How often is your insurer requesting a survey

[boatpoker]

If you allowed the owners to state value, fraud (already endemic) would skyrocket and once again the underwriters would be out of business in short order.

[S/V Illusion]

Originally Posted by Mike OReilly

How or why would they possibly care? As long as the premium being paid is appropriate for the insured value, it can make no difference.

Two examples to illustrate:

#1. Boat actually valued at $200K. Insured at that amount. Rate set appropriately. Total loss. Insurance pays the $200K.

#2. POS boat insured at $200K. Rate set appropriately. Total loos. Insurance pays $200k.

What’s the difference?

The only possible difference I can see is mismatched real vs insured value could be an indicator of potential future fraud … that I could understand.

That wouldn't happen - no underwriter would ever pay more than the boat value regardless of how much someone insured it for. That's just wasting money for the jerk who tried that.

[Mike OReilly]

As I said, I understand the issue of fraud. Setting that aside, how does it make one iota of difference to the insurance company’s bottom line? In either scenario they are out $198K. They don’t care about the boat. They care about their profits.

Question: Does the insurance company own a write-off? If so, do they routinely resell this wreck to recoup more of their loss? If so, then it makes sense that they would care about the real value of a boat.

[Mike OReilly]

What does “agreed value” mean? I have had an agreed value policy my entire boating life. I’ve usually agreed to insure it at lower than it’s actual value (which is still very theoretical given the market for my boats). But my last policy was at an agreed value which was likely higher than the boat’s value due to deprecation and changing market dynamics.

[boatpoker]

Originally Posted by Mike OReilly

As I said, I understand the issue of fraud. Setting that aside, how does it make one iota of difference to the insurance company’s bottom line? In either scenario they are out $198K. They don’t care about the boat. They care about their profits.

Question: Does the insurance company own a write-off? If so, do they routinely resell this wreck to recoup more of their loss? If so, then it makes sense that they would care about the real value of a boat.

Fraud is endemic ! One cannot set it aside. Google it. It makes up a large part of your premium already.


It costs an insurer more to get rid of a write off than could ever be recouped in parting out. eg. disposing of a 30' sailboat in Ontario can cost between $6 and $12k. Storage, dismantling, steam cleaning all petroleum products, disposing of the resulting fluids, labour in cutting up, Ministry of Enviroment inspection prior to cutting up. landfill fees etc.

[Mike OReilly]

Originally Posted by boatpoker

Fraud is endemic ! One cannot set it aside. Google it. It makes up a large part of your premium already.

OK, so it’s fraud. It’s not the insured value. It’s the idea that over-insured value promotes fraud. Got it.

[sailorboy1]

I’ve had my boat for 8 years now. I have an agreed value policy and I havent lowered the value during the 8 years. The insurance company has renewed my policy and has never asked me about about the value and my premium has been based on the agreed value. I haven’t looked or researched the current value of my boat based on recent sales, but bet it is now less than what paid for my boat and the agreed value.

So, should my boat become a total loss from something should I get the agreed value or the current “value”.

[Fore and Aft]

Mike there was a company here in Australia that did marine insurance with no survey required. Twice they employed me to write a report about a boat that was a total loss. Both times the boats were way overvalued and in one case the owner was looking like he was going to get a very good return on his investment. The insurance company in one of the cases did not end up paying a cent as it was really a case of fraud.
Cheers

[blubaju]

Pantaenius, 10 years now, no claim, never asked for a survey, hope they give me 20 years too ;-) but i am warned of a considerable price hike this march bcs of hurricanes in carribean & southern US. Unfortunately they consider our typhoons to be hurricanes. Before i was 10 years with Hannover, no survey asked, no claims. Hannover, thats what they say, restrict to European waters now -this info is 10 years old!

[boatpoker]

Originally Posted by sailorboy1

I’ve had my boat for 8 years now. I have an agreed value policy and I havent lowered the value during the 8 years. The insurance company has renewed my policy and has never asked me about about the value and my premium has been based on the agreed value. I haven’t looked or researched the current value of my boat based on recent sales, but bet it is now less than what paid for my boat and the agreed value.

So, should my boat become a total loss from something should I get the agreed value or the current “value”.

You should get the agreed value. One of the prob;ems with underwriters is inconsistency. Most (not all) have a policy of requiring a survey every five years. Many I've dealt with (on mybown boats) and on assignments are incredibly lax about that, often going 7 or 10 years or even more before making the request. This usually changes after a big hurricane hit and they tighten up considerably (for a while).

The first big kick in the ass came after Katrina, then Sandy was even a bigger hit and as you know there have been several other big hits on the US mainland since then. The industry is changing rapidly.

[billgewater]

Many vessels in Australia are only insured because marinas demand it.

Reeks of collusion to me.

I lived on board in Darwin for a decade at mooring, not a marina. Saved a small fortune in insurance premiums.

In Queensland, the local rules require that vessels over 15 m must have two specific (to Queensland) insurance clauses to protect the reef. However, you can't get these two items covered unless you purchase a fully comprehensive policy from the insurance companies. Along with surveys and pages of fine print exclusions and conditions.

The insurance companies run policies that are packed with fees (brokers/surveys) that they expect you to cover. Do you know any insurance companies that have their own certified competent surveyors? Can you access insurance companies without going through a broker?

I reckon Mike OReilly has got it right. We are being taken to the cleaners.

[Mike OReilly]

Originally Posted by sailorboy1

I’ve had my boat for 8 years now. I have an agreed value policy and I havent lowered the value during the 8 years. The insurance company has renewed my policy and has never asked me about about the value and my premium has been based on the agreed value. I haven’t looked or researched the current value of my boat based on recent sales, but bet it is now less than what paid for my boat and the agreed value.

Mine is exactly the same. I’ve been insured with an agreed value policy for seven years. A valuation of my boat by a sales broker who wanted to list it put the value considerably lower than my insured value. Yet it had not changed over those seven years. In the case of a total loss, I guess I would have won.

I get the fraud issue. I am dubious as to the claims that it is rampant. It seems to be the standard reason trotted out by the insurance companies to maintain and raise rates. How do we know they’re telling the truth? After all, if individuals commit fraud, why wouldn’t companies?

But I know it does happen.

[boatpoker]

Originally Posted by Mike OReilly

I get the fraud issue. I am dubious as to the claims that it is rampant. It seems to be the standard reason trotted out by the insurance companies to maintain and raise rates. How do we know they’re telling the truth? After all, if individuals commit fraud, why wouldn’t companies?

But I know it does happen.

Fraud is the reason I quit insurance work. I know you won't believe this but in thousands of claims I witnessed 80% fraud. Of those the vast majority were paid out. It disgusted me. My frustration began to affect my attitude so I quit accepting ins. assignments.

What I saw was that claims up to about 25k were routinely paid out even when I strenuously objected .... simple numbers, it was cheaper to pay than fight. around $40k it would take a little bit of perseverance but you would get paid no matter how ridiculous the claim. If there was a serious personal injury or the claim got over 100k, then you were likely going to have a fight on your hands to get your money whether you were right or wrong.

As I said. I am no fan of these people but I do try to be fair. Lets condemn them for the stuff they do wrong, not the stuff that is simply standard business practice. If you want them to pay for your survey, terrific. Like the cost of their envelopes and office rent they will just add it to your premium like every other cost they accrue.

My other beef with these people is that they accept survey reports by anyone that had the fifty dollars for business cards and some of the survey reports they accept from these charlatans would be funny if it were not so sad.

I have some samples of these pathetic surveys here ... Sample Marine Survey Reports. Keep in mind that all of these were accepted by underwriters.

[lovinlifebda]

Thanks for all the replies, great information and discussion. My insurance is not due until Nov 1 but I will be taking this up with the broker now! I was asked in one reply to name the underwriter...it is Great Lakes Insurance SE. This forum is great, knowledge is very empowering.

[Mike OReilly]

Originally Posted by boatpoker

Fraud is the reason I quit insurance work. I know you won't believe this but in thousands of claims I witnessed 80% fraud. Of those the vast majority were paid out. It disgusted me. My frustration began to affect my attitude so I quit accepting ins. assignments.

Well… if that’s the rate of individual fraud, then why would it be any different on the flip side? Unless you ascribe superior ethical standing to companies vs individuals, the fraud rate should be similar.

Apropos, I just finished the book Everyone Lies (by big data researcher Seth Stephens-Davidowitz). Not surprisingly, we all lie, all the time. It’s who we are.

Originally Posted by boatpoker

… If you want them to pay for your survey, terrific. Like the cost of their envelopes and office rent they will just add it to your premium like every other cost they accrue.

My other beef with these people is that they accept survey reports by anyone that had the fifty dollars for business cards and some of the survey reports they accept from these charlatans would be funny if it were not so sad.

Absolutely pass the cost on. It is the cost of doing business. But that would be no worse than it is now. We’re already paying.

By centralizing and having one major buyer vs thousands of individuals, the price could be better controlled and likely reduced. So it would likely cost everyone less overall.

AND, it would better address your second very salient concern. My much smaller sampling of insurance surveys tells me most aren’t worth the paper they’re written on. This is why I said the whole exercise seems to be more of a bureaucratic check box, than a real attempt at adding value.

I value good surveys and surveyors. I have hired good surveyors to go over my boat outside of any insurance demands. I found it an excellent tool for prioritizing upgrades and identifying problems. But most insurance surveys I’ve seen are superficial fluff.