was referring to the process that currently exists for establishing the material condition of the boat for an agreed value policy. psneeld got my point.

If I elect to keep an agreed value policy, I don't want to throw money away on useless activity, and even worse be coerced by surveyors armed with an ABYC handbook to upgrade items on my boat that are plenty safe as is. Part of the problem, of course, is that "safe" is a relative term and it's easy to abuse.

I have a fair amount of experience with design/safety standards for civil aircraft. By law, airplanes built in 1945 (for example) pass through their entire service life under the design standards that were in place in 1945. Why? Because the cost of keeping up with ever evolving design standards is prohibitive for owners.
And the same is true for boats/yachts. ABYC evolves in accordance with the onward march or technology...and older boats are not required to comply with current ABYC standards, only standards that were in place at the time of build. No insuring company is going to require that a 1989 vessel be in absolute compliance with 2013 ABYC standards. That would be as ridiculous as requiring a 1960 Beechcraft Baron to meet current Part 23 standards, because the Beechcraft is certified under CAR Part 3 standards (the airworthiness standard in force at the time the Beechcraft was manufactured).

Quote:
Another related aside associated with self inspection...I just checked with Haggerty classic car insurance for a policy on my old E-type Jaguar, which is nearing the end of a comprehensive restoration. They'll issue a $150K (or much higher) policy based on a good set of photos. Eyes-on initial inspection? Nope. Recurring surveys? Nope. Photographs.
AND- if you have a loss, Hagerty may ask for substantiation for that high agreed value- receipts, photo documentation of the restoration, and perhaps even a survey. Yes, survey. Most classic car owners have a survey performed post restoration to document the restoration and valuation. I've insured personal classic cars with Hagerty, and currently represent them as a classic vessel insurer.

Quote:
You mention "standards" that the insurance industry uses to reduce risk. I know of no specific "standard" unless you are speaking of ABYC guidelines (in my personal experience a "standard" is a government mandated regulation).
Statistical averages are used to determine risk. That data, as well as loss ratios, are what determine risks that an insuring company is willing to take on, and the rates for said risk.

Quote:
From what I can determine SAMS/NAMS "sold" the insurance industry on their program in large part by offering a standard report format and telling the insurance companies that they would use this handy dandy ABYC criteria as a standardization tool among their membership. Sounds good on the surface. The insurance companies said great, it will give us a better report product. But no one stipulated exactly how the criteria should be used or the limits of its use. Without such guidelines, individual surveyors (especially the enforcer/cop types) use it in survey reports to plug their individual pet safety improvements. Makes 'em feel smart and in charge...and look good with the reviewer at the insurance company. The insurance companies certainly like newer systems and designs, and they are only too happy to have boat owners pay for them. Unfortunately, arbitrary application of ABYC by individual surveyors is chaotic, non-standard, costly and unfair to owners who think they have some obligation to upgrade their boat. Of course the boat yards like it because they often get the modification business. I fired a surveyor who I discovered was in cahoots with the local yard. Psneeld declined to use the word conspiracy scam and so will I, but I have to agree with him that the process is flawed beyond belief. I have yet to understand how design upgrade recommendations on an old boat fit within a material condition inspection.
You're reaching with the above statements. There is no vast conspiracy, no smoking gun, no NAMS/SAMS lobby courting vessel insurers.

Quote:
By the way, some insurance companies allow self survey for some boats, so the "risk pool" is already tainted.
The companies (offering yacht policies) I know of that allow self surveys may offer that option only to current clients that have had no losses. This does not taint the pool, but instead helps insurers retain clients.
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Old 10-16-2013, 12:17 PM   #20
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[QUOTE=Pau Hana;184876] [And the same is true for boats/yachts. ABYC evolves in accordance with the onward march or technology...and older boats are not required to comply with current ABYC standards, only standards that were in place at the time of build. No insuring company is going to require that a 1989 vessel be in absolute compliance with 2013 ABYC standards. That would be as ridiculous as requiring a 1960 Beechcraft Baron to meet current Part 23 standards, because the Beechcraft is certified under CAR Part 3 standards (the airworthiness standard in force at the time the Beechcraft was manufactured).]

Your understanding of the process for aircraft is correct. Now, perhaps you could explain why surveyors include recommendations to upgrade exisiting systems in a material condition survey report? Why do they tell me that insuruance companies are looking for these upgrade recommendations? Why don't insurers tell their agents to advise surveyors to end the practice? Why don't the insurers tell their partners at SAMS/NAMS to get their surveyors standardized in this regard?

[ Pau Hana ] [AND- if you have a loss, Hagerty may ask for substantiation for that high agreed value- receipts, photo documentation of the restoration, and perhaps even a survey. Yes, survey. Most classic car owners have a survey performed post restoration to document the restoration and valuation. I've insured personal classic cars with Hagerty, and currently represent them as a classic vessel insurer.]

So what. The discussion is about the expensive and cumbersome up front pushups involved with getting a boat policy. I'd be quite pleased if I could eliminate the interim surveys with some detailed documentation and a pile of photos. And I guess I'd be surprised if an insurer didn't come snooping around following a total loss incident. Hagerty does not require a pre-insurance survey.

[Pau Hana] [You're reaching with the above statements. There is no vast conspiracy, no smoking gun, no NAMS/SAMS lobby courting vessel insurers.]

There's that clever tactic again. I specifically said I don't believe there was or is a "vast conspiracy". But the process, if abused, does benefit a wide range of players at the expense of the boat owner. The quoted material in your first post has the term "registered marine surveyor". The fact is that SAMS/NAMS and their brethren alphabet groups have a partnership with the insurance industry. The fact is that surveyors recommend system upgrades on old boats and they use ABYC to back up their "safety" concern. The fact is that the USCG accident and incident data do not support these recommendations in the first place. The fact is that short interval recurrent surveys on my boat yield squat for material findings. The fact is that "professional" (your word) surveyors endorsed by the insurance industry have to be screened carefully to weed out the "idiots" (per ksanders...and many others including me). The fact is that boat yards, aftermarket equipment manufacturers and insurance companies are beneficiaries of system upgrades. The fact is that SAM/NAMS and ABYC are jointly marketing "safety" at marinas. The fact is that boat owners pay for all of it. On the one hand pleasure boaters are blessed that the USCG is not overly involved in their business. On the other hand government oversight of the safety process provides standardization and limits on what is required. When the profit motive begins driving the safety/insurance process beyond what is required by regulation, people become annoyed. That leads to intervention by outside entities. The insurance industry needs to clean up what is at a minimum an unseemly situation.

[Pau Hana] [The companies (offering yacht policies) I know of that allow self surveys may offer that option only to current clients that have had no losses. This does not taint the pool, but instead helps insurers retain clients.]

ksanders said he wants a third party inspection in order to keep the pool clean (never mind the fact that surveyors are agents of the company for an insurance survey). Entitling current clients who have had no losses to conduct a self-survey sounds like a good plan. Pretty much what I had in mind. By the way, my company has been using a demographic instrument to identify trustworthy customers for several years.

Regarding a comment in an earlier post, I have no interest in begging an agent to get my survey period extended or eliminated. I want the process changed, preferably at the industry level so that every customer has access to the same deal. I don't have an agent in the first place.

As for my knowing what's best....I know and understand what I have experienced, and I don't like it. I understand the process, which is irritating, expensive and cumbersome. I understand that surveyors are making inappropriate recommendations in their reports and I understand that at least one surveyor was caught discussing a potential system upgrade recommendation with the yard who recommended him. I don't understand why insurers condone the practice of adding recommendations that are unrelated to material condition. I understand that you are defending the current process.
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