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Old 10-16-2016, 01:52 PM   #1
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Insurance again...

Actual event: boat has an engine room fire. Owner wants to total the boat, insurance company says no, due to the boat bein' over-insured. Cheaper for them to fix the boat than total it. Questions: Did over-insurin' the boat come back to bite the owner in the butt or is it worth over-insurin' ? Can there be repercussions from the insurance company?
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Old 10-16-2016, 03:03 PM   #2
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Seems simple enough to me. Insurance company has the option to do whichever is least expensive for them. That is business the American way!!! Mind you, the owner has the right to ensure the boat is back in original condition before the fire. Perhaps somewhere in between there is room to negotiate for the cash in lieu of boat repair, then owner's option what to do with the boat.
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Old 10-16-2016, 03:29 PM   #3
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Need more info- details on how the vessel is overinsured. Is this an actual cash value policy or agreed value (which I doubt)? Who is the carrier?

Basic- if the policy is Agreed Value, then it's a simple calculation of loss amount vs insured amount. If the fire damage repair estimate is less than the agreed policy value, then the vessel gets repaired unless the insuring company decides to declare it a Total Constructive Loss- the details of how the insured's policy cover this is in the policy language.
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Old 10-16-2016, 03:39 PM   #4
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There are generally points at which if the repairs exceed that percentage then insurers will total the boat. Certainly if there is an agreed value on the policy that is on the high side, this is easy to see happen. As to "overinsured," obviously the insurer didn't feel that way and while it might be more than paid, it might be worth that amount. Regardless, what chrisjs suggested is the other option.

i wouldn't say though it has bitten the owner if it gets repaired completely, he may well have a better boat than he had before the fire with a lot of new parts where he had old parts. What bit the owner was having the fire.
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Old 10-16-2016, 03:41 PM   #5
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Seems to me if the insurance company settles on a cash payment in exchange for repairing the boat they would be able to take possession of the boat.
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Old 10-16-2016, 04:12 PM   #6
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Many owners have no clue what it takes to put a boat back together....or cars or houses for ghat matter.

While the owner wants a new boat.....why should he get one if it can be made as before? Whether it was over insured or not?

Is the guy a type who wants a new boat because a coke exploded in the freezer?
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Old 10-16-2016, 04:28 PM   #7
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Seems to me if the insurance company settles on a cash payment in exchange for repairing the boat they would be able to take possession of the boat.
Not if a cash payment for the cost of repairs. Then the owner keeps the boat. If they total it, the insurer gets the boat.
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Old 10-17-2016, 12:11 AM   #8
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Seems to me if the insurance company settles on a cash payment in exchange for repairing the boat they would be able to take possession of the boat.
Perhaps you intended "in lieu of repairing", if the full value of insurance cover on a total loss basis is paid,insurer takes boat.
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Old 10-17-2016, 10:43 AM   #9
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This comes down to the difference between who is now responsible for disposing of the boat. The description from the PO is brief. It doesn't sound like the argument is the amount being offered but whether the boat is being totaled.

A totaled bought would transfer ownership to the insurance company, who would now be responsible for yard storage and disposal costs as well.

If the owner is happy with the amount the check is written for, then he should move it to lost cost, long term storage and offer the boat for sales 'as is'. Some will buy the boat at hull value. Then the owner can deposit both of the checks and buy what they want, or walk away.
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Old 10-17-2016, 11:03 AM   #10
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Seems to me that there are 2 different issues here. The insurance company will presumably pay to put the boat back in "as good" condition. The owner wants a new boat. Owner should get boat repaired per insurance company and sell the boat in the usual way. Owner's desire for new boat is not insurance company's problem. Otherwise we all end up paying even more for insurance!!!
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Old 10-17-2016, 12:55 PM   #11
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The owner wants a new boat. Owner should get boat repaired per insurance company and sell the boat in the usual way. Owner's desire for new boat is not insurance company's problem.
That is likely what I would do in a similar situation. There is one catch and that is that the value of the boat in the market has been greatly reduced. Now, the owner is saying it wasn't ever what they claimed. Well, now it's a boat repaired after a fire. Although it might be better than it was before the fire, it's worth less.

One other thing from an insurer's standpoint. If the owner is pushing too hard for it to be totaled then I get a bit suspicious and do a little more investigation into the fire and it's cause. I've offered quickly to repair and restore the boat and the owner doesn't want that as the solution, then I wonder if he wanted not to have the boat before.

A lot of boats on the "for sale" market have fires or sink. A disproportionate percentage compared to the general population. If the losses are sizable they get investigated. Now, there's a logical reason for the losses, having nothing to do with anything untoward, and that is simply the owners are not as diligent about maintaining and taking care of and checking on a boat they intend to get rid of.
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Old 10-17-2016, 02:52 PM   #12
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Insurance company takes boat to yard for repairs, returns boat to owner. Insurance company pays yard directly. In effect, the insurance company chose to pay almost what the boat was worth (Blue Book) sendin' a clear message to anyone contemplatin' insurance fraud. Does that sound right?
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Old 10-17-2016, 03:30 PM   #13
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Correction: "Does that sound right?" should have been, "Have I got it right?" Got no dog in this hunt.
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Old 10-17-2016, 03:34 PM   #14
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Insurance company takes boat to yard for repairs, returns boat to owner. Insurance company pays yard directly. In effect, the insurance company chose to pay almost what the boat was worth (Blue Book) sendin' a clear message to anyone contemplatin' insurance fraud. Does that sound right?
That may be a side benefit but not their primary reason. They're doing what is cheapest for them. In the case you set up, you said it was an agreed value policy for more than the boat was worth.

As to the insurer dealing directly with the yard, that's often to the owner's benefit as if the yard finds additional work to be done, the insurer then approves it. Also, insurer responsible for work being done properly as they're still responsible for returning boat to previous condition.
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Old 10-17-2016, 03:59 PM   #15
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I guess I do not see why the boat has been devalued if repaired properly, Plus how much was it worth in the first place??? Might end up looking better than before.
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Old 10-17-2016, 04:38 PM   #16
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I guess I do not see why the boat has been devalued if repaired properly, Plus how much was it worth in the first place??? Might end up looking better than before.
When people know a boat has been severely damaged, they look for a bargain. I agree it might be better than before. I was discussing only in a sale. We have at least one forum member who got a great deal on a boat that had been in an accident. If the owner were to put it up for sale shortly after the repairs, people would just be leary of the boat.

Plus the OP says it wasn't worth as much as it was insured for.
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Old 10-19-2016, 02:17 PM   #17
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Depending on the intensity of the fire I would think that the fiberglass integrity in and around the engine room would be compromised. I'd want to know how the insurance company would address this concern.
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Old 10-20-2016, 10:38 AM   #18
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If owner really wants to total the boat, he should accept the insurance company's valuation which presumably is more than they would intend to pay for the repairs. Over-insuring may help with getting the best realistic valuation, but beyond that it verges on insurance fraud. Lesson is: no point in over-insuring and paying excess premiums for something you will never get!!!
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Old 10-20-2016, 12:17 PM   #19
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I've known of claims on autos where the insurer chose to repair rather than total based on the initial estimates plus time, as rental car figured into the cost. Then there was a huge delay in the work, adding an extra three weeks of rental car which was all at high rate as unplanned. So, the repair ended up costing more than the value of the car, but that just wasn't known going in. So, car was repaired and actually owner was very happy as the owner doesn't think they could have found the same car very easily.

We don't get to choose what we want or wish had happened. If I had a boat 70% destroyed, I'd sure wish it had been 100%. It's like auto theft. Car gets stolen and not found for 48 hours. Do you want it found now? I don't as by now it's either wrecked badly somewhere or work started in a chop shop. I have a friend who has his car found off the road and into a tree. So, first, car was held as part of the investigation, then he had to wait for repairs, then traded it in and got far less than it's pre-theft value.

One thing insurance seldom covers is loss of value.
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Old 10-20-2016, 12:47 PM   #20
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Correct me if I'm wrong: "full disclosure" does not apply to boats.
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