Its that time of year when I have to reinsure Herbie. Our policy is based on the “market value” of the boat. We’ve been declaring the same value ever since we bought the boat, but I suppose that is now over optimistic, and I might be able to get a lower premium if I declare a lower figure.
But how do I decide what Herbie’s market value is? I can think of a number of ways to look at it.
is it:
1. How much I might expect to get if we sold the boat. I haven’t got a clue what that would be. Boats aren’t like cars. You can’t pick up a copy of What Boat and look up the model and year and read off a price according to what mileage band you are in. They’re a bit more like houses where you need an estate agent to survey the place and set a price according to local conditions and current trends. I suspect that condition is a good part of setting a price for a boat. A broker once told me that the exterior paint job makes a big difference, closely followed by the ambience of the cabin. Apparently it’s the women that have the last word when a couple buys a boat. In any case, whatever the selling price we wouldn’t get the full amount because a broker would take his cut.
or
2. How much money it would take for me to part with the boat. This may well be more than it’s true market value. Herbie may well be worth more to me than the price I would get. Also, you only have to look at some of the boats for sale to realise that sellers are often over optimistic in what they will get. You often see boats advertised on brokers pages as “reduced price” as the seller is finally convinced by the broker that his original price is too high. In any case, boats are always advertised at a higher price than expected, to allow scope for a bit of haggling.
or
3. What would I have to pay to replace the boat if it was written off. Even harder this one, because there isn’t another boat like Herbie. Like so many narrowboats, it’s a one off.
Now you might say this is all a bit academic for insurance purposes because the chances of having the boat written off is pretty remote. I suppose it would have to be gutted by fire, or sunk, or successfully stolen. I say successfully because getting away with stealing a narrowboat isn’t easy because they move really slowly and aren’t easily hidden, and because individual boats are easily recognised. I once said to the lady at the insurers that they probably don’t often have to pay up for the whole boat and she said “You’d be surprised!”
One thing I will be doing is paying the extra tenner for legal cover. Knowing how cantankerous some boaters are I reckon the likelihood of litigation after an accident might be costly.
2 comments:
Value is always what YOU think it is worth. An insurance company will only ever pay "market value". That is legally what a willing buyer will pay a willing seller. Sometimes assessed as the auction value. Because of the individuality of boats with variable fit out on a given length it is not possible to assess the value by price comparison on the basis of looking at adverts for boats of a similar size and hull specification. Your surveyor should be able to give a good estimate when you are due for out of the water inspection.
I should think that changing the value for insurance will not make much difference. The major factor in underwriting are the third party claims if you hit somebody or someone gets hurt.
I did ask about upping the insured value of Tortoise, and I was told (by the insurers) that to change it I'd need an official valuation from a surveyor. Hardly seemed worth it, especially if it turns out it's now worth less than it was ;-(
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