I learned something about insurance this week...

[Stoo]

I was speaking with my insurance broker a week or so ago and I learned something that I thought might be of interest to you...

I have always insured my boat for "replacement cost"... which in my case was the price I paid for the boat when I purchased it used. (With a new trailer etc, about $55K). I expressed my concern to the broker that I would have a hard time finding a comparable used boat, and he told me that I could insure the boat for the cost of a new one, as long as I was willing to pay the increase in premium. I have always assumed that if I suffered a loss with my boat, it would be a total one... the boat would either be stolen, or wrecked in a car crash since I tend to trailer it all over the place. The increase in premium wasn't much, so I have increased the value to $120K.

What was interesting in the conversation however, was the following bit of information... If the boat was destroyed or damaged while it was being towed and IF I didn't have separate liability insurance on the boat, the replacement cost provisions of my policy would be "over-ruled" by my car insurance. In other words, if you are towing your boat, and you don't have liability insurance on the boat, the value of the boat will be the depreciated value, in much the same way as the value of the car would be depreciated... even though you are paying replacement cost premiums~

In my case, I do carry separate liability insurance on the boat since I use it with my diving business, but I understand that many boat owners do not carry liability insurance on their boats, and rely instead on an umbrella liability policy associated with their home insurance.

I wasn't aware of this, but thought it might be good to pass this along. I suppose that this policy might vary with the insurance carrier, so you might want to review the details of your policy with your broker....

[jyasaki]

Insurance is really weird business. There's so many ways you can end up being un- or under- insured it's not even amusing.

Best way to tell is to talk to your agent, and come up with a list of possible scenarios and bounce those against your coverage (not just boat: boat, auto, and home.)

Be forewarned, though, you will probably never get your money back from insurance preniums. They're not in business to cover your losses, they're in business to make money.

(Sorry for the rant...)

jky

[Stoo]

Originally Posted by jyasaki

(Sorry for the rant...)

No need for an apology... I think insurance companies are about as popular as Swine Flu is these days.

I think of insurance as a bit like a lottery... makes no sense, will probably never pay off, but someone has to "win".

My last boat paid off when I was rear-ended and it was "totalled" as far as the insurance was concerned. I ended up re-acquiring it, repairing it, and selling it... for more than I paid for it originally. In fact, I doubled my money. All legally!

I think your suggestion is a good one.... that's exactly how this discussion began.... with a conversation about the most likely scenarios where I ended up boatless!

As an aside, you can greatly reduce your premiums by putting a large deductible in place... in other words, just insure for the BIG losses!

[jyasaki]

Originally Posted by Stoo

As an aside, you can greatly reduce your premiums by putting a large deductible in place... in other words, just insure for the BIG losses!

Very true. However, unless you can stand to be boatless for a while, make sure you can scrape up/borrow/steal enough to pay off that deductible, should the need arise...


jky

[Rigaud]

Here in Quebec what ever you tow it's covered by your car insurance and yes the value is at a depreciated one. But for my cargo trailer which is for my business the trailer is covered under the truck ins. but not the merchandise inside. So if I get plowed into the insurance covers the trailer but not the content? Funny thing is that if I put everything inside the truck instead of the trailer, it's covered. My broker wanted me to pay extra for that but I refused.

[Stoo]

Originally Posted by jyasaki

...make sure you can scrape up/borrow/steal enough to pay off that deductible, should the need arise...

That's when I'd launch my appeal on Ribnet