by evan » Tue Feb 07, 2006 11:04 am
Hello,
My cousins personal watercraft had an agreed value policy with $8000.00 worth of coverage. This amount is well below the fair market value of his vessel, and the flood damages even exceed that amount.
My question or concern is that the Ins. Co. wants to settle for the policy value (no problem), but they say, that they also have the right to salvage. I don't think they should have that right, since they are not compensating him for the true ACV. They didn't collect the premium for the ACV, but collected only the stated amount.
Since I had been an appraiser (years ago), and had settled claims before, hence I know that the owner had the right to salvage in this situation. Has anyone else had any experience in this area?
My cousins personal watercraft had an agreed value policy with $8000.00 worth of coverage. This amount is well below the fair market value of his vessel, and the flood damages even exceed that amount.
My question or concern is that the Ins. Co. wants to settle for the policy value (no problem), but they say, that they also have the right to salvage. I don't think they should have that right, since they are not compensating him for the true ACV. They didn't collect the premium for the ACV, but collected only the stated amount.
Since I had been an appraiser (years ago), and had settled claims before, hence I know that the owner had the right to salvage in this situation. Has anyone else had any experience in this area?
Posted: Wed Feb 08, 2006 09:29 am Post Subject: agreed value
It has become a common feature for the insurance company to take the ownership of the boat and do whatever they wish with it, once they have written it off. More often they would sell it to a salvager (or anyone offering the highest bid, for that matter) in an effort to recoup some of their losses. Incase they realize more than what they paid out, they would be considered ahead. But in spite of all these, the insured has the first right of refusal. Under those circumstances they would accept a lesser negotiated amount (or nothing) and keep the boat, either to repair it or sell it to a salvager automatically to get a better loss recovery. I could get rid of a recent loss like that, but I had to deal with a lot of things since there was no confirmation from the salvager's end.
Posted: Wed Feb 08, 2006 11:27 am Post Subject: agreed value
Its quite weird to expect that the value of the boat agreed upon with the insurance company could be less than the present worth of the boat. I have also opted for an agreed value policy, guessing that replacing my boat would certainly cost more than the actual market value. Although I am not involved in an insurance business, sometimes I feel that they would be entitled to the salvage, incase they pay the entire policy coverage amount. It seems the insurance company would certainly feel glad to sell his boat back to him instead of trying to scrap it or sell it to someone else.
Posted: Sat Mar 25, 2006 03:33 am Post Subject:
if you enter into a contract that states you will pay a premium in exchange for the insurance company to pay a predetermined amount in the event of a loss, inyour cousin's case $8000, I don't see the issue if they paid him $8000 (minus deductible). Although the ACV may be more, he chose the amount when he bought the policy and the premium was calculated accordingly. How could anyone rationalize the company should pay more than the agreed amount? If the ACV was less, they would still pay the agreed amount.
You have to read the policy to determine how the company you chose will settle your loss. Most people never read their policy until a loss, that's when they find out exactly what they purchased, and then its "the big bad insurance company is try to pull one". Trust me, insurance companies want to pay what they owe, but not one penny more. Its easy to have an idea of what you think is right and what is contractual.
In addition, the policy states how the salvage will be handled. Insurance companies most always reserve the right to salvage. You were correct when you said insureds can keep the salvage; you can owner retain the salvage for a fee. The company will research the salvage value of the vehicle and deduct this amount from the final settlement. Paperwork is submited to the state and the title is branded salvage, usually full coverage is no longer available. Hope this info is helpful!
Posted: Wed Apr 05, 2006 05:57 am Post Subject: Thanks !
I'm sure that we had focussed on one of the topics concerning an important issue. I have no other way but to thank each one of you for contributing at your own free will !
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