|Geisel Marine Surveys and Consultations|
|Richard H. Geisel, SAMS® AMS®|
IAMI, Certified Marine Investigator
Licensed North Carolina Insurance Adjuster
Principal Marine Surveyor
Offices in Richmond, Virginia
and Wilmington, North Carolina
Performing Marine Surveys & Investigations
In The Mid-Atlantic Region Since 1975
An interview published in the September/October 2009 issue of Carolina Coastal Magazine
Lost your boat? Don't lose your shirt.|
By Doug Mayle
By time you read this, hurricane season will be in full swing, and perhaps one might have just whacked your boat. Hopefully you've read the thousands of articles over the years about how to physically prepare your boat for an approaching hurricane. In this issue we will discuss the financial preparations you should make, and will discuss post-disaster responsibilities.
Richard Geisel, of Geisel Marine Surveys and Consultations, has been surveying boats in the mid-Atlantic region since 1975. He is a member of the Society of Accredited Marine Surveyors, IAMI, Certified Marine Investigator, and Principal Marine Surveyor.
Q: Richard, our reader should prepare physically for hurricanes - doubling lines, adding chafe protection, removing canvas etc. - but what financial precautions should he take?
A: Before hurricane season starts you should have a policy review with your agent. There are two types of policies - "Actual Cash Value" or "Agreed Value". Under an Actual Cash Value policy, your insurer may depreciate your boat's value based on its age or make an adjustment for the current market price of your model boat. The insurer will use published sources such as ABOS, NADA and Sold Boats. With an Agreed Value policy, you and your insurer agree ahead of time to a contractual value for your boat. Obviously, this is the best type of coverage to have.
Q: Richard, do I understand you correctly? Under an Actual Cash Value policy, I could pay premiums for $50,000 worth of coverage - for what I believe is a $50,000 boat - but my insurance company may not pay me $50,000 if they declare it total loss?
A: That is correct. There are different types of policies and you need to understand what you purchased. And there is another factor to consider - recovery and preservation. Under many policies, the cost of recovering the boat is combined with the hull coverage. For example, you have a $50,000 boat, and you think you purchased a $50,000 "policy", if the cost of recovering your vessel is $25,000; you may only receive $25,000 for your boat in the end. Recovery and hull coverage should be separate items in your policy.
Q: Richard, you've got me wondering about my own coverage. I'll be looking up my agent's phone number in just a minute. In the meantime, we're going to pretend that a hurricane has just marched up the coast and made a beeline for our reader's boat, trashing it, along with everything else in the marina. What should the boat owner do first?
A: Contact your insurance agent immediately. Follow his instructions on how to officially report the claim and obtain a claim number. The agent might instruct you to call the insurance company directly and speak to the claims department. If not, do so anyway, and get the information straight from the claims office handling the catastrophe. Write down your claim number. Every time you speak with your agent or the insurer, take notes, and be sure to write down the date, time, and name of person with whom you are speaking.
After contacting your agent, call a repair facility to get in line for estimates and repairs.
Q: Once the insurance company is notified and a claim filed, should the owner do anything to the boat or just leave her where she is? Should he spend any money out of pocket or invest time and labor into the boat? At what point is it "out of his hands"?
A: The responsibility for your boat is never "out of your hands". Ask your agent or insurer what steps to take. You are responsible, to the best of your ability, to secure and preserve the boat from further damage.
If you can't reach your agent or insurer, don't wait. Your boat is your responsibility and you must take all reasonable and prudent steps required to preserve her, including refloating her and moving her to a repair or storage facility. Keep a detailed file of all expenses and forward copies to your insurer. Knowing the coverage details of your policy will help you in the process.
Q: What sort of process can our reader expect if the boat appears to be a total loss?
A: Insurance companies send catastrophe teams to regions affected by named storms to handle many different asset classes - real estate, autos, boats, etc. In addition to adjusters, these teams may also include professional marine surveyors. If your boat is declared a total loss you will be paid according to your policy. This is why it is preferable to have an Agreed Value policy with salvage and hull coverage separately defined.
Q: I'm definitely calling my agent. Let's now assume an adjuster has been by and inspected the boat. The damage was extensive, but the boat wasn't totaled. The adjuster has one settlement amount, but our reader feels this is way too low, based on estimates he solicited from the boatyard. How does he reconcile the problem?
A: The procedure for disputes is laid out in your policy. If there is a dispute in a total loss situation, you can request a formal valuation appraisal from your insurance company. Submitting estimates from a boatyard or obtaining a second opinion from a marine surveyor can often reconcile repair costs disagreements.
Q: Our unfortunate reader now has his boat in for repairs. The yard discovers many items that were overlooked by the adjuster. How should the owner proceed?
A: Overlooked damages should be reported, photographed and estimates submitted to the insurance company. No work should be performed until your insurance company approves the work through a supplemental claim. They will want to ensure the damage is storm-related. If caught early enough in the initial repair process your insurance company may cancel all repairs and reclassify your boat as a total loss.
Q: What about an owner who is an addicted do-it-yourselfer who doesn't trust anyone to touch his vessel? How does he get compensated for the damage?
A: You may perform the repairs yourself. The procedures for determining the cause, scope of the damage, and cost to repair remain the same. Many companies will pay you directly and you are then free to do the work yourself.
Thanks Richard, that was an eye-opener.
I don't know about you, but I have a phone call to make!
Installed October 25, 2007, last updated May 5, 2018 - Hosted and Maintained by Don Robertson