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From: (no name) (no email)
Date: Sat Dec 27 2003 - 14:49:25 EST
Interesting reading for choosing a carrier and general info, CTL of
course is: complete total loss.
--------- Forwarded message ----------
From:
To: , ,
Date: Fri, 19 Dec 2003 12:49:43 EST
Subject: Re: [Boatpokers] Replacement Value for Old Wooden Boats
Message-ID: <c1 dot 3ad8343b dot 2d149437 at aol dot com>
The reason for a replacement value was explained to me a number of years
ago,
as Dick pointed out, was to allow the underwriter to pick which rate
would
apply.
Let's take a fairly common example, a Catalina 30. They were first built
in
1972 or 1973 and can still be ordered from Catalina. In 2002 the price
was
$95,000, plus freight, commisioning and tax. In the San Francisco Bay
Area
that
would total about $110K, so the insurance would probably be written for
$110,000.
Now, we survey a 1977 Catalina 30 which sold for $17,900. Looking at
Soldboats and BUC, I come up with a Market value of $18,000, about one
sixth
of the
cost of a new boat.
What happens if both boats lose the mast? It must be cut away, taking the
rigging, boom, mainsail, jib and roller furling gear. The component parts
may
be
ordered from Catalina at less than they may be obtained from a collection
of
outside vendors and they will fit. The cost is $14,400 (from an actual
loss on
a 1984 boat in 2002).
That is why the underwriter needs to know the ratio between replacement
and
market values. He will look at one rate for a 1 or 2:1 ratio and a much
higher rate for a 6:1 ratio.
We won't get into the question of the $18,000 boat which would probably
be
a CTL if I were the claims manager. I could surely sell the complete hull
without a rig for more than the difference between the $18,000 and the
$14,400
repair cost (less deductible).
Now, the old wood boat may have a ratio of 25:1, maybe even higher. A
very
small loss will often be a CTL, where on a newer boat it would be
economic to
repair!
Mele Kalikimaka, Ha'u'ole Makahiki Ho'u,
Jack Mackinnon,, AMS.-SMS
(Senior Marine Surveyor)
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