Total Loss Options

[larman]

While underway from NY to FL we hit a submerged jetty in Delaware City. We were able to get the boat into the marina and had it hauled out. Extensive damage to running gear. Bottom line I have an agreed value of 40k and the repair bill is 35k with a 5k deductible. I submitted this claim on Saturday so I have not heard from the insurance company. I have a bad feeling they are going to total the bill boat. If they do I don’t know how much I will get. The boat yard who has already ordered all the repair parts is going to get a huge chunk if I decide to walk away. I guess another option is to take the settlement buyback boat from insurance company and fix the boat. Not sure which way to proceed?

[DavidM]

Since you have already committed to purchase the parts, the boat will be fixed one way or the other. So the only thing to do is take the insurance settlement and either keep the boat or sell it after it is fixed.

So the only question is, do you want the boat?

David

[ksanders]

Originally Posted by larman

While underway from NY to FL we hit a submerged jetty in Delaware City. We were able to get the boat into the marina and had it hauled out. Extensive damage to running gear. Bottom line I have an agreed value of 40k and the repair bill is 35k with a 5k deductible. I submitted this claim on Saturday so I have not heard from the insurance company. I have a bad feeling they are going to total the bill boat. If they do I don’t know how much I will get. The boat yard who has already ordered all the repair parts is going to get a huge chunk if I decide to walk away. I guess another option is to take the settlement buyback boat from insurance company and fix the boat. Not sure which way to proceed?

The first thing I would do is cancel any parts ordered.

Your insurance, if and it probably will declare your boat a constructive loss will pay you according to your policy, and I am pretty sure pay the boat yard the haul out, and any other fees associated with keeping your boat from sinking as well as the costs to estimate the damages separately as liabilities.

You could choose to take the payout and buy the boat back, which might be a good deal for you depending on the amount they want for the boat.

[larman]

Originally Posted by DavidM

Since you have already committed to purchase the parts, the boat will be fixed one way or the other. So the only thing to do is take the insurance settlement and either keep the boat or sell it after it is fixed.

So the only question is, do you want the boat?

David

Hi David, this is the boat Livin The Dream you helped me move from Baltimore to Long Island in 2019. Yes we want to keep her. We would like to continue our journey south. Here’s hoping to a favorable experience with our insurance company.

[DavidM]

That boat is worth more than $40k for sure. Fix it and keep it along with increasing your agreed value to something more realistic.

David

[O C Diver]

Originally Posted by DavidM

That boat is worth more than $40k for sure. Fix it and keep it along with increasing your agreed value to something more realistic.

David

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

[Pau Hana]

Originally Posted by larman

While underway from NY to FL we hit a submerged jetty in Delaware City. We were able to get the boat into the marina and had it hauled out. Extensive damage to running gear. Bottom line I have an agreed value of 40k and the repair bill is 35k with a 5k deductible. I submitted this claim on Saturday so I have not heard from the insurance company. I have a bad feeling they are going to total the bill boat. If they do I don’t know how much I will get. The boat yard who has already ordered all the repair parts is going to get a huge chunk if I decide to walk away. I guess another option is to take the settlement buyback boat from insurance company and fix the boat. Not sure which way to proceed?

Questions:

• Who is your carrier?
• Why were parts ordered prior to any contact with your insurer?

If your policy is Agreed Value coverage, your settlement will be the value shown on your declarations page. If Actual Cash Value, you’ll negotiate the value at time of loss.

The best option is to slow your roll and see what the claims team has to say.

[SIBERNUT]

There is one other possibility. In this situation, as a ins co rep I have negotiated a "contract" with the repairer to fix the whatever for $xxx with no supplements. The owner may have to agree to pick up any additional, but meanwhile the boat is not"totalled" . I once had a Ferrari in a similar situation and did so. Owner begged me not to TL, because Ferrari will never sell another part for that car once TL.

[Brooksie]

If your boat is worth "way more" as stated above, usually claims will be prorated using the ratio what it is insured for vs: what it should have been insured for formula.
Think of an extreme example. You have a 50K boat insured for 25K, you can't expect full compensation when you have paid only 1/2 the premium.



Basically insurance companies only want to take in money and have many many ways on not paying out.


I don't know if there are such things in the marine world but I have used public adjusters on land based claims. They get you what you are entitled to and keep a % of what extra they get as their payment.

[Pau Hana]

Originally Posted by Brooksie

If your boat is worth "way more" as stated above, usually claims will be prorated using the ratio what it is insured for vs: what it should have been insured for formula.
Think of an extreme example. You have a 50K boat insured for 25K, you can't expect full compensation when you have paid only 1/2 the premium.



Basically insurance companies only want to take in money and have many many ways on not paying out.


I don't know if there are such things in the marine world but I have used public adjusters on land based claims. They get you what you are entitled to and keep a % of what extra they get as their payment.

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.

[Circumnavigator]

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

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

[keith c]

In my humble yet accurate opinion, coming from a35 year retired claims adjuster/manager. The/A/Any insurance company will move heaven and earth to reduce/delay/deny claims. Check any policy. The coverage section is small.
The exclusion section covers many pages.

[O C Diver]

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

It might be that there isn't a salvage title, but when a perspective insurance company or a lending institution runs the hull ID number, it will show it having been totaled, damaged beyond repair, sold for scrap, or whatever term the insurance industry uses.

Ted

[twistedtree]

Originally Posted by O C Diver

It might be that there isn't a salvage title, but when a perspective insurance company or a lending institution runs the hull ID number, it will show it having been totaled, damaged beyond repair, sold for scrap, or whatever term the insurance industry uses.

Ted

I too wonder if this is a real thing with boats. How does the title get changed or flagged?

[Pau Hana]

Originally Posted by keith c

In my humble yet accurate opinion, coming from a35 year retired claims adjuster/manager. The/A/Any insurance company will move heaven and earth to reduce/delay/deny claims. Check any policy. The coverage section is small.
The exclusion section covers many pages.

In what discipline were you a claims professional?

In the marine world I play in, the All Risk/Agreed Value policy has few exclusions and plenty of wording on inclusionary coverage.

[O C Diver]

Originally Posted by twistedtree

I too wonder if this is a real thing with boats. How does the title get changed or flagged?

You don't think vessel ID numbers are flagged when a vessel is stolen or sunk and the insurance pays off?

Ted

[Delta Riverat]

I would think that a Title Co would find this also.

[twistedtree]

Originally Posted by O C Diver

You don't think vessel ID numbers are flagged when a vessel is stolen or sunk and the insurance pays off?

Ted

I just don't know, hence the question. I could see it being true, but don't know if the boating world of insurance is organized enough across companies to actually do it, unlike in automotive. If I were thinking of buying back a totaled boat like the OP is, I would certainly want to know conclusively.

[danderer]

Originally Posted by Pau Hana

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.

Strongly agree.

[rgano]

I had a friend who bought a boat from Progressive Insurance after they totaled it in 2018. He got a clean Florida state title and was surprised and pleased.

That is my total knowledge on the issue.