Beware! GEICO Marine Insurance for 1997 and older boats

[rmesfo]

Originally Posted by Tetepare

It says repairs...less depreciation. For my 27 yo boat That would be 70%. This merits clarification with geico. Geico sucks anyway.

My goodness! You mean Warren Buffett is a sneaky, low-life greedy scumbag who is only in it for the money? I would vote yes.

[jhulmer]

Originally Posted by gjordan

I just re-read your post and since your at your business, have you discussed with your business insurance company about adding the boat on? Marine insurance is pretty pricey and after these recent hurricanes I suspect it is going to get much worse. Just a thought. Good Luck. ____Grant.

I have my boat on stands behind my business doing a refit and contacted my business insurance broker to make sure it was covered. He said is not. So asked for a rider. He tried but could not find an underwriter willing to write me a policy.

[Dave22q]

Just got off the phone with BoatUS. They claim the depreciation clause is not new. Essentially on a boat over 28 years ond they cover total loss at agreed value but damage at a depreciated value of 10% of the reasonable cost of repair. However, on separate subsystems like electronics or the motor, depreciation is based on the date of manufacturer of the element and not the hull. Seems like keeping good records of manufacture dates may be important for those who cannot avoid this depreciation booby trap.
Thanks to Tetepare for raising this important issue.

[hpeer]

I saw this when reviewing policies. Did not fully understand and it's in my list of stuff to clarify with broker before renewing.

I agree, it's all Greek.

[Suijin]

Originally Posted by Tetepare

BoatUS insurance used to be great. If we discover they suck now with Geico (which would be no surprise to me) then we as a community quit BoatUS and maybe they'll get the message. Ship, BoatUS selling the insurance arm to Geico is like Porsche selling production to GM. Idiots. Whoever decided that would be a good idea should be fired after being drawn and quartered. Of course, "MORON" is rampant these days, case in point the Equifax disaster, lead by a CSO who has only music degrees. Welcome to the NWO.

Just to be clear, GEICO did not buy anything from BoatUS, they bought Seaworthy Insurance, which was the provider for BoatUS insurance.

You should check your policy carefully as I found that GEICO added various provisions by default, such as crew insurance. Since I single hand 999% of the time, I oped out of that which decreased my premium significantly. I just add a temporary rider when I have crew on board for any extended period.

I think there were some other default changes but I don't recall right now what they were.

[PuttingDoctor]

So being a BoatUS member and a GEICO customer I looked to both for quotes a little over two years ago. The quote from BoatUS was twice what GEICO then Seaworthy quoted. I've had a long run with GEICO without claim history except for a bicycle accident where my PIP kicked in for medical. GEICO would subrogate against the motorist who ran me off the road and bike.

When I purchased the boat even in spite of a survey GEICO would only insure to purchase price. This past July I provided $13k worth of receipts to increase my hull value. Sadly they came back with only a $7k increase. A pointed but polite email including the original survey brought back an apology and an agreed value that made me very happy.

Bottom line folks... if you have "contributing business" insurance companies are very approachable. The BoatUS markup of GEICO rates is very troubling. If you still have a car try going direct, you might be surprised.

[Colin A]

Originally Posted by Dave22q

Just got off the phone with BoatUS. They claim the depreciation clause is not new. Essentially on a boat over 28 years ond they cover total loss at agreed value but damage at a depreciated value of 10% of the reasonable cost of repair. However, on separate subsystems like electronics or the motor, depreciation is based on the date of manufacturer of the element and not the hull. Seems like keeping good records of manufacture dates may be important for those who cannot avoid this depreciation booby trap.
Thanks to Tetepare for raising this important issue.

Even on policies with out the depreciation noted in this one the often depreciate certain items. For instance many depreciate canvas, sails, running rigging, mechanical parts subject to wear (engines gen). Some companies call it out with a table or a defined amount per year other just say they will apply based on condition so it can vary from adjuster to adjuster.

[leboyd]

Originally Posted by rmesfo

My goodness! You mean Warren Buffett is a sneaky, low-life greedy scumbag who is only in it for the money? I would vote yes.

This must be the funniest thing I've read in a while...

Do you think those that have stock in the company he runs (or in any company) doesn't make money?

Do you own any stocks, bonds, mutual funds, ETFs, etc. (anything not in cash)? If so, do you want the companies to make a profit?

I'm not a P&C guy, but boats, by nature, have *a lot* of risk. The higher the risk, the more they pay out. Just look at all the payouts they'll have from Irma and Maria.

The depreciation valuation is *not* new in Geico's policies. IIRC, they used to have depreciation start at five years and you could buy a partial loss waiver (at least on the "pleasure crafts", not sure if there was a difference in "yachts"). Now, depreciation doesn't start for 20 years. I'm not sure if you can still buy the waiver.

It's not "fine print." The paragraph outlines it pretty clearly and it looks to be the same size print as the rest of the policy.

If anyone thinks all the insurance companies suck and all of them are greedy money-grabbers, there's a simple solution - competition. Start you're own insurance company and don't be greedy. Just think of all the customers you will have because all the other insurance companies suck and yours won't.

[neophytecruiser]

In the event of filing a claim, having a clear understanding of exactly what the limits of coverage are will eliminate the frustration of being "blind-sided" because the boat owners understanding of the insurance does not match what was covered in the policy. As pointed out in several of the responses, BoatsUS/Geico Insurance is not unique in this respect. IMHO, Geico has another questionable practice of defining the limits of their "coastal" coverage. In their policy it defined as including "Territorial waters". It's my understanding, for most of the coastal areas, this is a 12-mile limit. In conversation with a company representative, I attempted to confirm this limit, but it was clear from their response, they didn't know the actual distances defined by the limit of "Territorial waters" contained in the policy. Save for areas surrounding a few island groups, this limit follows a set distance from the contiguous Pacific coast shore line. Representatives should be able to clearly define these limits. For these reasons, there are clear advantages in dealing directly with underwriters who specialize in marine insurance. They are far more knowledgable and capable of both understanding the insurers needs and writing a policy which addresses these needs. The net result is both the insured and the underwriter share a common understanding of exactly what is covered, as well as the limits of the coverage.

[lancelot9898]

My take from this discussion is that it may be best to maintain a low agreed hull value if you have an old boat. As an example if you have to make repairs costing less than agreed hull value, then you will foot most of the bill due to depreciation. However once those repairs reach the agreed hull value then you will be fully covered. I wonder if I can reduce the agreed hull value?

[Wind River]

So after a lengthy call with BoatUS they assured me that I was covered for more than it appeared to me.

The depreciation would apply to items on the boat such as the engine, rigging, sails, systems etc., if they are older than 20 years.

The example loss I asked about was and uninsured boater runs into my boat at the dock and does $20k of damage to my hull, railings and teak toe rail. I was assuming that they would depreciate all of that repair (in my case) by 80% since these are part of a 35 year old boat. Not so.
The line below the depreciation calculation explanation states "In the event of damage to plywood. plastic, fiberglass, metal, cement, or other molded materials, we are obligated to pay only the reasonable cost of repairing the damaged area......".

The depreciation comes in to play on covered losses such as a rigging failure or a damaged engine. If your 28 year old standing rigging fails and the mast comes down, they will only pay the depreciated value of it, not give you a brand new mast, sails and rigging...... BUT, if you have replaced these parts and can show they are not over 20 years old, they are covered without depreciation.
If you have a leak and your 27 year old engine is flooded and needs to be replaced, they are only paying 20% of the cost of it. So you are still open to having to pay a substantial amount in this type of case unless the engine has been rebuilt and you can prove this.

They said to keep all receipts for replacement of any part of your boat as that will be your proof to not have the depreciation applied to that part or equipment.

Still not great news but much better than I first thought.

[Tessellate]

My Geico Marine policy doesn't have the same partial loss statement you have, and my boat is a 1984. It looks like you may have an older policy text which is confusingly worded. Mine (2017, issued Dec-26-2016) is much clearer.

It's basically a pretty standard policy statement, saying depreciation is applied only to inflatable dinghies, outboard motors, etc. Ie, items that depreciate anyway. It does include gel coat too, which seems a little questionable, but I guess if I had really old gelcoat and got new gelcoat as part of a repair, that would be a cosmetic improvement.

Fiberglass doesn't appear to be subject to the depreciation clause - for that they say "reasonable cost of repair" and "like kind and quality."

You might want to call your agent to find out if you have an old policy doc.

Repairs for Partial Loss
We will pay the reasonable cost of repairs with depre-
ciation applied to the repair or replacement of the
following items: inflatable dinghies, paint and finishes
protective covers, fabric or sails. Depreciation shall also
apply to outdrive units, outboard motors and gel coat
beginning with the sixth year from the year of manufacture,
and to internal machinery beginning with the eleventh year
from the year of manufacture. In the event of damage
to plywood, plastic, fiberglass, metal, cement, or other
molded material, we are obligated to pay only the
reasonable cost of repairing the damaged area, in
accordance with quality marine repair practice. We have the
option to make or reimburse you for repairs or replacements,
or to pay you directly based on an agreed estimate of loss.
Repairs and replacements will be made with like kind and
quality.

[PuttingDoctor]

Originally Posted by lancelot9898

My take from this discussion is that it may be best to maintain a low agreed hull value if you have an old boat. As an example if you have to make repairs costing less than agreed hull value, then you will foot most of the bill due to depreciation. However once those repairs reach the agreed hull value then you will be fully covered. I wonder if I can reduce the agreed hull value?

But then if you have a complete loss you're under insured! The value of my agreed coverage now at $82k for a 1987 Irwin is about right where I want it to be. I would have to put up with all the nickel and dime deductions but I would at least have enough to replace her.

BTW the increase from 59k to 82k was $200 in annual premium. The Bahamas rider actually reduced the premium much to the surprise of even the GEICO rep I had the pleasure to work with last spring as I prepared for 2 months in the Abacos.

[Tillerjockey]

A little off topic here. I'm thinking of buying a 1966 Allied Seabreeze for about $25,000. I was discussing with the seller the need for me to get a survey before I could get insurance. He said that Boat US would insure without a survey. I thought he was making that up, but I asked Boat US for an insurance quote which they gave me one without a survey !! I was amazed and appalled. And they keep hounding me to sign up. I guess if they are not going to pay anything for a claim, any money they get is just money in the bank for them.

[Tetepare]

Mine insurance contract with Geico (which I quoted from previously) is one month old.

Here is Geico's written response (bold):

If my boat is undeniably a total loss, how much will Geico pay? You have an agreed hull value policy, so if you have a total loss GEICO will pay the insured value of $40000 ( no deductible/ no depreciation)

What is the depreciation calculated against? The parts and materials ( not including labor)

What is the depreciation on my boat? Currently since your boat is 7 years past the 20th year of manufacturer, your depreciation would be 70%, however, the maximum depreciation is 80%. Claims does take into consideration the year and repair schedule of the part as well.

If my boat were to suffer $10,000 in damages, how much would Geico pay? We are unable to answer this hypothetical question without knowing the damages, what parts, etc. Claims looks at many factors when calculating the depreciation on a partial loss.

Back to my comments.

I have never changed the agreed value, part due to being lazy, part because of the fine condition of my vessel. The agreed value is $40,000. Actual market selling price is about $24,000.

Given that Geico discounts (I'm going to call it 80% because it'll be 80% in a few months) any repairs, that means for $10,000 in damage Geico would only pay out $2,000.

If the boat requires repair equal to the value of the boat, , I'm out a $24,000 boat for which Geico could claim as repairable and only cost Geico $4,800.

Since the agreed value is $40,000, technically I could have it repaired up to that value, meaning that Geico would pay only $8,000.

Clearly, getting Geico to claim a total loss would be very difficult unless the boat is a pile of molten plastic.