Insurance claim ethical question?

I have an older boat. (American Skier 1987) I have had the boat for about 6 years and the insurance policy for the last 2 years. As I was putting the boat away this past winter, I noticed a good sized crack in the hull under the engine. (not all the way through... $1,000 fix) The insurance came out and saw some other faulty work that had previously done along with some nicks and dings, and they want to total the boat because of the other stuff that they saw. It did not seem to be a big deal to me, except for the crack I called them on. The boat works perfectly and I do not want to get rid of it, but they want to total it. I would have the option to buy the boat back, but it just seems wrong for them to give me the money for the boat when I want to keep it. Granted I have to buy it back with a salvaged title. This seems like the definition of insurance fraud, and I do not want to participate in that!!! What do you think?

are you serious, let them total it, it is their decision, don't be crazy

When the insurance company totals a car, boat, etc, etc, they are basically buying your boat. For you to keep it you are buying it back from them. It sucks but it makes sence.

Just an example. If they total it for $5,000 ask them what the buy back price would be it's normally less. You might be able to buy it back for $3,000 to $3,500. It is NOT fraud. This happens every day with auto policies. Walk away with enough money in you're pocket to fix it. The only down side is it will have a salvage ****le.

It happens all the time. They are not totalling your boat out because they are stupid. They're doing to to minimize their risk and flush you as a "customer".

They take a look at your boat, see a possible liability in the future with virtually no reciprocal value (i.e. the value your boat has at auction) and make a judgement - total it out and dump the liability (you).

I had this done to me when my old but very capable car was hit by another party. I took my car to a body shop and asked "what will it take to fix it?" He told me "it doesn't matter" - they'll give you what the'll give you and that's it. If you fight it the law allows them to total out the vehicle whether you like it or not.

I took the insurance settlement along with the deduction for keeping the vehicle. Not a big deal I guess - I can't sell the car but hadn't planned to anyway.

As for the buy back price the rule of thumb is gernerally 20% of the totaled value (e.g. $200 on a $1000.00 settlement). With my car it was only like 160 bucks but I drive a beater and I think it was 10% of the setlement. Bottom line I kept my car, got a little money out of the deal & flip off the SOB who hit me on regular basis since he lives down the street from me....


(Message edited by bigdtx on March 20, 2007)

I am an adjuster, and maybe able to add a little here.

Here's what I perceive happening here. They do an estimate for the damage you report. The past damage is noted for valuation, not to pay you for the damage. Because of the previous damage, and the damage you are claiming, the boat is not worth fixing.

They will pay you what they think the boat is worth "actual Cash Value" or ACV. The past damage will be deducted from the ACV, they pay you the rest minus your deductible. They then will let you buy the salvage, at their project salvage value.

Of coarse, it changes from state to state, so I maybe way off from where you are at. Hopefully that wasn't to confusing.
So you will get money and keep your boat. Nothing wrong with that. Make sure you follow everything that's going on. Follow the values, damage and what they'd pay for repairs.

by law in tn. they must allow you to buy the boat back in you wish. It will be a lot less than the value of the boat. You should come out smelling like a rose.

Doesn't that also mean you will never be able to get full coverage for that boat again? I think at that point you will only be aloud to carry liabiltiy insurance.

Insurance companies SCREW YOU and ME everyday! let them total it!

Rod maybe right. I am not a coverage expert, but w/cars they will not give you the same coverage with a salvage title. Atleast here in CA

In tn. you can still get full coverage.

I would say go for it. Its not fraud if they are advising you do it.
The only thing it will hurt is resale...

I had experience totaling a motorcycle about 2 years ago with Foremost Ins.

The adjuster told me that once the cost to repair exceeds 70% the NADA value, they total.

The purchase back price (salvage value) turned out to be 15% of NADA value.

So, they cut me a check for NADA value, I cut them a check for 15% + sales tax of NADA value. (I love Washington State, paying sales tax twice on my own f---ing motorcycle)

Work with them and see what they appraise the boat at.

Keep in mind, you can probably never full-coverage insure the boat again. The total title makes it worth salvage value to the insurance company..

Also, there is no ethical question here. It's they're game, they've wrote the rules, you're not breaking any rules or laws.

Why would you ever want to put full coverage on such an old boat anyway?

(Message edited by tuneman on March 22, 2007)

and tuneman wins with the best point of the day.

>Why would you ever want to put full coverage on such an old boat anyway?

He obviously has it now...