How often is your insurer requesting a survey

[Tillsbury]

Blimey, I hope mine don't ask for that. It's a 200 mile trip upwind to get to the nearest haulout.

[Mike OReilly]

Originally Posted by boatpoker

Mike: FYI SAMS is very strict about this, they do ethics courses for their surveyors and it has been reinforced at every SAMS meeting I ever attended and is mentioned in almost every SAMS newsletter I have ever seen. SAMS takes ethics very seriously to the chagrin of the odd one that has transgressed.

Originally Posted by IslandHopper

As far as i'm concerned you have not shot yourself in the foot with these statements, you have blown your whole leg off lol

Thanks Island, and really glad to hear this BP. What you describe is how I would assume any respectable surveyor would operate. It’s great to know the professional association is also supporting and enhancing high ethical standards in the industry. I certainly don’t think this one bad example that we’ve seen here is representative of the whole industry. But it does give me pause for any future surveys I may contract.

[Fore and Aft]

Mike have you been following the thread “Brit sailor sinks cat new bride missing”? If that boat had been recently surveyed the surveyor could help convict/exonerate Bennet. But your way of thinking Mike I am supposed to stay quiet and say nothing? Hindering a murder investigation carries a 7 year jail term here in Australia so there is no way I would be keeping quiet.
Another time I discuss the owners boat is when a skipper has been employed to do a delivery. Often they will just touch base with me to make the survey did not uncover any surprises and the boat is safe to move. I know a few delivery skippers so I am not going to watch a friend potentially drown because the boat is unsafe and should not leave the marina.
You asked who I am? I trade under the Name Fore and Aft Surveyors and work out of Tin Can Bay and Hervey Bay Queensland Australia. Feel free Mike to tell everyone not to get me to survey their boat if they are going to use their boat to commit a crime or potentially drown someone. That’s the sort business I can do without.
A clear conscience is far more valuable than money.
Cheers

[valhalla360]

Originally Posted by Mike OReilly

You’re funny Val. Any other numbers and suppositions you want to pull out of the air?

Show me the data that supports your 10%, your 90% and your assumption that lesser value boats are riskier boats.

I wasn't suggesting these were exact numbers but demonstrating a principal.

Or are you suggesting:
- People happily pay for 10 times the coverage for no reason?
- An identical make/model of boat worth 1/10th is on average just as reliable and seaworthy as one in top condition?

The further you get away from legitimate values, the more likely the payouts will be higher relative to the insured value. By the time you get to 10 times the legitimate value, I would expect the risks to be drastically higher....insert the exact percentage you think reasonable.

[Trimaran Ken]

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.

I don't think you understand how insurance and insurance companies work.

They need to know the risk involved and the value of the boat. A boat in poor condition has much less value and much higher risk.

Human nature dictates that it is a bad idea to insure a boat for more than it is actually worth. It encourages bad behavior.

Yes, they could consider a survey a cost of doing business, but that would just mean that the premium would go up to cover the survey. At least this way, you have some control over the process.

Insurance companies need to make money, otherwise why be in business?

Insurance companies need to manage risks. With better information about your boat, they are better able to assess the risk.

[Buzzman]

Originally Posted by Trimaran Ken

.... A boat in poor condition has much less value and much higher risk.

Human nature dictates that it is a bad idea to insure a boat for more than it is actually worth. It encourages bad behavior.

Actually, it is "human nature" to want to insure a boat / car / house for more than it is 'worth' at the time the policy is taken out. In the event anything major occurs the insured is more likely to be covered for 'full replacement cost'.

Individual humans will very seldom choose to under-insure an item, arguing for 'full replacement cost' (except perhaps where doing so makes the premium unaffordable....).

In fact, it's usuallyhte insurer insisting on insuring for higher cost (so as to increase their premium) but also to ensure the insured gets full value and no court case after a claim. It's usually cheaper to payout than fight (as others have noted up thread).

This is also why "agreed value" policy premiums are higher than "market value" policy premiums - because the insurer gets to decide what constitutes "market value".

In the case Valhalla described of the good boat and the dodgy boat both being insured for $200K (yet only one of them being worth anything like that) the insurance company could get stiffed for the $200K if the dodgy boat was 'lost at sea', as in sank in deep water and unrecoverable. No evidence of condition prior to sinking. Therefore no real chance for the insurer to contest the claim.

It is this sort of 'potential fraud' that the marine survey seeks to avoid.

By having the survey regularly, the insurer has a much clearer idea of the boat's ongoing condition and thus the potential risk profile.

Compare it with vehicles that are inspected annually for a 'roadworthy' (as they are in most places). If the vehicle passes its annual roadworthy, and is 'registered' for road use, that gives the insurer some clue as to their risk.

Vehicles off the road are harder to assess, as someone has to physically sight the vehicle (as for a boat survey) in order to assess its condition in order to establish the risk profile.

So without the survey system, probably more unscrupulous owners would be over-insuring dodgy vessels and sinking them to claim the insurance.

If this were to happen then ALL boat premiums would be forced to rise as the insurance industry would have to increase its risk profile to 'average out' the rise in fraudulent claims.

On the flip side, I recently had to re-insure my classic car, which the insurer did without seeing a current registration inspection or rego doument - on a full comprehensive policy.

Which they probably shouldn't have done, as when I took the car to the mechanic for the annual inspection, he wouldn't pass it till I did $500 work on the brakes (aged flex hoses and machining of drums).

So had I been dishonest I could have rammed a truck and claimed the full payout - on a car which they *insisted* on valuing at a few grand more than I actually paid.

It's a murky world out there.....

Needless to say, my ethics dictated repairing the brakes, not ripping off the insurer. Besides, I kinda like the car....

[Trimaran Ken]

Originally Posted by Buzzman

It is this sort of 'potential fraud' that the marine survey seeks to avoid.

By having the survey regularly, the insurer has a much clearer idea of the boat's ongoing condition and thus the potential risk profile.

This is the point I was trying to make, which you did a better job of than I did.

[Fairytale]

Originally Posted by Mike OReilly

We’ve now gone seven years with our current insurance provider, but they are now demanding a survey for the coming season. They say they want one every five years, but we’ve never had a claim, so maybe that gives them more leeway. Anyway, it’s prompting for me to shop around.



I would walk away from a company that demanded a survey every three years. Five still seems to be the standard.



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?



The cost of a survey is no small thing. It’s out of the water, on top of actual survey costs, there are also the fees associated with haul out. And then there are the additional logistical costs of finding and arranging for the surveyor.



I bet the whole survey PITA system is what drives some to go uninsured.

If the insurance companies provided the surveys, the premium increases for their policies. And why should they be out of pocket for a boat that doesn’t pass?

Just a part of boat ownership...but yes, a PITA

[Fairytale]

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.



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.

Soooo true!! I did property & casualty insurance for over 10 years. 99% of claims were paid more than fairly. Fraud was huge, sometimes big, sometimes small.

I have insurance policies myself and pay big premiums as well. It makes no monetary sense for the companies to provide the surveys, it would just mean even justifiably higher premiums. But I am surprised that companies accept almost any survey. When I wrote high dollar jewelry policies, anything over 10k required a GIA certified appraisal, a GIA cert wasn’t easy to come by like many boat surveyor credentials.

[secrabtree]

Originally Posted by Tillsbury

Blimey, I hope mine don't ask for that. It's a 200 mile trip upwind to get to the nearest haulout.

"is rhe glass half full or half empty?" It is a downwind sail with a clean bottom after the haulout. People used to as me why I turned right, into the wind, when I left San Francisco Bay on a day sail, My answer was "I'd rather sail upwind when I'm fresh and the morning wind is a little lighter, and return relaxing with a glorious downwind sail in the stronger afternoon winds. Going or coming, one way will be upwind. Get it over with before I'm tired."

[lovinlifebda]

Just giving an update to my thread. Changed brokers and as a result changed underwriters. I would consider my new policy to be a considerable improvement over the previous with one exception which I can live with. The broker has let me know that the normal survey interval will now be 7 or 8 years, not the 3 years that prompted this thread.

We are in the Eastern Caribbean and spend hurricane season in Grenada. The one new thing in our policy which is not as good is that we have to be in a marina or hauled out for a “windstorm”. They define windstorm as any wind event that has been given a number or name. At anchor we have no coverage for a numbered storm or named hurricane and we live on our anchor. So, we could go into a marina or take our own precautions.

The broker indicated that he suspects this will become very prevalent for the Caribbean in the next few years. For us this is workable, we have a hurricane hole to go into for a numbered storm and take our chances, we will not face off against a hurricane, Trinidad is only a night sail(or motor) away. Heading to Trinidad for a hurricane has not been driven by this new policy, it has always been our plan.

Two major improvements from last policy. Old policy we had to be below 12 degrees 40 minutes for hurricane season or we had no coverage at all. New policy allows us to be wherever we want year round and still have coverage for all perils except named storms. Have to be below 12.5 for named storm coverage during hurricane season. Old policy, all our equipment was devalued each year to a minimum value of 20% of new. Meaning if we had a claim needing parts replacement there is a good chance all we would get is 20% of the replacement value after deductible. I considered the old plan to be only really viable for a total boat loss. The new plan does not devalue parts, they will replace with new if required.

It certainly seems that the new reality for boat insurance is picking your poison. Each person will have different things that are important depending on your location and how you use your boat.

Jim