Some terms to know if you are dealing with a claim.
Replacement Cost Value (RCV) - this is the cost of buying a new boat or part in
today's dollars. You probably have your boat insured for this amount.
Actual Cash Value (ACV) - the amount that a boat or part is worth after
depreciation is applied.
Depreciation - everything has an average expected lifespan. Similar to how cars
lose value (depreciate) the minute you drive off the lot, so do boats. Boats
depreciate as a whole, similar to the way cars do. But parts, like winches,
also depreciate individually.
Most parts are estimated to last less than 20 years.
For example cushions may have an average life of 5 years. The wood table 15
years, the engine 20 years. Etc.
The hull, mast and stainless tubing will probably have longer lifespans
estimated. 35-50 years.
Depreciation is calculated by dividing the age of the item by the expected
lifespan. So 3 year old cushions will be depreciated by 60%.
Recoverable vs. non-recoverable depreciation - your policy may be a RCV policy
or it may be an ACV policy. If you have an ACV policy, all you ever get is
the ACV of the part being replaced. So you can not recover the depreciation.
If you have a RCV policy, they hold the depreciation until you do the repairs
or replace the item meaning you recover (are reimbursed for) the full cost to
repair or replace the items.
Once you do the repairs, you submit your invoice and they reimburse you.
I have a lot of experience with home owners claims, and not as much with
automotive or boats, but from my understanding some policies for boats and
autos always depreciate materials and materials are always ACV and only the
labor is recoverable.
Check with your agent to find out the exact details of your policy.
You can also nearly always add endorsements to your policy to make it pay for
'everything' but that drives up the cost of the policy.
>From what I have seen in my 10+ years in the industry, most people aren't
>insured the way they think they are which is the reason why some of you left
>your previous providers and went with new providers.
Nearly every policy provided by all carriers is identical, because they all
pretty much just use a standard ISO form. But the agent at your new insurance
policy listened to the issues you had and added endorsements to provide
coverage to make sure you spent have the same issue again.
If you get coverage review requests from your agent, you should probably take
them up on it. They probably send you a request about once a year.
I know this was long, but I hope it cleared up some questions about what and
why things happen in a claim.
James
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