How often is your insurer requesting a survey

[nextis12]

Originally Posted by Mike OReilly

Why do they care? If I want to insure it for $200k, then they’ll set my rate based on their established pricing. I don’t see how it is relevant to them what the boat is actually worth in the case of agreed value.



I understand the value in knowing the state of the boat in order to assess risk. But that is the information the insurance company needs to provide me with a quote for their service. Therefore it is THEIR cost of doing business.



As a business owner you don’t demand that your customer fund your proposal costs, do you? That would be like me demanding my publishers pay for me researching and writing my next story proposal. That would be great, but that’s not typically how businesses operate.



I can get house insurance without a survey. I can get car insurance. Yes, I understand these are more mass-market items, but given the quality of most insurance surveys (yours excluded, I’m sure), it seems to me it’s more of a bureaucratic check box than a real value item. Yet it is a real cost, and an even bigger PITA to many boaters.

Over insuring sets off red flags for money laundering scheme/insurance fraud. Junk boat over insured with a huge premium paid because the intent is to cash out.

[daletournier]

Originally Posted by Rachel Sloan

Rigging and hull damage due to a dismasting have never been covered by Markel Jackline (& most, if not all, yacht policies) IF the damage is found to have been caused by one of the policy exclusions such as normal wear & tear, corrosion, etc. The new Jackline policy language is actually an upgrade to still allow coverage for any consequential hull damage from a dismasting with a satisfactory rigging inspection <2 years old. Also an enhancement is that the policy used to entirely exclude coverage for the failure of rigging over 15 years of age - that exclusion has been deleted. The new consequential damage enhancement also applies to other types of losses not involving the rigging. For example, coverage for an engine failure may be excluded due to normal wear and tear. However, if the engine failure causes you to suffer a collision, any resulting damage to the yacht is going to be covered. These are important coverage's that you’d be hard pressed to find an any other cruising policies.
~Rachel Sloan, Jackline Account Manager @ Gowrie Group

Hi Rachael, i requested a quote from your office yet you denied one advising me I had to get in insurance through an Australian outfit. My boat is Australian registered yet it spends zero time there why would your company not want the business? I find it frustrating being refused acess to the international market as Australian providers (of a number of products) are often more expensive.

Not a attack, just curious of reasoning?

[valhalla360]

Originally Posted by Mike OReilly

If insurance companies managed and paid directly for the surveys THEY want, then it would be easier to control for quality and fraud. And it makes little logical sense that it would drive up costs.

Right now we have 10s of thousands of individual boat owners contracting with hundreds or thousands of surveyors. The vast majority of us boat owners have little skill in dealing with surveyors b/c we do it so infrequently. We have little information on quality and costs. AND we are usually under pressure to get the thing done. None of this promotes economic efficiency, and is wide open to abuse.

A few large single buyers of survey services would lower cost (just like any large buyer, for example Walmart), and it could provide better oversight.

Monopoly/Cartel/Price Fixing/Collusion...Not sure of the proper technical term but....if all surveys are handed out thru a central organization, there is little incentive to bring prices down as long as everyone pays the same, prices for the survey can keep going up and there is no market pressure to bring them down. The insurance company has no incentive to drive prices down because all the other insurance companies are paying the same rates...they are just a pass thru for the organization and tack a percentage on top...in fact the higher the survey price, the more that percentage translates to in terms of real dollars.

The US insurance market is a perfect example. The prices paid are often crazy because they distort the market.

[Fore and Aft]

The problem with using one central buyer is how do you set a fair price for the surveyor? Where I am based there is not enough work at my local marina so I do a lot of travelling. If I had to deal with one firm only then my cost will be higher just to make sure I am covered for unforeseen costs that happen with individual surveys.
Mike it’s bloody hard enough to organise a time for the seller, buyer, surveyor and boatyard to all agree on. Chuck in the insurance company as the organiser and you are looking at a nightmare situation.
The trouble with fraud is that often the owner is the one perpetuating it. It’s in the owners interest that the surveyor does not find issues with his boat. So if the owner can cover up the issue by having crab pots strategically covering the rot or his wife’s lingerie in the very locker that has structural issues then all the better for his survey report if it is not mentioned.
In a nutshell it’s hard to write a quality report if the owner is not honest to start with.
Cheers

[Mike OReilly]

Originally Posted by Fore and Aft

The problem with using one central buyer is how do you set a fair price for the surveyor? Where I am based there is not enough work at my local marina so I do a lot of travelling. If I had to deal with one firm only then my cost will be higher just to make sure I am covered for unforeseen costs that happen with individual surveys.

How do you set it now? You must already be pricing your service based on these factors. That’s not going to change. But competition probably will. This usually lowers prices — at least that’s the capitalist theory.

Originally Posted by Fore and Aft

The trouble with fraud is that often the owner is the one perpetuating it. It’s in the owners interest that the surveyor does not find issues with his boat. So if the owner can cover up the issue by having crab pots strategically covering the rot or his wife’s lingerie in the very locker that has structural issues then all the better for his survey report if it is not mentioned.
In a nutshell it’s hard to write a quality report if the owner is not honest to start with.

Agreed. That won’t change. But my point is that the quality of the surveyors will likely go up. My suggestion reduces the likelihood that a poor surveyor will remain in business. We’ve heard of many examples already in this thread. This is where my system can help. But you’re right, fraud will always exist.

Originally Posted by valhalla360

Monopoly/Cartel/Price Fixing/Collusion...Not sure of the proper technical term but....if all surveys are handed out thru a central organization, there is little incentive to bring prices down as long as everyone pays the same, prices for the survey can keep going up and there is no market pressure to bring them down. The insurance company has no incentive to drive prices down because all the other insurance companies are paying the same rates...they are just a pass thru for the organization and tack a percentage on top...in fact the higher the survey price, the more that percentage translates to in terms of real dollars.

The US insurance market is a perfect example. The prices paid are often crazy because they distort the market.

Sounds like you don’t believe in capitalism.

Tell all this to Walmart. Large single buyers can easily reduce cost. Monopolies certainly can lead to price distortions, but we’re not talking about a monopoly — unless you envision all insurance companies merging.

Insurance companies will still compete on price and service offerings. The cost of the survey — a cost we are already paying — will be incorporated into the cost of doing business. This will provide the necessary cost feedback to the insurance company that basic capitalism demands.

Again, unless you’re saying markets don’t actually work, this is how prices come under downward pressure. Right now there is a complete absence of this kind of feedback. The insurance companies have zero incentive and ability to encourage efficiencies. And as I said, the current buyers of the service have little knowledge or ability to do the same.

Will there be fraud at the insurance level — you bet. There already is. Having a fully functioning market where all the costs of insurance are included in the price will allow the buyers (us) to be better informed, and to make better choices. This is the basic market dynamic that theoretically keeps prices low.

[boatpoker]

Originally Posted by Mike OReilly

Agreed. That won’t change. But my point is that the quality of the surveyors will likely go up. My suggestion reduces the likelihood that a poor surveyor will remain in business. We’ve heard of many examples already in this thread. This is where my system can help. But you’re right, fraud will always exist.

I disagree Mike. The survey quality will go down. Only the bottom layers of surveyors will be attracted to the abbreviated, lower paying "insurance surveys". The good surveyors will go for the higher paying pre-purchase surveys every time.

In fact there are many surveyors out there that already do nothing but what has become accepted as an "insurance survey" of 2-6 pages (double or triple spaced)
.

There have been several attemps by underwriters to design a standard form for insurance surveys. I (and every other surveyor I respect) have refused to use their "checklist" surveys.

Only the dregs of the industry would be atttracted to pumping out checklists.

[boatpoker]

You guys might find the comments and explanation of costs on my Fee Schedule interesting.

[Mike OReilly]

Originally Posted by boatpoker

I disagree Mike. The survey quality will go down. Only the bottom layers of surveyors will be attracted to the abbreviated, lower paying "insurance surveys". The good surveyors will go for the higher paying pre-purchase surveys every time.

In fact there are many surveyors out there that already do nothing but what has become accepted as an "insurance survey" of 2-6 pages (double or triple spaced)
.

There have been several attemps by underwriters to design a standard form for insurance surveys. I (and every other surveyor I respect) have refused to use their "checklist" surveys.

Only the dregs of the industry would be atttracted to pumping out checklists.

Well, I'm glad you agree it will drive prices down. Maybe things will happen as you sugest. It sounds like this effect is already happening.

[boatpoker]

Originally Posted by Mike OReilly

Well, I'm glad you agree it will drive prices down. Maybe things will happen as you sugest. It sounds like this effect is already happening.

Nowhere did I suggest it would drive prices down, just the quality (which is already bottom of the barrel). So called "insurance surveys" are already priced at the bottom rung of the various survey types. That's not going to change.

I know guys here in Ontario that will do an insurace survey for $200. it will take them all of 20 minutes. This is what your proposed system would encourage and thats fine if you have no desire or need to learn anymore about your boat.

[Mike OReilly]

Originally Posted by boatpoker

Nowhere did I suggest it would drive prices down, just the quality (which is already bottom of the barrel). So called "insurance surveys" are already priced at the bottom rung of the various survey types. That's not going to change.

Sorry, when you wrote:

The survey quality will go down. Only the bottom layers of surveyors will be attracted to the abbreviated, lower paying "insurance surveys". The good surveyors will go for the higher paying pre-purchase surveys every time.

I interpreted that as meaning rates will go down. My bad.

So… what you’re saying is the rate is already as low as it can go, and good surveyors are already not doing these jobs (b/c the fees are so low?).

So… you’re saying is nothing will change.

OK… I’m not sure I accept all your suppositions, but even so, it still alleviate the PITA factor for many boaters. So to me, it’s still an improvement.

Originally Posted by boatpoker

I know guys here in Ontario that will do an insurace survey for $200. it will take them all of 20 minutes. This is what your proposed system would encourage and thats fine if you have no desire or need to learn anymore about your boat.

You should give out those people’s names. I bet there would be a lot of takers. Most boaters don’t want these silly things anyway. They’re a costly PITA that mostly just achieve a necessary bureaucratic check box.

[boatpoker]

Originally Posted by Mike OReilly

So… what you’re saying is the rate is already as low as it can go, and good surveyors are already not doing these jobs (b/c the fees are so low?).

No, I did not say it's as low as it can go. I said it's at the bottom of the market now. None of the good surveyors care how low that market goes. While the bottom gets crowded, there is always room at the top in any profession.

I rarely do surveys for insurance purposes and when I do, I do the exact same level of report as for any other purpose.

Your challenge is to go out and find the $150.00 insurance survey, surveyor ... they are out there and not hard to find.

[Fore and Aft]

I agree Boatpoker, we have one company here that does a tick form for their surveys. Because the form is so "easy" to fill out I am constantly asked to do it cheap.......I just don't do them cheap for two reasons. The first one is when the customer decides to change insurer and still then expects me to provide a better survey for the same price and the other one is that insurance company when a claim is made then rings me for more photos and more detail regarding that boat. So I end up wasting my time on a survey that was cheap.

Mike I think the only way costs would come down is if the marine surveyor worked for the insurance company. That would be a sweet job, paid holidays, superanuation and all expenses covered.
Cheers

[Simi 60]

Originally Posted by daletournier

Hi Rachael, i requested a quote from your office yet you denied one advising me I had to get in insurance through an Australian outfit. My boat is Australian registered yet it spends zero time there why would your company not want the business? I find it frustrating being refused acess to the international market as Australian providers (of a number of products) are often more expensive.

Not a attack, just curious of reasoning?

Would love to know why as well.

[Mike OReilly]

Originally Posted by Fore and Aft

I agree Boatpoker, we have one company here that does a tick form for their surveys. Because the form is so "easy" to fill out I am constantly asked to do it cheap.......I just don't do them cheap for two reasons. The first one is when the customer decides to change insurer and still then expects me to provide a better survey for the same price and the other one is that insurance company when a claim is made then rings me for more photos and more detail regarding that boat. So I end up wasting my time on a survey that was cheap.

In this first case, why wouldn’t you just charge them for a new survey? Why would you have to work for free to produce a second, better, survey?

And the second one is just amazing. You have insurance companies come back to you later (perhaps much later) asking and expecting you to provide more information to them? Do they pay you for this?

Besides, the insurance company is not even your client. The boat owner is. Why would you feel any obligation to work for free for a third party? Heck, are you even ethically able to provide them with more? After all, they’re not your client.

Originally Posted by Fore and Aft

Mike I think the only way costs would come down is if the marine surveyor worked for the insurance company. That would be a sweet job, paid holidays, superanuation and all expenses covered.
Cheers

Indeed, maybe that would happen. Might create some good jobs with good pay and benefits. Unfortunately with full time employees they’d need far fewer surveyors overall.

[Fore and Aft]

This is the whole problem Mike, you tell the client that you need to charge more becuase they now need a proper survey yet the client is like you have all the information it can't really cost anymore to put it in a proper format.
So then the client bad mouths you to anyone who listens about you overcharging them for a simple survey. (I have had it happen)
As for the insurance company I like to keep them happy as a fair bit of my work comes from insurance companys and really its just their incompetent form that is at fault. I have all information and I am not interested in helping an owner commit a potential fraud.
So Mike as much as everyone seems to dislike surveyors, some days I just want to go home and have a couple of strong rums before I start running around screaming.
Cheers