How often is your insurer requesting a survey

[wesevans]

Every 5 years

[boatpoker]

Originally Posted by Mike OReilly

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.

So you don't object to paying for it, you just want to have it amortized

[Orion Jim]

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”.

I am completing my 12th year with an agreed value policy through the same insurer. My agreed value has remained the same and I’ve never had a claim against the policy. I provided a survey, when I first got the policy, which had been done less than two years prior, by the previous owner.
I have never been asked to have a subsequent survey completed. I appears I have been the exception to the norm.

[Painless]

Originally Posted by Mike OReilly

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

If you paid (to use your numbers) 200K for a boat and it was insured for 200K, the loss to the insurance company is 200k but YOU are just getting your money back to replace the boat.
If you bought a boat for 25K and then got a 200K payoff there is some incentive to repeat the process.

[NYSail]

With my prior boat of 10 years I was never asked. So far year two with new boat and no request for one.

Greg

[Mike OReilly]

Originally Posted by boatpoker

So you don't object to paying for it, you just want to have it amortized

People deserve to be paid for their work. That’s not the issue.

I mostly object to the PITA factor of having to manage a service that should be managed by the insurer. They are the ones that want this, not me. I’m perfectly willing to work with them, but since they say they need it so they can give me a quote on their service, then it follows they should manage and pay for it.

I don’t see why this is a radical expectation. Most other businesses operate this way. And there are plenty of benefits to doing as I say, not least of which are likely lower overall cost, and improved quality of surveys.

[valhalla360]

Originally Posted by Mike OReilly

The whole survey system boils my britches. A survey is being demanded by the insurance company so they can assess their risk, and it price accordingly. It’s their tool, so why aren’t they managing and paying for it?

You will pay for it one way or the other.

But if you have them manage it...expect to pay for the guy managing the process and expect them not to shop around. If haul out is not convenient for you...too bad...and in the end, they are are simply going to increase your premiums to cover all these costs.

[valhalla360]

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.

Because, people will go out buy a boat that would normally be worth $200k but is in bad shape and really worth $50k...then they "let" it sink and ask for $200k and because there is no survey, the insurance company has to pay.

The risk was really drastically higher because of the hidden incentive for fraud and it will cost the insurance company.

[valhalla360]

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.

We had a discussion about risk on a recent thread...do you really think the "Risk" is the same for both boats? Especially since it would be crazy for a guy to buy 10 times the insurance...unless he's planning some insurance fraud.

But even if the guy isn't planning fraud a decrepit boat with old corroded thru hulls, a wonky engine and sails ready to shred in a stiff breeze...is a far greater risk than the same boat in good condition...the survey helps the insurance company account for these differences.

I think boatpoker is right. I used to know a guy (friend of a friend thing) who got a new bass boat every 2nd or 3rd year because from the insurance company because it would sink. The solution after the 4th or 5th boat was they paid out but stopped issuing him insurance...so he moved on to another insurance company.

[Mike OReilly]

Val, I’ll just let you catch up before commenting .

[valhalla360]

Originally Posted by Mike OReilly

Val, I’ll just let you catch up before commenting .

Are you talking about the other thread? I think I am caught up on this one.

The risk to the insurance company is drastically different insuring a piece of junk for 10 times it's worth vs the same model in good condition, so the premiums don't reflect the same level of risk (with or without the major incentive for fraud).

Likewise, having the insurance company mandate when, where and how the survey is conducted...just means higher premiums to cover the cost of a survey program and more hassle as I can't shop around and do it at my convenience.

[Mike OReilly]

Originally Posted by valhalla360

Are you talking about the other thread? I think I am caught up on this one.

The risk to the insurance company is drastically different insuring a piece of junk for 10 times it's worth vs the same model in good condition, so the premiums don't reflect the same level of risk (with or without the major incentive for fraud).

Likewise, having the insurance company mandate when, where and how the survey is conducted...just means higher premiums to cover the cost of a survey program and more hassle as I can't shop around and do it at my convenience.

It’s just that I thought we moved past that point (MS and I). I accept the concern about fraud. I said so. And I also accept his data that 80% of claims are fraudulent. I remain dubious, but he is the expert, not I.

Given that I point out that unless you ascribe higher ethical behaviour to corporations vs individuals, you have to assume 80% of the insurance company transactions are also fraudulent. This should not encourage anyone to be any part of this system...

But the core point I’m raising is the way survey’s are foisted upon boat owners when it should be the companies that manage them. They want them. It’s their tool, not the boat owners, so they should manage and pay for them.

Of course this becomes a cost of doing business. That’s fine. Pass the cost on. I think there is good reason to think this will reduce cost and improve the actual survey’s produced.

[Moody46CC]

I do not think we have heard from any underwriters so far. It would be interesting to hear their side of this issue.

There are checks and balances to the possibility of fraud. Anyone buying a boat has to get a bill of sale--the tax authorities as well as registration authorities are rather stringent on this, and the insurance company wants to see that as part of the paperwork to ascertain the ownership of the vessel. Someone is going to raise questions if you have a bill of sale for 20K and want to insure it for 200K. I don't think an insurance company would insure a boat for 200K in such circumstances without seeing a survey. A hell of a survey! Granted, that could be falsified, but then it certainly is a case of fraud then. At the same time, most people buying a $200K vessel are likely to need a loan, and any loan I have had always wants the item purchased (boat, house, car) as collateral and it MUST be insured for at least the bank's interest (the value of the loan). And that is always right there on the insurance policy. My current policy says, "LOSS, IF ANY, UNDER SECTION A OF THIS POLICY SHALL BE PAYABLE TO THE INSURED AND ... " and next listed is the bank. My bank insists on getting a copy of that document from the insurance company every year.

If you under-insure the bank's interest in the collateral, the bank will make you increase the insurance policy or happily buy one for you at their favorite company often at a much higher premium after giving you due warning, and you legally have no recourse. If you over value the collateral, the bank does not care, but again, someone going over the bank's interest might well wonder (and do something) in seeing their 20K interest insured for 10 times as much. Checks and balances do not always work as we know from government, but everything helps.

As the fellow who had done a lot of insurance assignments noted, the insurance companies get very persnickety about paying out large sums. They are aware that what you pay for a boat today is not what it is worth five years from now owing to depreciation and market conditions. Of course, you want insured what you actually did pay, and with an agreed value policy, you pay extra for that as factored into the premium. That is a fair transaction. What from the insurer's perspective is unfair is fraudulent over-valuation and owners who fail to keep the boat seaworthy, increasing substantially the chance of loss.

I can see why the insurance company might want a survey periodically concerning condition which of course is a factor along with the market in valuation. Yes, the survey system has its faults as pointed out in this thread, but we don't have an adequate substitute.

What I would like to see is some industry-wide standard established for the frequency of a survey after purchase. Age, location, range of navigation, all those would factor in. And owners would know one is coming and can perhaps schedule it in connection with routine maintenance, saving at least the cost of the haul out.

[EngNate]

Beacon, my insurer, wants a survey every 6 years. 5 seems to be the average. I've heard of 4 year intervals but not 3 up to now. There seems to be a lot of variations between different underwriters. I know of a DIY survey that was accepted, and another where it was done by the shipyard manager, in both cases basically checking off items on a questionaire and taking a few photos.

[hpeer]

Originally Posted by 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.

Every time I get a survey the surveyor asks me “So how much do you want me to say the value is?” I’ve had this from several surveyors. Obviously not verbatium, but close enough.

If you are surveying a common boat then it’s pretty easy to come up with an approximate value off of Yachtworld. If you have a rather unique or unusual boat then not so easy at all. Not saying what you do, but what I have experienced.