Urgent insurance problem

[Jolly Roger]

I need to find another insurance company quickly, that will take my 1977 50-foot schooner. I renewed the policy a month ago with Progressive, who I have been with for five years with no claims. Last week they sent me a cancellation notice, effective this coming Friday, because “The insured value is more than the market value.” Which they agreed in writing in the new policy by the way.
I am trying to sort it out, but I’m not hopeful, so I need a backup plan.

[Tortuga's Lie]

Unfortunately, insuring an older boat has become more and more of a challenge and having a new insurance and valuation survey is almost mandatory now. I am in a similar situation with Geico and solved it temporarily by getting a policy from Erie Insurance. I say temporary because this policy is lacking in one major way, there is no coverage for environmental spills, which I thought was mandatory for insurers to offer, but I guess not. I talked at length to the Erie representative and he made some inquiries as well but they apparently do not offer this coverage. The rest of the policy is pretty standard and does offer good protection otherwise, but the spill coverage is pretty major so, my Erie coverage is basically a stop-gap policy until I haul the boat where I can get a new survey and therefore a new, better policy.
Erie did not require a survey at the time of my policy, which was a year ago.

[Shrew]

Personally, I try to avoid single line vendors. (e.g. Progressive, Geico, etc). I'd prefer using an independent agent that reps many underwriters. I also prefer to find agents that carry marine specific insurance, rather than a company that insures houses, cars, RV's as well. Often neither the agent or even the underwriter completely understands large boat policies when all they do is cars and houses all day.

Here is who I use, however there are many others out there.

https://maritimeinsuranceinternational.com/

I have a policy with Berkley Marine. While they do write policies for cars and houses, the Marine division is exclusively boating and marine related.

[valhalla360]

Originally Posted by Jolly Roger

I need to find another insurance company quickly, that will take my 1977 50-foot schooner. I renewed the policy a month ago with Progressive, who I have been with for five years with no claims. Last week they sent me a cancellation notice, effective this coming Friday, because “The insured value is more than the market value.” Which they agreed in writing in the new policy by the way.
I am trying to sort it out, but I’m not hopeful, so I need a backup plan.

Can you reduce the "insured value" (do you mean "agreed value") to match the "market value"?

Sure they agreed to it in writing but I'm guessing someone checked and it was wildly out of line with the market, so they notified you in writing that they aren't going to continue to take an out of line risk.

You have an older unusual boat. The value they assign it is likely to be on the low end as they don't have good comparable examples on the market. A survey with market value assessment might help or they might keep pushing back as unusual boats have highly variable values.

If it's not an "agreed value" policy, be careful as they may decide it's only worth very little if you put in a claim. You don't want them to total your boat and hand you a $5k check because that's what they claim it's worth.

[Jolly Roger]

Their exact reason is: “The 1977 Downeast schooner has a market value listed that exceeds current market values for that/model”
I accepted a reduced value by $25,000 in the new policy, which I then paid for and received the documents from Progressive in May.
I had what I thought was a valid insurance on my boat until next year—with an agreed value. There is also no mention of a survey in that policy terms.
What they are now saying is an ultimatum, to accept a figure which is nearly half of what is agreed in that policy.
These replies are indeed depressing. Are we all deluding ourselves, paying thousands to these companies, on the remote chance of being reimbursed in the event of a claim, then being unable to get re-insured because we made one?

[Tortuga's Lie]

Originally Posted by Jolly Roger

Their exact reason is: “The 1977 Downeast schooner has a market value listed that exceeds current market values for that/model”
I accepted a reduced value by $25,000 in the new policy, which I then paid for and received the documents from Progressive in May.
I had what I thought was a valid insurance on my boat until next year—with an agreed value. There is also no mention of a survey in that policy terms.
What they are now saying is an ultimatum, to accept a figure which is nearly half of what is agreed in that policy.
These replies are indeed depressing. Are we all deluding ourselves, paying thousands to these companies, on the remote chance of being reimbursed in the event of a claim, then being unable to get re-insured because we made one?

One does think that it's all a gamble, on the chance that they will cover you without a major battle. I am half way thinking of getting a liability only policy and self-insuring the boat. In 30 years of sailing, I have never had a claim. Just think of the investment portfolio I would have if I had taken the thousands of dollars and invested it all over the 30 years

[valhalla360]

Sounds like someone at the insurance company caught that the "agreed value" was wildly higher than the market value and is correcting the situation.

Assuming they give you a reasonable prorated refund on the premiums and time to find an alternative (not their problem if no one is willing to issue a policy for wildly more than the market value), it's tough but they haven't done anything nefarious.

Options:
- Run the numbers and decide if the market value policy is worth while. It won't give you what you think the boat is worth but it's something.
- If you can afford to self insure for the hull value, that's an option and just go with liability insurance.
- You can try to get a policy for drastically above market value but it's going to be a tough sell if you are honest with the insurance company. (if you are not honest, don't be shocked if they deny a claim).

This is one of the downsides of keeping an older unusual design in top condition. Insurance is built around developing an estimate of risk and that's difficult for an unusual item. If they can't get a good estimate, they tend to err on the side of a low value.

[valhalla360]

Originally Posted by Tortuga's Lie

One does think that it's all a gamble,

Of course it is. Occasionally, the gambler will win but the house makes sure the odds are in their favor, so they win in the long term.

Nothing intrinsically wrong with that. I wouldn't want to do business with an insurance company that doesn't have the odds in their favor. An insurance company that pays out more than it takes in tends to go bankrupt...which you don't want to happen just before you put in a claim.

Insurance costs more than you are going to get back on average. The reason to take out insurance is if the loss would be so great that you would have difficulty recovering financially otherwise.

[peghall]

Try contacting a true yacht insurance company...these two popped up in a google search


https://www.gowrie.com/Marine-Insura...atsYachts.aspx


https://maritimeinsuranceinternational.com/


--Peggie

[Jolly Roger]

thanks everyone.
This is all interesting, though disquieting.
I haven’t yet been told what their “new” value is—I’m waiting for that from their agent. They also haven’t said anything about refunding me for a reduced value policy.
I don’t want to get “canceled” by them, because I know you have to declare if you’ve ever been canceled when you apply to a new company.
How does self-insuring work? I’d like to know more about this, please.
JR.

[Rumrace]

Boaters co-op insurance seems so logical. If you sell shares in a company it transfers focus to share holders rather than clients. If the shareholders are the clients it changes the focus. 50-125$ a year tops

[ItDepends]

Without some numbers it is really hard to tell... but when a boat is 45 years old, unless it is a true classic, its value to the boat buying market is pretty low. Does it still makes sense to even carry hull insurance on this?

It is entertaining to read all the rants about the evil, greedy insurance companies who are cancelling our policies! If they cancel your policy, how exactly are they making ANY more money from you???? I know, let's cancel ALL our policies and get really rich!!!!

If I was an insurance company, I wouldn't insure any boat for more than market value. To do so puts that policy are very high risk for a fraudulent total loss claim.

[ItDepends]

Originally Posted by Jolly Roger

thanks everyone.
This is all interesting, though disquieting.
I haven’t yet been told what their “new” value is—I’m waiting for that from their agent. They also haven’t said anything about refunding me for a reduced value policy.
I don’t want to get “canceled” by them, because I know you have to declare if you’ve ever been canceled when you apply to a new company.
How does self-insuring work? I’d like to know more about this, please.
JR.

For hull insurance, to "self-insure" means basically you carry the risk of a loss. If your boat is lost or damaged, you eat the resulting costs. This makes sense for a lot of people, especially with older, lower value boats when loss payouts on depreciated equipment will be tiny.

Liability "sef-insurance" is a lot more complicated. You basically have to post a bond for the value of the "insurance coverage" needed. How to do this is complex, and varies from place to place. It basically makes little financial sense, outside of some very special circumstances. It's a different problem. You are insuring against a very unlikely, very expensive, event. As an example, you kill the young father in an accident that was your fault, and you are sued to recover the estimated value of his wages for the rest of his working life to support his orphans...

[Jolly Roger]

Reading these boat insurance policies is tedious. Mine is 20 pages and says: Comprehensive. The lesser of actual cash value at time of loss or $100,000.
What the heck does that mean!!
I thought about seeing a lawyer to see if the policy they gave me could somehow be upheld, but then they wouldn’t be too cooperative if I had to make a claim would they?

[ItDepends]

Originally Posted by Rumrace

Boaters co-op insurance seems so logical. If you sell shares in a company it transfers focus to share holders rather than clients. If the shareholders are the clients it changes the focus. 50-125$ a year tops

I'd love to see some real numbers to support that...

You might not realize that mutual insurance companies (such as you describe where the only shareholders are the policy holders) are actually pretty common. For example, you might not know this is the actual structure of State Farm, among many others, including some that are very big names in the industry.

NONE of whom can insure a boat for $50 a year.

I call bogus...