Total Loss Options

[guy with a boat]

Originally Posted by Pau Hana

I respectfully disagree on your premise regarding insurance (see above in red).

The insurance contract will settle the total loss claim per the contract as I noted above (Agreed Value vs Actual Cash Value). It's really that simple.

No insuring company looks for ways to not pay a claim- that is business suicide. The insurer will look to confirm that the claim meets the policy language- and this is key. If you opt for a lower priced policy, understand you are also opting for (potentially) much less coverage overall. Conversely, a higher priced policy from a reputable company will have less exclusions and therefore more coverage.

People are conditioned to opt for the lowest price as a prime consideration of value, where the prime consideration should be coverage first, then price.

So- it is is truly a case of caveat emptor.

I completely agree. I see people make statements about insurers dodging claims and I wonder if they are discount carriers or otherwise second-rate insurance companies.

I've had several claims over the decades (never with a boat) and have only had professional, reasonable actions from the insurers. They don't overpay the claim and don't cover policy exclusions, but they have paid all that they rightfully owe without resistance. To do anything else would be, as Peter says, professional suicide. What agent would place even one more client with a carrier that didn't stand behind their policies?

Read the policy terms before you select a carrier and you won't be disappointed with the results if you ever need to make a claim. Better yet, get the help of someone like Peter/Pau Hana and you will have guidance in finding the coverage that is the most cost-effective and not just the cheapest.

[ksanders]

Originally Posted by Circumnavigator

I am not an insurance expert, but I doubt this is correct. If the boat is documented, then there is no such thing as a "salvage title" and I doubt that the boat will change owners on paper.



If it is state registered, I also doubt that it will change owners on paper.


Jim

My son just went through this on a USCG documented boat

He made an offer on a boat, and the marine escrow company pulled an abstract of title with the USCG National Vessel Documentation Center. It showed a chain of ownership including an insurance company and a salvage company.

The marine lender promptly declined accepting the boat as collateral for any loan.

[STB]

Originally Posted by O C Diver

If the insurance pays off the boat, declares it a loss, and lets the owner buy it back, it will probably be uninsureable as he will only get a salvage title. Hard to know how much they will pay as a simple claim.

Ted

Where does this stuff come from?

There is no such status on a federal document. And federally documented vessels have no other title.

There is no such status in Florida. There is a very limited designation for hull damage, which has nothing to do with the cost of repair, just hull integrity:

(n) “Hull damaged” means compromised with respect to the integrity of a vessel’s hull by a collision, allision, lightning strike, fire, explosion, running aground, or similar occurrence, or the sinking of a vessel in a manner that creates a significant risk to the integrity of the vessel’s hull."

-- Statutes & Constitution :View Statutes : Online Sunshine


My boat took on water at the slip 2 owners ago. The boat next to me nearly sunk at the slip -- twice. The boat across from me suffered a major fire. All were bought by insurance and resold (onnone case back to the original owner). None have any type of branded title or document. None of any trouble with insurance.

If you look at the abstract of title you can see a prior owner was an auction company or an insurance company, which gives a hint as to the history, but none of them have been branded or limited, and continue to be insured. Just surveys were required.

The range of time is from 2014 (my boat) to 2023 (the boat next to me).

I don't know NY law, if the vessel is state titled there. Or what other jurisdiction might be involved if somewhere else.

But, I wouldn't bet on there being any problem until I checked with wherever it is state titled, if state titled.

I've just never actually heard of this being a problem.

But I sure do see a bunch of people on the Internet suggesting it could be. And maybe it could be somewhere.

But given the hurricanes and storms in Florida....a huge part of the fleet would likely be branded. That isn't the case.

[rslifkin]

Originally Posted by ksanders

My son just went through this on a USCG documented boat

He made an offer on a boat, and the marine escrow company pulled an abstract of title with the USCG National Vessel Documentation Center. It showed a chain of ownership including an insurance company and a salvage company.

The marine lender promptly declined accepting the boat as collateral for any loan.

That seems a little crazy to me. I could see them requiring a survey before they'd accept it as collateral, but to just say "we don't care how well it was fixed, we know it was damaged before so it's now worthless junk" seems crazy.

[SteveK]

Originally Posted by rslifkin

That seems a little crazy to me. I could see them requiring a survey before they'd accept it as collateral, but to just say "we don't care how well it was fixed, we know it was damaged before so it's now worthless junk" seems crazy.

You beat me to it. Perhaps Pau Hana has a comment on this as I also am baffled why a salvaged boat put back into operation cannot be insured.

I have only had agreed value somewhere below percieved value and fully expect the agreed value to be paid out upon a total loss without sketchy details.

[O C Diver]

Originally Posted by rslifkin

That seems a little crazy to me. I could see them requiring a survey before they'd accept it as collateral, but to just say "we don't care how well it was fixed, we know it was damaged before so it's now worthless junk" seems crazy.

A survey? The average surveyor isn't well regarded here.

If the boat was sunk, how do you know ALL the electrical wiring was replaced?
How do you know the engines and generator were replaced or completely rebuilt?
Think of all the potential problems a sunk boat could have. Then ask yourself why an insurance company would want to insure that potential nightmare. Why would a bank want that potential nightmare as collateral.

Ted

[ksanders]

guys regarding the bank, not accepting a boat that had once been salvaged as collateral is their absolute decision.

remember when you were asking to borrow money and offering some thing as collateral the lender has a choice to accept that item as collateral for the loan or not.

My son was going through a very well regarded yacht finance specialist with multiple avenues for lending, and they could not find a lender that would accept the boat as collateral after it had been salvaged.

The insurance is another story that I am not sure how would've eventually resolved.

My kids just chose a different boat and they are going to survey today, but they made for darn sure to ask before they flew all the way from Alaska to Florida whether the boat had ever been storm damaged to the point that it had been purchased by the insurance company.

[SteveK]

If the boat was sunk, how do you know ALL the electrical wiring was replaced?

On a boat that sunk inside boathouse the adjuster for insurance madated that all wires be cut 18 inches and new wire spliced in. Having the ability we replaced all wiring using the insurance allowance.

[twistedtree]

Either way, it does seem important to not end up with a tainted title. Perhaps the key is to negotiate a settlement with the insurance company that doesn’t involve them ever taking title to the boat. I think I’d also ask explicitly whether they in anyway flag the boat as having been declared a constructive loss, and ideally write a prohibition on that into the settlement.

[O C Diver]

Originally Posted by SteveK

On a boat that sunk inside boathouse the adjuster for insurance madated that all wires be cut 18 inches and new wire spliced in.

I'm assuming this was for a boat that only got water in the bilge? Can't imagine doing every electrical outlet and every recessed light fixture in the ceiling.

Ted

[ksanders]

Originally Posted by twistedtree

Either way, it does seem important to not end up with a tainted title. Perhaps the key is to negotiate a settlement with the insurance company that doesn’t involve them ever taking title to the boat. I think I’d also ask explicitly whether they in anyway flag the boat as having been declared a constructive loss, and ideally write a prohibition on that into the settlement.

I agree... If you want to sell the boat someday you need to show a chain of ownership that does not include insurance companies or salvage.

[SteveK]

Originally Posted by O C Diver

I'm assuming this was for a boat that only got water in the bilge? Can't imagine doing every electrical outlet and every recessed light fixture in the ceiling.

Ted

You know what they say about assume

[dannc]

Originally Posted by guy with a boat

I completely agree. I see people make statements about insurers dodging claims and I wonder if they are discount carriers or otherwise second-rate insurance companies...

I had car insurance with Nationwide decades ago. They were not on my side but they went up my back side when my car was stolen. They lied at every level to minimize paying the claim. The claims adjuster lied. The manager lied. When I used Nationwide's complaint line the agent said that hurt my case. Really? I called up the complaint line, discussed how my case was being handled, and that HURT me? REALLY?

This was not just a local issue either. A man went into the Jacksonville office and killed a bunch of people due to how he was being treated with a claim.

Unfortunately, I have had other claims since then, and fortunately, the other insurance companies treated me fairly and with respect. Can't remember who I had with one claim, but they, and NC Farm Bureau, were awesome. In the other claims, I had no complaints about how I was treated or the payout. They were more than fair and responsive. Nothing but praise.

Nationwide?

Nationwide might have changed. I don't know. I will never, ever, do business with them again. My experience with them told me the company was rotten from top to bottom.

I didn't think Nationwide was a second rate company, their premiums certainly were not, and even if they had paid out correctly, they still would have made money on the premiums I had paid them for years. So yeah, some insurance companies treat people poorly.

Later,
Dan

[Larry M]

I had a marine claim for $60k plus that started at $22k. A lot of paper work. I was responsible for paying the boat yard but not one invoice or estimate, I submitted to the insurance company over a 4 month period was denied. They did send out their surveyor periodically. That was with BoatUS.

I also had a claim with Seaworthy for an outboard motor. A couple of emails with the original invoice and I had a check within 30 days.

[Shrew]

Why in the world would you start ordering parts before you had an insurance adjusters approval?

You would need to asses the full extent of the damage, then get an estimate, then find out of the boat was going to be declared a total loss (Yes, a severe grounding is expensive and a $40K agreed upon value is not a lot).

Cancel the parts, collect the check and move on to the next boat.

[Brooksie]

Originally Posted by Pau Hana

I respectfully disagree on your premise regarding insurance (see above in red).

The insurance contract will settle the total loss claim per the contract as I noted above (Agreed Value vs Actual Cash Value). It's really that simple.

No insuring company looks for ways to not pay a claim- that is business suicide. The insurer will look to confirm that the claim meets the policy language- and this is key. If you opt for a lower priced policy, understand you are also opting for (potentially) much less coverage overall. Conversely, a higher priced policy from a reputable company will have less exclusions and therefore more coverage.

People are conditioned to opt for the lowest price as a prime consideration of value, where the prime consideration should be coverage first, then price.

So- it is is truly a case of caveat emptor.

Insurance industry well represented here...