Insurance Company Engine Value and Labor Time

Peter T Rocco

Peter T Rocco

Member
Nov 14, 2020
52
Debary FL
Boat Info
310 Sundancer 2000 , Raymarine C120
Engines
Twin 300 HP MAG MPI Horizon V-Drive
I have SkiSafe for my boat insurance, I bought the boat at the very end of the season so there was not enough time to have a survey done before trailering it 1000 miles because the marina was closing up within the next few days and it had to be out of the water. If they would have put it in storage I would have had to winterize it and not be able to get to it before April 2021. SkiSafe was willing to write the policy without the survey but charged accordingly. I bought the policy before the transport down in case something bad happened like a semi running over it and having a pile of shredded fiberglass all over I-75 in Atlanta. One of there questions SkiSafe asked was the boats value and condition. I told them that the boat had 519 hours on both engines, was in very good condition and I placed the value at $55,000. It was the cleanest 310 DA I found used after a very long search. The boat looks like its 3 years old from top to bottom.

Well at 529 hours I hit something on the intercoastal around Ponce Inlet FL. and the damage was quoted at almost $29,000. After SkiSafe sending out a surveyor to inspect the boat and the damage they sent me a email with the claim settlement. Out of the $29,000 they want to settle the claim for $3,600. I questioned the settlement total and they explained that the port engine that is now junk has NO value because it is 20 years old and they depreciated the rest of the claim almost $14,000 because of the boats age. I paid $3000 for a one year policy so it was not cheap because the boat was in there word old and worthless.

Has anyone heard of anything like this? The seller and broker I bought the boat from thought the engines had value. I have looked everywhere and can not find anyone giving away a motor because they have no value. Used 5.7 300hp fresh water cooled motors are brining $6,000 plus with a lot more hours than I have. Where do I find these free low hour motors with free shipping?
 
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I can’t help much, but What damage do you have? Fiberglass, shaft/IO, and engine damage? Seems like the only way to get to 29k is if you have all three.
 
I'm not sure agreed value applies if the boat is damaged and not a total loss?

I have a proper yacht policy and they start depreciating the value of "parts" beyond 7 years old. I don't know how far/how fast they depreciate but I know it starts at 7 years. And I have agreed value for the boat.
 
Stee6043 said:
I'm not sure agreed value applies if the boat is damaged and not a total loss?

I have a proper yacht policy and they start depreciating the value of "parts" beyond 7 years old. I don't know how far/how fast they depreciate but I know it starts at 7 years. And I have agreed value for the boat.
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Well you need the clause which provides replacement cost. Otherwise your “insurance” is no good as the OP is finding out. You damage your running gear running aground you’ll be out quite a bit.
 
I have Geico I had a claim a few years ago depreciation on engines is standard in most policies ,you had that magical 20 year mark. I had put my claim in when my boat was under 20 years old and was also subject to depreciation on hardware ,of course the next year after I had my claim Geico changed it’s policy to no depreciation until boats are 20 years LOL ..not unheard of. The one thing insurance companies cannot negotiate on is labor. A smart boat yard that deals with insurance claims knows how to” maximize” Labor hours and rates to offset the expected depreciation of the hardware “wink” find another yard who has a good relationship with the adjusters....
 
Golfman25 said:
Well you need the clause which provides replacement cost. Otherwise your “insurance” is no good as the OP is finding out. You damage your running gear running aground you’ll be out quite a bit.
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The link you provided (which I assume is from your carrier) indicates "most agreed value policies" will pay actual cash value for partial loss, less an amount for depreciation...which is what the OP is experiencing.

Your link language on agreed value:
Agreed Amount Value policies mean you and the insurance company have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss without any deduction for depreciation. Most Agreed Amount Value policies require actual cash value on certain damaged property such as sails, protective covers, batteries, dinghies, trailers and aged outboard motors, lower drive units or outdrives.

Above that language is this definition of "actual cash value":
"Actual Cash Value policies pay for Replacement Costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the approximate market value of your vessel. A partial loss is settled by taking the total cost of the repair less a percentage for depreciation."

Are you confident you get full replacement cost on running gear with no depreciation? That's not how I read that policy language. My own "agreed value" policy, though not with United, includes the 7 year language I commented on above for partial loss...
 
Stee6043 said:
The link you provided (which I assume is from your carrier) indicates "most agreed value policies" will pay actual cash value for partial loss, less an amount for depreciation...which is what the OP is experiencing.

Your link language on agreed value:
Agreed Amount Value policies mean you and the insurance company have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss without any deduction for depreciation. Most Agreed Amount Value policies require actual cash value on certain damaged property such as sails, protective covers, batteries, dinghies, trailers and aged outboard motors, lower drive units or outdrives.

Above that language is this definition of "actual cash value":
"Actual Cash Value policies pay for Replacement Costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the approximate market value of your vessel. A partial loss is settled by taking the total cost of the repair less a percentage for depreciation."

Are you confident you get full replacement cost on running gear with no depreciation? That's not how I read that policy language. My own "agreed value" policy, though not with United, includes the 7 year language I commented on above for partial loss...
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It was early in the morning, but the sentence above the bold contradicts the one you bolded -- "Agreed Amount Value policies also replace old items for new in the event of a partial loss without any deduction for depreciation." That's what I was reading. Obviously it all depends what is written in your policy. Then looking at the chart, they show no depreciation. Maybe it's the 20 year thing.

As for confidence, I recall many conversations online where people had issues fully covered by insurance without depreciation.
 
Golfman25 said:
It was early in the morning, but the sentence above the bold contradicts the one you bolded -- "Agreed Amount Value policies also replace old items for new in the event of a partial loss without any deduction for depreciation." That's what I was reading. Obviously it all depends what is written in your policy. Then looking at the chart, they show no depreciation. Maybe it's the 20 year thing.

As for confidence, I recall many conversations online where people had issues fully covered by insurance without depreciation.
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That's how they getcha :) All of that language came from your linked policy language.

Aside from all of this exciting insurance discussion I look forward to learning more about the $29k claim that started this thread. How do you smoke an engine by hitting something and not sink the boat? Yikes...
 
Stee6043 said:
That's how they getcha :) All of that language came from your linked policy language.

Aside from all of this exciting insurance discussion I look forward to learning more about the $29k claim that started this thread. How do you smoke an engine by hitting something and not sink the boat? Yikes...
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So went and checked my policy. I get replacement value, except -- canvas, cushions, etc. after 6 years; motors, genys, and propulsion machinery after 11 years. My surprise was the age limitation (learn something new everyday). Considering the boat was 20 years old when I bot it, they get off scott free.
 
It was dropped on our boat. I was told I could add it but all I would get was equivalent value to the mechanical equipment. They said there was not much value in a used 454 with 3,200 hours on it.
 
Todd320 said:
I can’t help much, but What damage do you have? Fiberglass, shaft/IO, and engine damage? Seems like the only way to get to 29k is if you have all three.
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I bent both rudders, both prop shafts, port prop "(that's now just a hub), port shaft strut, and the port motor. The port motor ingested sea water due to the pressure coming in the exhaust causing water coming out the riser to back flow into the 1,3,5,7 bank. The sea water coming in the exhaust bent two rods and put holes in two pistons.
 
Stee6043 said:
I'm not sure agreed value applies if the boat is damaged and not a total loss?

I have a proper yacht policy and they start depreciating the value of "parts" beyond 7 years old. I don't know how far/how fast they depreciate but I know it starts at 7 years. And I have agreed value for the boat.
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I have agree value of 55k on my policy.
 
I am no insurance expert in any way, but it seems to me the damage was collision related ( you hit something ). The damage should be covered under that part of the policy. Plus the damage exceeds 50% of the agreed value, total loss comes to mind. Might be time to discuss with state Insurance Commissioner.
 
Peter T Rocco said:
I bent both rudders, both prop shafts, port prop "(that's now just a hub), port shaft strut, and the port motor. The port motor ingested sea water due to the pressure coming in the exhaust causing water coming out the riser to back flow into the 1,3,5,7 bank. The sea water coming in the exhaust bent two rods and put holes in two pistons.
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That's quite a lot of damage. Quite a harrowing experience I bet. Glad you made it through okay, regardless of the damage.

Did you get a detailed quote? That still seems a bit high to me. I hit a submerged object in 2020 and bent a prop, bent a rudder and broke a prop shaft. Including haul out and a test drive after I was just over $5k all-in. With one new prop maybe you'd be in the $13k ballpark before they start dealing with the strut and motor replacement.

Shouldn't we be able to drop-in a new/reman small block merc for well under $10k? Hmm...
 
bahamabreisus said:
I am no insurance expert in any way, but it seems to me the damage was collision related ( you hit something ). The damage should be covered under that part of the policy. Plus the damage exceeds 50% of the agreed value, total loss comes to mind. Might be time to discuss with state Insurance Commissioner.
Click to expand...

That's what we were discussing above. It has nothing to do with how the partial loss occurred but rather the value of the parts associated with the partial loss. Even proper yacht policies will limit how they value 20+ year old components. Or 11+ years...or 7+ years in my case. They are ultimately saying a drivetrain of X years old has no real value...
 
Stee6043 said:
That's what we were discussing above. It has nothing to do with how the partial loss occurred but rather the value of the parts associated with the partial loss. Even proper yacht policies will limit how they value 20+ year old components. Or 11+ years...or 7+ years in my case. They are ultimately saying a drivetrain of X years old has no real value...
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What they are really saying is your insurance is virtually worthless, unless a total loss.
 
Golfman25 said:
What they are really saying is your insurance is virtually worthless, unless a total loss.
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Pretty much you have to be privy to the way insurance companies work no different whether it’s medical or auto The claims have to be astronomically high to maximize the net amount. Some businesses understand that some don’t like I said earlier find a seasoned boat yard that knows how to deal with claims
 
Golfman25 said:
What they are really saying is your insurance is virtually worthless, unless a total loss.
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I would be afraid to total it. I may get a check for 5k.
Stee6043 said:
That's what we were discussing above. It has nothing to do with how the partial loss occurred but rather the value of the parts associated with the partial loss. Even proper yacht policies will limit how they value 20+ year old components. Or 11+ years...or 7+ years in my case. They are ultimately saying a drivetrain of X years old has no real value...
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I get that a motor wears but I don't get how the depreciated the whole claim 14k just to start off. Rudders, props and prop shafts and not wearable parts like a motor. I had a remanufactured engine quoted not a new one. I can see a new one being prorated but not a remanufactured. I have asked the adjuster four times for a breakdown of all parts they are covering and all there not, also what was depreciated and what has not been.
there is a list of things that make it look like they have no idea what they are doing or are just trying to screw me. for example, how do you put a long block in with out gaskets? The remanufactured Mercruiser engine did not come with any. How do you replace a long block in 16 hours? I called Mercruiser and the say at least 30 hours plus. How do you depreciate a non wear item like a rudder?
 
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