Insurance

[Mike1956]

Looking for new insurance for my yacht and have read the information from 2 insurers and both make clear in the event of a total loss they reserve the right instead of a cash payout to provide a replacement yacht which apparently may not be similar to to the one lost. I wrote to one of the insurers about this condition and received no reply. Perhaps all policies have this condition.

Mike

[Telesail]

I don’t have that condition in my Pantaenius policy. Not sure how that would work in any case unless there is some qualification of how ‘not-similar’ it can be. Could they provide a different draft, length, beam, air draft, number of cabins etc?

[Paul L]

Can you cut and paste tge clauses here? Sounds odd.

[Pelican_38]

That sounds odd and problematic in a number of areas. I've not seen that term but have only had 3 different carriers.

[Mike1956]

Originally Posted by Paul L

Can you cut and paste tge clauses here? Sounds odd.

Unable to cut and paste so copied the condition here

"Insurers may, at their option repair or replace with property of similar age, type and condition all or any part of the vessel or property lost, damaged or destroyed instead of paying the amount of the loss or damage in money".

This is from one insurer, the other has a very similar clause.

I made enquiries to both and one did not reply and the other said it would be a matter of negotiation between me and the insurer and went on to say there has never been a case when a vessel has been replaced under that clause.

Mike

[valhalla360]

Originally Posted by Mike1956

Unable to cut and paste so copied the condition here

"Insurers may, at their option repair or replace with property of similar age, type and condition all or any part of the vessel or property lost, damaged or destroyed instead of paying the amount of the loss or damage in money".

This is from one insurer, the other has a very similar clause.

I made enquiries to both and one did not reply and the other said it would be a matter of negotiation between me and the insurer and went on to say there has never been a case when a vessel has been replaced under that clause.

Mike

I think you are reading more into this than what is there and is intended. While it's not clearly written, I believe they are talking about repair and replacement parts but kept it vague and wide ranging to keep options open.

So if another boater hits your davits, they have the option to simply install the same brand/model of davits rather than give you cash. And really, you wouldn't have much to complain about in this scenario. But in practice, the time for them to source and pay to install and then hassle over is the same model 2yrs newer lower quality due to manufacturer changes to the model....they just write a check and tell you to sort it out.

If you applied it to the entire boat, the caviots about age, type, condition, etc... would make it pretty much impossible to get agreement if the owner decided to hassle the insurance company over the proposed replacement...simply not worth the trouble.

That said, certainly get the company to confirm (in writing) what is the intent in terms of a total loss.

[S/V Adeline]

Auto policy usually has similar clause. I was rear ended in a vehicle I custom ordered and had only had less than two weeks, insurance replaced all parts with remanufactured items (fits the clause)

[valhalla360]

Originally Posted by S/V Adeline

Auto policy usually has similar clause. I was rear ended in a vehicle I custom ordered and had only had less than two weeks, insurance replaced all parts with remanufactured items (fits the clause)

Yeah but wildly different finding a rear quarter panel for 3 different suppliers for one of the 200,000 camerys built in 2012 vs a custom arch on a boat with a production run of 10.

Yeah, if a pump is damaged they can give you one that meets the same specs from a different manufacturer but they aren't going to swap your 45 ft lagoon with a 45 ft catalina.

[S/V Adeline]

Originally Posted by valhalla360

Yeah but wildly different finding a rear quarter panel for 3 different suppliers for one of the 200,000 camerys built in 2012 vs a custom arch on a boat with a production run of 10.

Yeah, if a pump is damaged they can give you one that meets the same specs from a different manufacturer but they aren't going to swap your 45 ft lagoon with a 45 ft catalina.

But the intent behind the clause is the same. It allows the insurance company to decide the cheapest option available to service the claim.

[valhalla360]

Originally Posted by S/V Adeline

But the intent behind the clause is the same. It allows the insurance company to decide the cheapest option available to service the claim.

Sure but in the context of the OPs question...no they can just provide a random replacement boat of similar size in the event of a total loss. Even one of the same model likely wouldn't meet the standard unless they outfit it identically.

That's far different from using an aftermarket quarter panel on a car that is indistinguishable from the OEM part.

[S/V Adeline]

Originally Posted by valhalla360

Sure but in the context of the OPs question...no they can just provide a random replacement boat of similar size in the event of a total loss. Even one of the same model likely wouldn't meet the standard unless they outfit it identically.

That's far different from using an aftermarket quarter panel on a car that is indistinguishable from the OEM part.

1, aftermarket body parts are easy to distinguish from factory, and are worth less. Vin#
2, I highly doubt you would ever see this clause used but it is possible, and the intent is to save insurance companies money. I have seen it used in the automotive field with replacement policies. If your boat is worth $100k, by insurance, and they are aware of a similar or identical rigged boat valued the same but they can acquire it for $60k, they will try every attempt to exercise that clause. Never witnessed it with a boat but I have with autos.

[valhalla360]

Originally Posted by S/V Adeline

1, aftermarket body parts are easy to distinguish from factory, and are worth less. Vin#
2, I highly doubt you would ever see this clause used but it is possible, and the intent is to save insurance companies money. I have seen it used in the automotive field with replacement policies. If your boat is worth $100k, by insurance, and they are aware of a similar or identical rigged boat valued the same but they can acquire it for $60k, they will try every attempt to exercise that clause. Never witnessed it with a boat but I have with autos.

1 After market parts are cheaper to buy...but essentially the same. Just walking thru the parking lot, your average owner won't be able to tell the difference and it won't impact the resale value.
2 Finding an identical rigged boat is why it's a non-issue in a boat policy. You simply won't find such a thing in the real world.

[S/V Adeline]

Originally Posted by valhalla360

1 After market parts are cheaper to buy...but essentially the same. Just walking thru the parking lot, your average owner won't be able to tell the difference and it won't impact the resale value.
2 Finding an identical rigged boat is why it's a non-issue in a boat policy. You simply won't find such a thing in the real world.

Clause does not specify identical, states similar. The more money there is to be saved the more likely the insurance company will push it. Can lead to arbitration if neither side compromises.
As for autos, guess you have never had to explain to DOT and insurance why the vin# of your hood and fenders doesn't match the frame. Average owner might not notice but be sure the average trade-in or insurance evaluator is looking for the signs. I replaced the "front clip", = both fenders and hood, since those vin# do not match the frame only a rebuilt title could be issued. Value dropped by 2/3. Trying to sell it without notifying the state DOT (registration) of the replacement parts, and their vin#, is a felony.

[Paul L]

If the terms are too concerning for you, you can shop for a new for old replacement policy. It'll likely cost more. Policies that have no depreciation are often new for old.
This doesn't apply to the loss of the boat when it is an agreed value policy. In this case you get a policy stated agreed amount.