Routine Maintenance or Added Value?

To make this easy to understand, lets say you own a 1998 Fort Pinto. You rebuild the engine and transmission, reupholster the interior, have all the dents removed and have it repainted, all the chrome redone, and install a killer stereo system. The next day, it's stolen.

The insurance company will pay you the book value of a 1998 Ford Pinto.

When I first bought my (previously owned) boat, the insurance company asked me how much I wanted to insure it for. I insured it for what I paid for it plus $5K for electronics I was planning on installing.

Once the boat was over ten years old, they contacted me and told me it could no longer be insured for an "agreed value", it would only be insured for "actual value". They didn't say, but I'm assuming that's what other boats like mine are selling for at the time.

The $5K of electronics, electric windlass, AGM batteries, inverter, new teak and holly cabin floor, etc. won't change things.

How's this for a twist to the above tale. Several years ago my insurance co asked me to get a survey so they could establish the current market value, because of its age. They even recommended a surveyor, so as the one I used when I bought her was not available, I went with him. he did a thorough inspection, including a lift out of the water, (at my cost of course), and took a lot of photos etc. He submitted a good detailed report. The trouble was, when I asked him why he had not put a market value on her, which was the main point of the exercise, he said, "Im a surveyor, not a broker, I don't do valuations."
I fear the magic 5 yr interval is about up again, and I'm wondering how I am going to remain 'polite' when they ask for the 'valuation survey' again.

Here's 2 companies definition of "what they pay/cover"

For Agreed Hull Value Policies (Yacht Policy, Angler’s Best and Angler’s Bass Boat Program), we will pay you the Agreed Hull Value in the event of a total loss. Repairs for Partial Loss on boating equipment are covered on a "new for old" basis, although specific items are subject to depreciation.
The insurance policies offered by American Marine Insurance are almost always AGREED VALUE policies. Agreed Value policies pay the full insured value shown on the policy declarations page in the event of a total loss. Agreed Value policies do not depreciate hull value so you always know what you will be paid.
My understanding is that they will insure your boat for whatever they, you and some sort or appraisal/survey agrees upon (agreed value). I'm pretty sure that after the "safety/insurance survey" to cover their butt so the boat doesn't sink/catch fire right away...the only reason they want that "appaisal/survey" is so they aren't pulled into your "fraud" if you try and insure a boat for way more than it's worth.

But for most of us...they'll insure the boat for almost anything we ask for within reason...but they want some kind of "protection" if we drastically change the policy from their last coverage...especially so they know how to competitively charge for the premium change to cover the insured.

The isurance really isn't based upon the price of other boats because the prices (selling, asking, blue book) are all over the map. They wait for the surveyors "estimated market value" and go from there. If you wanna change...they want that 3rd party confirmation of "agreed value".

Peter B said:

How's this for a twist to the above tale. Several years ago my insurance co asked me to get a survey so they could establish the current market value, because of its age. They even recommended a surveyor, so as the one I used when I bought her was not available, I went with him. he did a thorough inspection, including a lift out of the water, (at my cost of course), and took a lot of photos etc. He submitted a good detailed report. The trouble was, when I asked him why he had not put a market value on her, which was the main point of the exercise, he said, "Im a surveyor, not a broker, I don't do valuations."
I fear the magic 5 yr interval is about up again, and I'm wondering how I am going to remain 'polite' when they ask for the 'valuation survey' again.

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I've heard the same a few times...not all surveyors will do a valuation survey but that's pretty rare in my experience...

Next time you need to do one...make sure that they advertise that they will do a valuation for your insurance.

Yes, I guess as it was the insurance company wanting the 'valuation' who recommended the guy, that they had used him before, and that he therefore did valuations. More fool me.

I've heard the same a few times...not all surveyors will do a valuation survey but that's pretty rare in my experience...

Next time you need to do one...make sure that they advertise that they will do a valuation for your insurance.

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Aren't all surveys done to evaluate the condition of the vessel and it's market value? Over the last 26 years we have had 9 surveys on 4 different boats. Some for purchase and some required every 2-3 years by the insurance company (s). In every case, the surveyor did a valuation or market value for the vessel (s). This is what the the insurance company used to set the premiums and assign a value for the vessel in case of loss. Also, if you are taking a loan for the purchase of a vessel, isn't the surveys market value the bases for the loan?

http://www.promarinesurveys.com/SurveyTypes.htm

Pre-Purchase – Condition and Value
This is the most comprehensive type of inspection and is strongly advised before agreeing to purchase any used vessel. Many Insurance companies will normally not provide Boat Insurance for used boats without a current marine survey. Many clients also request a Pre-Purchase Condition & Value survey when they want to sell their boat so they can find and correct any known problems before listing the vessel for sale. The condition and overall operation of the entire vessel is thoroughly inspected including such items as structural integrity including the bottom and underwater machinery (if hauled), the superstructure, electrical systems, propulsion and fuel systems, steering, navigation and miscellaneous on-board systems like generators and air conditioning units, electronics, safety gear and interior portions accessed in a non-destructive manner. Moisture and/or delamination checks are made on the vessels hull, top deck and stringers.
The final report will reference compliance with United States Code of Federal Regulations, US Coast Guard, American Boat and Yacht Council and National Fire Protection Association standards. All recommendations are clearly defined. Fair market value, replacement cost and general remarks regarding the overall condition of the vessel are always included.
NOTE: It should be noted that it is highly recommended that the vessel be hauled out for complete bottom and underwater machinery inspection. The haul out yard charges are separate and not a part of the survey fees.

Insurance - Condition and Value
The Insurance Condition & Value survey is for current owners who have changed Insurance Companies or have been requested by their Insurance Co to obtain a current Marine Survey. This inspection is necessary for the insurance company to determine whether or not the vessel is an acceptable risk. They are interested in parts of the vessel related to structural integrity, safety and suitability for its intended use. High-risk systems related to fuel, ventilation, exhaust, and steering are some examples of inspected areas. Electronics are noted with serial no's if available but are not tested for insurance surveys. A sea trial normally is not required and the report is very similar to the pre-purchase condition and value survey. Most insurance companies require a survey on older boats and will also want to know the vessels fair market value and replacement cost.
You should check with your insurance company as many insurance companies will request a haul out to have the bottom and underwater machinery inspected. The haul out yard charges are separate and not a part of the survey fees.
This type of survey should not be misconstrued as being a more detailed buyer’s pre-purchase condition survey and is not intended to be assumed as such.

Yacht Appraisal Inspection
An appraisal is an inspection to gather enough information to justify or determine the fair market value of the vessel. This is normally needed for financing, estate settlements, donations and legal cases. The equipment on board, general maintenance, overall condition, same vessel selling prices and the current economy are all considered when determining the fair market value.

Damage Survey
A damage inspection is performed for an Insurance Company to assess the extent of damage to the vessel, recommend repairs, assess estimated repair costs and if requested, the probable cause.

......."Im a surveyor, not a broker, I don't do valuations."

I'm sure that is quite rare and frankly, I wouldn't hire someone like that. Sounds like he has an ego problem. All they have to do is the blue book thing or get the info from Yachtworld.com. My wild guess is that 95% of all survey's performed are required for "Pre-Purchase" insurance valuations, bank loans. or both in addition to the on-going every 5 year thing for insurance companies. Most of us buy a boat and want a survey performed so we know if there are any problems and what to expect but we usually also need the survey for insurance purposes which must have a valuation assigned to it.
A good surveyor will usually spend about 4 - 6 hours or more on the "in-the-water" part of the survey. Then comes the 'sea trial' and the haulout. With all of this, he can't spend 5 to 10 more minutes on a 'valuation'?

My surveyor put a value on my boat. So did a different surveyor for a friend's boat.

As I said above, the real monetary value is what a buyer is willing to pay for your boat, not what a surveyor or broker says it is worth. My broker told me my previous boat was worth $30K and listed it for that. Over a year later, it sold for $11.5K. That's what it was worth.

BTW: My insurance company never asked for a survey.

1998 Fort Pinto

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Pinto! ....and here I was thinking vintage Land Rover.

I'm currently insured for 'agreed value' of $35,000. Anybody want to buy Scout for that?

rwidman said:

My surveyor put a value on my boat. So did a different surveyor for a friend's boat.

As I said above, the real monetary value is what a buyer is willing to pay for your boat, not what a surveyor or broker says it is worth. My broker told me my previous boat was worth $30K and listed it for that. Over a year later, it sold for $11.5K. That's what it was worth.

BTW: My insurance company never asked for a survey.

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The thread was started about ..."I just got off the phone with an insurance adjuster with Boat US. "

So it IS important to know the 3 values of your boat...what it could sell for, what you can insure it for and what it is worth to you.

Often when the "what it would sell for" starts to greatly increase over "what it's worth to you"....well we all know what happens then!!!

The irony in all this is just a few months ago when Scout was gutted and scattered between two shops and the boat house I would have had to pay someone to haul her away. If only the insurance company could have seen her then.

This reminds me of when I bought my current boat.
I was loking a certain models in my size and price range. I came across a really well maintained sailboat. It was about 30 years old at the time. The owner was an old guy, about 75 at the time and wanted to seel his boat and move up to Minnisota (or someplace like that) to be with friends and family. Anyway, the boat was in like new condition. All of the book values and the value I got from the broker put that age boat in the range of 35 to $45,000. he wanted $58K and the broker told me he wasn't going to budge an inch. Anyway, I made a written offer of $46K with $15K down so he would know I was serious. In the offer, i made a note quoting the various sources of valuation and my offer was a little higher than the top value.
As expected, he was insulted by my offer.
Bottom line.......he is now 80 years old and still owns the boat. Never did move and the boat is for still sale, but this time "For sale by owner".

As much as people think they would pay a lot more for a boat because of condition, when confronted with a situation like living in hurricane territory, and insuring your boat for much less than you paid, makes you think a little harder. BTW, he didnt have central heat and air, just a window unit.

Wrapped up some more of the routine maintenance this week.

The autopilot install is complete as is the rudder rebuild/reassembly. I bought the Simrad AP22 as a working take-out from a reputable dealer. The RPU 160 pump is new. No problems plumbing it up to the existing Wagner 700 series hydraulic steering system. I did have to run a copper tube from the autopilot pump back to the helm station for a common resevoir. Bleeding the system out was not fun but done. Works great! Responds perfectly to flux-gate compass and rudder indicator. Going to get the boat in the water and run it for awhile before coupling to the 740S Garmin.
The new MS-3000 Xantrex pure sine wave inverter is in, wired and working as it should. I've had it new in the box for a few years. I know friends don't let friends buy Xantrex but I couldn't pass up the deal I got on it at the time.
Both systems are new to Scout.

Looks good, Chip. Can't imagine my Coot without "crewmember" Otto. He allows me to be a better lookout.

Anode

I'm impressed with your work and pictures. What are the pros and cons of having your AP controlled by the chart plotter vs maintaining a heading? I assume you'll be set up to do either?

sunchaser said:

Anode

I'm impressed with your work and pictures. What are the pros and cons of having your AP controlled by the chart plotter vs maintaining a heading? I assume you'll be set up to do either?

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go to waypoint keeps you on track while hold heading doesn't correct for set and drift

Greetings,
FF has mentioned numerous time that "paint sells da boat" and I agree but I'm thinking of painting "da boat". Not for resale but because I'm tired of looking at crazed, chipped, oxidized and faded coatings and they're getting me down. Now the conundrum of the original question...Routine maintenance or added value.
I know in the housing market that certain "upgrades" (refurbished kitchens and bathrooms) add to resale value and other items do not (pool for example). So do I do nothing and live with the status quo or re-paint? Hmmmmm...

RT Firefly said:

Greetings,
FF has mentioned numerous time that "paint sells da boat" and I agree but I'm thinking of painting "da boat". Not for resale but because I'm tired of looking at crazed, chipped, oxidized and faded coatings and they're getting me down. Now the conundrum of the original question...Routine maintenance or added value.
I know in the housing market that certain "upgrades" (refurbished kitchens and bathrooms) add to resale value and other items do not (pool for example). So do I do nothing and live with the status quo or re-paint? Hmmmmm...

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Just my opinion as I think when selling/buying houses people are COMPLETE idiots!!! (I just short sold 4 of them)

Paint will help the boat sell more quickly if it LOOKS GOOD!!!! That's gonna be in the eye of the beholder obviously..

I think a amatuer paint job will help the boat sell...but you won't see much money out of it.

A pro job with reciepts....may get a few more dollars at sale.

All that said...I think that you have to see where your boat falls into the big scheme of things. A newer boat always benifits from nicely done repairs/upgrades.

An older boat (meaning it's all some of us can afford) and getting into it means keeping the purchase dollars down while we expect to pay the ongoing rebuild/upgrade dollars after we get into her. So a lot of presale fixes/upgrades are nice but the bottom line is still the bottom line.

Originally Posted by sunchaser
Anode
I'm impressed with your work and pictures. What are the pros and cons of having your AP controlled by the chart plotter vs maintaining a heading? I assume you'll be set up to do either?

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Thanks sunchaser. psneed answered part of your question.
Pros and cons? If you let the plotter and waypoint control the autopilot you don't have to monitor and manually set the heading to correct set and drift as psneed said. The downside is you can get too complacent about your position and surroundings and you run into things. You've heard the story about the guys who set their waypoints on top of the marker and then run into it.
Most of the boats (old) that I get on don't have the AP couple to the chart plotter and I'm used to monitoring and adjusting. Offshore at 6-8 knots you typically only have to do this every few hours. In congested areas like the ICW I never set waypoints but like the AP on a heading. That way I can sit back with a cup of coffee and observe what's going on around me.
Yes I plan to couple my AP to the plotter but, because it's a new install, I want to make sure it functions properly on it's own before doing it. This way it's easier to trouble shoot as it eliminates one variable.
I love autopilots. I wouldn't own a boat without one. It was one of the first things I purchased (and the last to be installed) for Scout when we started the refit. Value added? It's worth a lot to me.

I hardly ever run our AP in "follow the course" mode. Dodging buoys, logs, crab pots, other traffic and inclimate weather in the PNW requires a careful watch. I just don't think the helmsman is as vigilant with a course setting vs manually adjusting the AP wheel to stay on course.

Last year a very nice vessel we know struck a marked underwater rock - the boat was on AP course setting, nobody was following the plotter or charts and the owner had not noted the line went over an isolated rock as he laid out his course. I've heard all to often of striking things while in AP course mode, best to use all ability to avoid sinking or fouling a prop.

I wonder it the Aegean was mistakingly on an AP course for Coronado Is? I'd read it was under power at the time due to light winds. For sure the helmsman was "asleep."

When I go on watch in an unfamiliar place I will zoom in on the plotter for as much detail as possible and 'walk through' my intended course for the watch. That way I can pick up on potential hazards before the boat finds them. A good habit to get into.
While the AP steers the boat I can concentrate on visual lookout, radar targets and direction of travel, paper charts, etc. There's more to operating a boat than just steering and the AP can steer a lot better than I can.

When our AP is in heading mode we frequently make course corrections to avoid moving or still targets that may be as much as 2 miles in front of us. When nothing in front (a rarity) we make a course correction in heading mode probably no more than every 5 minutes. Our PC - Nobeltec (better than our Furuno NN3 or Raymarine plotters for information feedback ) is perfect for telling the helmsman what direction to adjust the AP to follow the pre-planned course while avoiding ferries, tow barges, log booms, ships, pots, fishing vessels, buoys, logs, small boats and whales. In rain and fog, radar and AIS kick in with their information for making AP heading adjustments.

With tens of thousands of water miles, I find AP in course mode great but not necessary for blue water and AP in heading mode best for coastal. Just my pre-Ipad training I guess.

AP is just a tool...either in auto or follow...ya gotta be smater than it is...both features are there for a reason.....just use the appropriate one

I use both a lot...even in similar situations...just depending on traffic/obstacles.

Hitting a charted rock might happen either way...missing it or driftink track over it...there's advantages both way if you know when and where to use them.

psneeld said:

go to waypoint keeps you on track while hold heading doesn't correct for set and drift

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it is SUCH a huge difference. Gotta pay attention either way though!

Phil Fill said:

There is NOT much that can add value to a older sued boat. Might help sell the boat and maybe get a better price but as for survey/appraised value very little as true value. I just had a survey/appraisal done on the Eagle with 5 small recommendations: Flares expired, batteries has wing nuts instead had SS hex nuts, one rail was loose, and one of 6 bilge pumps did not work, and I had not repaint Seattle the home port on the stern. I mean he really had to stretch. Any the end result it did not increase the value over all of the Eagle that much, actually I thought it was a little low for like size age of boats.

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Please don't take it wrong...but either he stretched to fill paper..or you have one of the most perfect usedboats out there...

I have very little faith in the survey process...not necessarily surveyors as the are limited to what they really can and have to do.

Used boats are selling typically for 60-80 percent of their blue book value based on a surveyor friend of mine and my own recent experiences.

So we are all correct in saying very little is helping used boat prices due to the number out there. There are some makes, models and REALLY GOOD, CLEAN boats out there getting the big dollars but they are less than 1 or 2 in a hundred.

Pineapple Girl said:

it is SUCH a huge difference.

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can be...get out much? ...especially the slower you go..

psneeld said:

can be...get out much? ...especially the slower you go..

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on an multi hour trip it is nice to "go to waypoint" versus "go to heading". either way, someone has to pay attention! We use the AP when we are in the SF Bay--though we do not currently have it hooked up to the GPS so we have to correct the course "fairly" frequently to stay on track and stay clear of pesky channel markers and anchored frieghters. We usually switch to stand by when dodging moving vessels (ferries and whatnot). Luckily we don't have crab pots or much in the way of logs to dodge, though in winter there may be the occasional log or telephone pole or capsized derelict vessel to navigate around. keeps things interesting.

AP doesn't do much good in the delta waterways-- they are too narrow, twisty and have too many shallow spots.

Pineapple Girl said:

on an multi hour trip it is nice to "go to waypoint" versus "go to heading". either way, someone has to pay attention! We use the AP when we are in the SF Bay--though we do not currently have it hooked up to the GPS so we have to correct the course "fairly" frequently to stay on track and stay clear of pesky channel markers and anchored frieghters. We usually switch to stand by when dodging moving vessels (ferries and whatnot). Luckily we don't have crab pots or much in the way of logs to dodge, though in winter there may be the occasional log or telephone pole or capsized derelict vessel to navigate around. keeps things interesting.

AP doesn't do much good in the delta waterways-- they are too narrow, twisty and have too many shallow spots.

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OK..then why the snide and totally INCORRECT comment "it is SUCH a huge difference."??????

Most experienced mariners KNOW the difference between navigating and being a lookout....