Stated Value Insurance

[sailorboy1]

Is stated value insurance really the stated value? Or is this number the insurance uses to start at before they start subtracting for stuff?

For example stated value is $SU. Boat burns up and sinks. The insurances pays:

1 - $SU

2 - $SU minus $rx for rigging age, minus, $ex for electronic age, minus $sx for sail age ..........

[apirate]

Our experience was that it paid full stated value for a total loss. That being said, what’s in the specific policy language that counts.

We were insured by Concept Special Risks through Hugo Hanham in that case.

[GordMay]

2

Agreed value (sometimes referred to as “guaranteed value”) is an amount you and your insurance company agree a specified item is worth. Unlike most other coverages, if an item is covered at agreed value, you are guaranteed to receive the full amount stated in the policy in the event of a loss. With agreed value coverage, the insured value of your property doesn’t depreciate, at least not over the course of your policy term.

Stated value is commonly mistaken for agreed value, though the two vary dramatically in the extent of their coverage.
Most commonly used to provide insurance coverage for classic cars, an item’s stated value is determined by the individual, not the insurance company. While you may even have to provide documentation proving such a value, your insurance company will not necessarily pay this amount in full should you suffer a loss. The insurance company can choose to pay you either the Stated Value or the Actual Cash Value, whichever is less.
Check your policy for the clause:
"In the event of theft or a total loss we will pay the Stated Value or the Actual Cash Value, whichever is less."

[sailorboy1]

So ........ Stated Value is the value your insurance co charges you for, but may pay less? What point for an owner is that?

[GordMay]

Originally Posted by sailorboy1

So ........ Stated Value is the value your insurance co charges you for, but may pay less? What point for an owner is that?

To save money, and still have 'some' insurance.
Stated value insurance is for reducing your premium cost, not increasing your coverage. You insure for the value, for which you can afford the premiums, and assume the differential risk, yourself.

[valhalla360]

Originally Posted by sailorboy1

So ........ Stated Value is the value your insurance co charges you for, but may pay less? What point for an owner is that?

Utimately, the point for the owner is to be a smart consumer and understand what they are buying. Relying on the insurance company to sell you the product that costs you the least while offering the biggest payout is foolish.

They want you to "state" a reasonable value and then it's unlikely to be an issue. Typically, you pay a bit less as most people will overstate the value by a little (10-20%) so the upper limit doesn't factor in...or they mistakenly think it will get them a big payout.

The stated value is used to determine the premium. If you state the value is $500k, they plug that in and determine the premium based on the risk of a $500k payout...possibly without the cost and complication of a independent assessment of value. For the insurance company, it sets the upper limit of what they are responsible for but they are only responsible for the real value.

It would be silly for an owner to state $500k on a $100k boat but the insurance company wouldn't really care...when there is a claim, the adjuster will come up with a number somewhere in the vicinity of $100k.

With an agreed value policy, they will often require an independent assessment of the value and no they won't issue a $500k policy on a $100k boat because that could encourage insurance fraud.

Agreed value policies are popular with things like classic cars. The NADA value for a 30yr old car is likely something like $2k but if it's a popular model that has been fully restored may be worth $50k. With agreed value, you can get an independent assessment (by an insurance approved person) to help the insurance company to justify the unusually high value.

[sailorboy1]

So lets apply “agreed value” to the question in post one. Will they acturally that out or use it to start deducting from?

Ands lets not start saying how people need to be “smart”. I defly the vast majority of us to be able able to full understand the 15 pages of “terms” that come with our insurance policy.

[GordMay]

“Agreed value” insurance is not that commonly available, but, if you can get it, they pay out the full value (as mutually agreed) on a complete loss.
➥ https://www.cruisersforum.com/forums...ml#post3264838

[valhalla360]

Originally Posted by sailorboy1

So lets apply “agreed value” to the question in post one. Will they acturally that out or use it to start deducting from?

Ands lets not start saying how people need to be “smart”. I defly the vast majority of us to be able able to full understand the 15 pages of “terms” that come with our insurance policy.

If it's a total loss, yes but as with most things there are complications.

They do still have the option to pay for repairs if that is cheaper and unless you've included and paid for special policy terms, they will use industry standard practices...so going back to a classic cars as an example, if there is an aftermarket fender available and you didn't pay extra specifically to get OEM parts...they will offer after market parts (which is death to classic car values). An example on a boat may be a replacement winch...if they can get an equivalent rated winch cheaper and you don't like the brand... they don't have to pay for a more expensive option or you would have to prove that it's not functionally equivalent.

This also assumes no fraud or attempts at trickery. If the agreed value is fairly close to what general market is, they are unlikely to fight you over it. It's simply not worth the cost of their adjusters and lawyers time when they would likely lose if it went to court. If there is a large discrepancy between the agreed value and the market, they may hold things up a bit to check for fraud or trickery...They probably will still pay out but if they find your buddy was the surveyor and the value of $500k that he assigned on your $100k boat is unsupported, expect the insurance company to put the brakes on and you will have a fight.

You can defy all you want but you sign the Contract, you live with the terms and it's on you if you didn't understand the terms. Don't read them at your own risk. If there is something you don't understand, ask for clarification (and get the answer in writing).

PS: If you renew over multiple years without a new value assessment, do check that they don't have a depreciation clause...but that goes back to you have to read the Contract.

[dhenline]

in the airplane world most insurance is based on a declared or stated value. I tell the insurance company how much my plane is worth and they tell me the premium for that "hull value". if the plane is a total loss, they pay me the "hull value" that I insured. I personally did not know anyone who overstated their "hull value" on purpose. The main driver of the insurance premium was the hull value.

[Scott Berg]

Al Golden of IMIS has a series of free webinars that SSCA used to host on marine insurance that were wonderful. Highly recommended; he was a longtime cruiser who started a marine agency because of the mess he found when cruising. Not sure if it's still available. Disclaimer, I am a client but have no financial interest (I pay them); have had great claim service and support. https://ssca.org/content.aspx?page_i...&item_id=55001

[redneckrob]

Originally Posted by dhenline

in the airplane world most insurance is based on a declared or stated value. I tell the insurance company how much my plane is worth and they tell me the premium for that "hull value". if the plane is a total loss, they pay me the "hull value" that I insured. I personally did not know anyone who overstated their "hull value" on purpose. The main driver of the insurance premium was the hull value.

The airplane insurance market is very different. It's far more likely in an aircraft mishap that the aircraft will be unrepairable than for boats. Also far more likely that the condition of all the important parts of the aircraft will be up to an FAA standard and maintenance was done exactly when and as required. Boats, not so much on any of that.

That said, my experience is that the liability portion is a much bigger part of an aircraft insurance policy than it is a boat policy, when talking about relatively new aircraft/boats of similar value.

[goboatingnow]

Originally Posted by GordMay

“Agreed value” insurance is not that commonly available, but, if you can get it, they pay out the full value (as mutually agreed) on a complete loss.
➥ https://www.cruisersforum.com/forums...ml#post3264838

Pantaenius , is generally as standard , agreed value