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  #1  
Old 05-31-2011
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new boat: insurance question

Hi,

we just purchased a catalina 27 and were wondering about insurance. It's a 1978 and we paid $3675 for it. When I called GEICO they said a catalina 27 has a blue-book value of $10,000. So I'm not sure what to do about the comprehensive; do people usually insure for the blue-book value of the boat, what they pay for the boat, or somewhere in between?

thanks.
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Old 05-31-2011
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Its really up to you, the $10K is just the upper limit. Sometimes they will not insure it for more that what a certified surveyor will value it at. One thing for insurance is that you might consider a rider that gives you full value for parts. Like if you get demasted, unless you have that rider you will only get the depreciated value of the mast. With this rider you would get the full value. Sounds llike you got a good deal.
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Old 05-31-2011
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Another consideration... If the total value of the boat is only $4,000, do you need to insure it at all? If it was a total loss, could you afford it? I'm assuming it is paid for and there is no loan on it.

I would look at just getting liability coverage.

Dave
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Old 05-31-2011
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I know that the marinas on the west coast require you to have insurance. Our first boat, a 26 footer, cost us around $24 a month through Progressive. That gave us a $1000 deductible and offered the protection that the marinas need. Something like $100,000 for dock damage.
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Old 05-31-2011
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If you over insure, the carrier will be more likely to want to repair your vessel than pay it off as a total loss. If the damage is that bad, I would prefer to be paid off and buy another.
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Old 05-31-2011
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What if it sinks? I know some areas require that a sunk boat be recovered, you would want insurance to cover that expense if it happened.
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Old 05-31-2011
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Does anyone here REALLY understand how marine insurance works? For instance, consider commercial insurance on a building. Let's say you insure the building for $100,000 and then have a fire and it is a total loss. It turns out the building was actually worth $200,000. So the insurance company says you were 50% insured, and pays you 50% of your $100,000 of coverage, or just $50,000!

I paid just $6500 for my boat, and have just liability insurance for a couple of hundred dollars. If I wreck your boat or hurt you or someone on my boat it is covered to the policy limits. However the damage to my boat I have to pay for. If you damage my boat, I'm going after you or your insurance!

I may spring for damage coverage on my boat now that I put a lot of time and money into her, and the market value is now considerably more than when she was lying there in pieces.

Gary H. Lucas
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Old 05-31-2011
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Charrob, many insurers like to play a game with valuation and premiums. They'd like you to pay a premium based on the highest value, so you pay them the most money.

Now what happens if they have to pay out a total loss? Depending on your stat insurance regulations, and your insurance policy (yes, you really have to read all that painfully small print, and they do actually intentionally make it hard to read) you may only be entitled to "book value, replacement or market value, or xxxxx, whichever is least". And those terms will usually be defined by state law, but oddly enough, the insurers often don't follow the definitions because they know that most customers won't know what the laws require, either.

So now you've paid for $10k of insurance, and they'll say "Well, we found one for sale two counties over for $3500, so that's what we're paying you."

This is not my opinion, this is the voice of experience with how insurers have actually behaved, and how state laws do and don't force them to play nicely.

So if they think it is worth $10k, that's great. But unless they are writing "agreed value" coverage, where they agree to pay you $10k in the event of a total loss, demand a sample policy and look for the gotchas. They're all very reluctant to provide a sample policy.

And even with "agreed value" some of them like to play games. I spoke to a Progressive rep about that (for a car) and he eventually admitted they write coverage "for the agreed value or the replacement cost, whichever shall be less".

These are not your friends. By all means shop, but remember that their only interest is making your money into theirs, and not giving back any more than they have to. The ones who deal most fairly? Still want all your money, they're just sharp enough to know that by playing nice, they can keep the customer longer, or for life.
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Old 06-01-2011
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If you're in a marina, I'd recommend that you buy the minimum liability insurance you can to satisfy your contract with the marina.

If not in a marina, I have to ask why do feel you need insurance on a $4K boat?
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Old 06-01-2011
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Quote:
Another consideration... If the total value of the boat is only $4,000, do you need to insure it at all? If it was a total loss, could you afford it? I'm assuming it is paid for and there is no loan on it.
I paid $4,000 for my boat and motor. Safeco insures it for boat/motor loss, medical per occurrence, onboard equipment, etc., and most importantly, liability ($500,000) for $23 a month. $250 deductible. To me, that's a great deal.

I don't have the cash to go out and outright buy another $4,000 boat in case I lose this one. I'm Po People.
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Last edited by carl762; 06-01-2011 at 07:04 PM.
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