Constructive Total Loss?
The adjuster from my insurer called the other day. My boat was damaged during Irene. The total estimate to repair the boat is $22k. The main damage was a 3' section of my aluminum toe rail - it is bent and scarred.
The estimate to replace the rail on both sides is $16k ($3k materials, $13k labor). (We have been able to find a rail that matches - looked everywhere. I have a separate post on how to fix the rail).
I had the boat insured for $30k. Because the $22k represents more than 70% of the insured value, the insurer is considering declaring the boat a "constructive total loss." They would write me a check for the $30k and sell the boat at salvage. I would have a right of first refusal to buy at what the appraiser estimates at $3k.
With the exception of the damaged rail (which professionals I have spoken to consider cosmetic), the boat is in great shape.
I am not sure what to make of this situation, and would appreciate any advice.
I have read that it might be difficult to obtain insurance for a "salvage" boat. I wonder if an insurer would write the coverage, with an understanding that the rail is already damaged?