Insurance Depreciation?

[TMK988]

I am working out the details of my insurance settlement with BoatUS. They have been very fair, however, my agent said that were my boat one year older (it's a 2006) then the settlement would have been subject to 'depreciation (note, this is for repairs)! I don't know how much money they would have deducted, but this concept confuses me. A 2000 boat will cost the same amount to fix as a 2009 boat, and maybe even cheaper as parts have been around for a while. Do you all have this 'depreciation' clause written into your policy and is the the industry norm?

 

[nymonymgr]

What exactly happened? I haven't had a claim (knock on wood) but I did have along chat with my insurance agency about lowering the 'agreed upon hull value' for my latest renewal.

That deals with total loss but I can tell you that according to my policy (through NBOA), for other than total loss they pay "....the reasonable cost of repair or replacement without deduction for depreciation if your insured watercraft is partially damaged."

There are exceptions which include items such as batteries, sales, canvas outboards or out drives that are more than 7 years old, dinghy's/tenders more than 7 years old, trailers more than 7 years old and something they call 'other machinery'.

For those exceptions they pay the lesser of the actual cash value, cost of repair subject to depreciation, cost of replacement or the amount of insurance.

All that said what exactly had to be repaired?

 

[Hampton]

Same - I have "Agreed upon Value."

Some insurances are based on the market value of the boat - you probably save on insurance and hope you never need it.

 

[Banagy]

Experience with Boat US insurance on my 17 foot Prince Craft duck boat. Is has a 40 hp, 1995 Evenrude out board. Hit something out it the lake. Lower units cost over $1800. Boat US insurance paid little over $700. because of depreciation, (first clain) Changed insurance company this year.

 

[nymonymgr]

Makes sense though....as I said in my post...I have NBOA. They pay for damages with no depreciation unless its an outboard, outdrive, trailer, tender/dinghy or 'other machinery' more than 7 years old.

 

[duckmnn]

My insurance is 0-depreciation on outdrive with 1% deductable.

 

[TMK988]

My question then is why do they pay us less for anything just because it is 7 years old. On cars they pay what the cost of the repair is regardless of how old it is. As per what happened to my boat, it broke loose from the mooring and ended on shore. You may check a few of my posts on this (with a picture!) but the damage didn't look like much. There is damage to the bottom of the boat and some scratching on the hull and there is problems with the outdrives. The boat sat on them for hours being lifted up and down. They are out of alingnment and all kinds of stuff. You all know how fragil they seem to be.

 

[nymonymgr]

Great question...one of which I don't have the answer to. Like I said in my first response, my insurance company only depreciates outboards and outdrives which are more than 7 years old.

I am guessing they use those rules and also apply them to trailers and tenders as these are expensive items that are susceptible to damage from grounding, etc that in a lot of cases happens because of user error, unlike say the engine on a stern drive boat.

Unfortunately the folks with accidents that aren't a result of user error kind of get screwed.

In terms of comparing to auto insurance you just can't. Very different values, uses and types of coverage. Imagine......I pay $800 a year to insure a 2010 Jeep Wrangler and if three years from now it gets totaled, they will give me NADA value. I also pay $845 a year to insure my 2008 Sea Ray 330. If I don't lower the agreed upon hull value and it sinks in three years they will pay me the full $245K it is insured for.

 

[Jimmy Buoy]

So... maybe instead of asking who has the best "pricing" for boat insurance we should be asking, who has actually experienced a boat claim and get feedback on satisfaction levels for particular insurance companies?

I know everyone likes to think they've got the best insurance deal, but if you are only looking at the price you are missing the boat!

 

[nymonymgr]

Couldn't have said it better!! Bottom line with any insurance; auto, home, boat etc........understand your policy and ask a lot of questions.

The number of people with the 'right' amount of insurance and coverages I believe is smaller than the number that are under insured and over insured!

I was going to lower my 'agreed upon' hull value by 45K to $200K now that the boat is two years old. Turns out that would have only lowered my premium by about $175 a year. However, upping the deductible from 2% to 4% lowered my policy by $350. Bottom line for me....in case of a total loss I won't be worried about a $9,800 deductible. As far as depreciation on running gear, I don't worry about that since I've got inboards.

 

[Groucho]

This is why some companies are significantly less than others. Some have replacement value built in...some have it as an optional coverage. For the most part...you get what you pay for.