Marine Insurance

[JohnV8r]

Hey Guys,

Boat US is proposing to drop Shambala's stated value from the $45K on her survey (18 months old) to $35K based on their information that the current market value of a gas powered Bertram 31 is between $20 - $28K. They are increasing the stated value policy from $28K to $35K based on condition.

Is anyone else experiencing this? Also, what other insurance providers can I shop around with?

Thanks,

John Vietor

[PeterPalmieri]

Progressive provided me a policy based on whatever value I gave them and charge me accordingly. I believe they refer to it as "Agreed upon value". I have also provided them with receipts for upgraded or add on items. My premium goes up but I'm covered.

[JohnV8r]

I've had an Agreed Value policy with Boat US since 2003. They have always based the value off my survey. Now for some reason, their Underwriting Department is a better judge of value than the guy who inspects the vessel. Even more conspicuous is the fact that the market value of Shambala dropped $10K in one year. What a uniquely round number?!?!...and don't even get me started about what moron thinks my B31 dropped 22% of the surveyor's valuation in one year. The boat market is definitely in the tank, but it hasn't dropped another 22% in the last 12 months.

I'm waiting for a quote back from "Global Marine Insurance Agency." Nothing would give me more pleasure at this point then tell Boat US, "F**k Off, strongly worded letter to follow."

[Carl]

Insurance is getting out of hand...

Wondering...are they reducing your premiums by the same 22% ???

[JohnV8r]

That's another great point. Premium is within $2 of last year's premium.

[JohnCranston]

John,
I shopped around, and, Ace Insurance was half the price of everyone else, and, a much better policy then most. They insured the full survey amount.
Good luck,
John.

[Tony Meola]

Just a word of caution. Make sure they cover the mechanicals and what they cover. My sister learned the hard way.

[Kevin]

I saved a ton of money on my boat insurance by telling the insurance company to pound sand. I had my boat appraised right after the diesels went in in late 2006. I think it came in around 102K. I thought I was paying for an agreed value which I had set to somewhere around 80K. The next year my boat depreciated about 10-15K and the same the next year. I argued and argued with them but the way they did math I paid the same but had less coverage despite having said agreed value. Since dropping it altogether I have saved about 7K in the past 6 years. It is very risky....I know.

If I had the option I would not have insurance on the house either (other than liability). It is all a giant scam in my opinion.

[JohnV8r]

The big issue here is CA is the spill insurance. If you puke over the side of the boat out here, they are liable to call in a hazmat team.

Plus I have to list my marina as an additional insured.

[JohnCranston]

Kevin,
You're my kind of man! Just roll the f-ing dice! I never get extended warrantys on anything, it's always worked out for me so far.I like the way you think.

John.

[mike ohlstein]

If you have little to lose, it doesn't matter. If you're like Dug, you need liability insurance that at least covers you up to where your umbrella policy kicks in.

[Kevin]

Hell yeah, I am at rock bottom right now! The good news is that it can only get better! Just kidding.
I kind of made my own insurance policy:

I have never had fewer than 5 fire extinguishers aboard.
Diesel engines, not gas.
Always turn off battery switches when not aboard.
Lift stored, lots of boats sink at the dock.
Hurricanes....never leave your boat in marina or dry storage. They always end up in a pile.
Theft....people don't steal this type of boat around here cuase it aint fast enough and it sticks out like blood vessel.
Catastrophic hull failure while underway.......I will be relying on creative ingenuity and pure adrenalin at that point. That's why we have Bertram boats though.

Hopefully I will not have to eat my words. If you don't see me on the site for 6 months it's because my boat burned or it sank.

[PeterPalmieri]

I think of the insurance first for liability. Someone cuts their finger off with a bait knife, some drunk idiot in a speed boat crashes into you and dies. Law suits are the American way.

Years ago my nephew fell at his aunts house and broke his arm. My sisters insurance company sued my other sister and collected on her home owners policy. Neither sister even had a say in the matter.

[Navatech]

Progressive won't insure a boat my size (46')... They will insure smaller boats that are twice to trice the value of my boat... Boats that aren't only more expensive but highly desirable by the criminal element... BoatUS will insure my boat but they won't do "agreed value"... They'll only insure it for what I have put into it... Excluding sales taxes... Go figure...

I finally found some company that is willing to insure me on an "agreed value" basis... BUT, they insist that I have a commercial captain sign off on the fact that I can properly handle the boat... Irregular (I believe) but totally unreasonable... It's a battle sled... They also insist that every little remark found by the surveyor will be fixed... And they want a resurvey to verify the repairs... I can understand that as far as major things (e.g. stuck sea cocks, bonding issues, old hoses and so forth) goes but some slight rust in the kitchen sink?!... It's only cosmetic for C's sake... Or, having welding cables as main 32 volt cables?!... Every single similar boat I looked at in the marina had the same cables!...

[CaptPatrick]

Or, having welding cables as main 32 volt cables?!...

Welding cable IS superior to regular stranded electrical cable, of the same gage. Electrons flow across the surface of a wire, not through it. Welding cable has many more individual strands of wire than regular electrical cable and therefore less resistance to electrical flow. The other plus is that welding cable is more flexible than standard cable. The down side is that the strands are not tinned and must be properly tinned and sealed at the connector ends.

[JohnV8r]

I checked with Progressive. They will only provide "liability" coverage for a 1978 Bertram 31. $632 annual premium. No agreed value policy is available from Progressive for boats over 20 years of age.

Global Insurance provided me with an agreed value policy quote that also included a much more reasonable towing insurance quote. The quote below is for $978 with a $900 deductible. The price drops to $885 for a $1350 deductible. I usually pay a $181 a year for towing insurance, so the total cost is comparable. Not sure what I'm going to do yet. Here is page one of the Global quote for everyone's reference:

[ljmauricio]

I have Progressive. 1965 31 Sportfish. Stated value $40.000. No survey. Premium around $1700.

[John Swick]

$300,000 liability ????
That's crazy.
Hope u have an umbrella policy.
Don't sweat the hull damage part.......big picture.....that's the small stuff.
UV hit the nail on the the head when he called insurance legalized gambling.
I got a kick out of his reference to bookies......now that the shoe's on the other foot.

[Michael]

Have never insured any boat I own, and I work for an insurance company and it is still too expensive even with a staff discount. I agree it is a rip off especially if you maintain your boat well, check it often, especially in poor weather conditions, are boat savy etc etc. Never bought a boat I could not pay for in cash, so no insurance requirement from a lender. Would carry liability insurance only.

[mike ohlstein]

$300,000 liability ????
That's crazy.
Hope u have an umbrella policy.

300K is pretty typical of the personal Umbrella floor. You purchase your homeowners, auto, boat, etc. to go up to 300K and the umbrella takes over from there.

[Navatech]

UV hit the nail on the the head when he called insurance legalized gambling.

I guess UV had learned his history... Or, and possibly and, remembered the old TV series "Onidin Line" http://en.wikipedia.org/wiki/The_Onedin_Line...

Marine insurance DID start as a form of gambling where the owners of the vessels/cargo would wager that their ship wouldn't come in and the punters would wager that the ship would come in... That's where Lloyds (the 1st classification society) also got its start... Odds had to be calculated and the condition of the vessel was a big part of that...

A couple of additional related links:

http://en.wikipedia.org/wiki/Lloyd%27s_of_London

http://en.wikipedia.org/wiki/Lloyd%27s_Register

As you'll notice, there's more then one Lloyds but all of them trace their name back to the same coffee shop in London... One would have to wonder how the present would look like without Europeans having been introduced to coffee by the Turks @ Vienna... Somehow I doubt that a tea house would have been as conductive to this type of business...

[CamB25]

A possible strategy to get insurance, but I have not tried it yet and will not until my Bertram is finished.

Get the boat titled as a new vessel. From what I have been told, if the boat is refitted to a certain level, the hull ID can be changed. In my case, I am completely rebuilding the boat, probably 70% is new. The hull # will be JCBxxxxxxxx. Newly built custom boat. The JCB stands for Johnson Custom Boats. In terms of insurance, the boat is no longer a Bertram. Beau says this has worked on other boats he has built.

Just a thought.

[JohnV8r]

Cam,

That's an interesting idea that might work if a yard/boat builder were doing the work. The only thing that might trip that up would be that a new boat would be conveyed (sold) and sales tax would be paid. How does JCB deal with the bill of sale issue?

[Jamie MacKenzie]

I had a hell of a time convincing Boat US to revalue my '62 Express Cruiser. They considered the new engines (gas), cockpit deck, etc. as "maintenance" items. FInally, an underwriter looked at all my photos and receipts and raised it to $45K. It never occurred to me that they could just lower the value every year... I am naive. I had the same battle with my '65 Continental.

[Navatech]

That's an interesting idea that might work if a yard/boat builder were doing the work. The only thing that might trip that up would be that a new boat would be conveyed (sold) and sales tax would be paid. How does JCB deal with the bill of sale issue?

If I were JCB I'd purchase the boat for $1.00 and sell it back to the customer for whatever the repair/rebuild bill is...

[JohnV8r]

But then the "purchaser" would still have to pay sales tax on his "purchase" of the boat...

[CamB25]

I don't think anything has to convey. I own the boat and through the custom work (documented) it is transformed to the point where it can get a new number. The Mass. number that is currently on the title was a complete fabrication as Hull ID# were not used until the early 70's. The boat was titled new in 1963 in Mass. with some unknown number. My seller had to wrestle with them to get a title for my use and they probably used the next number in sequence to fill in the blank on the title. There is no hull ID tag on the boat.

I'll check some details the next time I speak to Beau, if you are interested. My completion date is so far out that I haven't thought about this at all.

My thinking is that by you changing gas for diesel, you have "fundamentally transformed" (someone else said this first! ha!) the vessel and the cost of the diesels probably exceeds the value of the boat with gas engines before the re-fit and, therefore, the math might work to convince the authorities. It's basically a new boat if you look at the receipts.

Another thought - maybe you can insure the diesels alone? Same logic as above - boat value is in the iron (someone else said this first, too! Ha!).

Cam

[Navatech]

But then the "purchaser" would still have to pay sales tax on his "purchase" of the boat...

That sales tax would be for the repair/rebuild amount... And the "purchaser" would have to pay that either way... I'm disregarding cash options... As we're all law abiding people...

[JohnV8r]

@Navatech: That is true on the taxes.

Maybe it would work. I guess it's my legal background that makes me skeptical. There are yacht building standards and Coast Guard requirements for 2014 that would have to be met. There are all kinds of issues selling a boat where the true date of manufacture comes into question. Two immediate questions come to mind on this one:

1. If I'm standing in front of a judge and he asks me what was done differently to my Bertram 31 to make it a new custom boat versus the open checkbook repower and refurbishment other Bertram 31's like "Buddy Boy" went through, what could I possibly respond with?

2. What would I tell a judge was done to the biggest component on any boat - the hull - to constitute it being called new? Engines, shafts, struts, props, wiring, etc, all have a shelf life. When you buy a fiberglass boat, it's with the understanding that the hull will outlast all of the other components inside the hull. So how could I legitimately call a boat with a hull built in 1978 a new custom boat.

[Todd Pearce]

HI, I`ve lost a boat that I personally finished from the bare hull up,put 3000hrs in her, had her in a dry stack and when they launched her for me,well, actually I cant say, because the rest was sealed in court, after a long and protracted case that my insurance company lawyers took all the way, What I learned along the way ,1 read your contract right through, 2 an agreed value policy is the ONLY way to go, 3 pay a fair price, not the cheapest, from a well backed company,I only got one of the three right in that I chose I great insurance company who after 3 mths of haggling over the value paid me promptly,I was clad to assist with the court case,but the rest of the process was an emotional rollercoaster, which would have been easily avoided with an agreed value policy, losing that boat is etched in my mind not an experience I would wish on anyone
Regards Todd

[Navatech]

@Navatech: That is true on the taxes.

Maybe it would work. I guess it's my legal background that makes me skeptical. There are yacht building standards and Coast Guard requirements for 2014 that would have to be met. There are all kinds of issues selling a boat where the true date of manufacture comes into question. Two immediate questions come to mind on this one:

1. If I'm standing in front of a judge and he asks me what was done differently to my Bertram 31 to make it a new custom boat versus the open checkbook repower and refurbishment other Bertram 31's like "Buddy Boy" went through, what could I possibly respond with?

2. What would I tell a judge was done to the biggest component on any boat - the hull - to constitute it being called new? Engines, shafts, struts, props, wiring, etc, all have a shelf life. When you buy a fiberglass boat, it's with the understanding that the hull will outlast all of the other components inside the hull. So how could I legitimately call a boat with a hull built in 1978 a new custom boat.

I wasn't addressing the whole concept... Just the tax issue... I took it on faith that a boat rebuild over X% could be reregistered as a new boat... As for yacht building standards and Coast Guard requirements for 2014, I believe that with a boat being rebuild to that extend they wouldn't be a problem as doing it the "right way" makes sense anyway... One of the biggest jobs would be the rewire and I would think that was being done anyway... Doing it according to new standards only makes sense... The biggest issue I see is that for a 2014 built boat the requirements are for a tier 3 or 4 (EPA) engine... That means a new engine... I.e. not a remanufactured older engine...

As for engines, I'm not a lawyer but I have been told that depending on how the law is interpreted, "grandfathering" of older type (remanufactured) engines is questionable anyways... Caveat: I was told this by an engine manufacturer so I have my suspicions...

As for your point regarding the hull, I would say that if stringers were replaced, bulkheads were renewed and other major jobs done (e.g. re-coring of the deck/transom) you'd have more then enough arguments for claiming a new hull... New gel coat and possibly one new layer of cloth on the inside would clinch it IMHO as you'd be able to claim that the old hull was only used as a core...