Viper Insurance - Lessons Learned.

[Brian Barmmer]

Disclaimer - This is about insurance. By reading it, you waive all claims against the author for boredom and sobriety. Proceed at your own risk.

I thought I would share lessons I have learned thus far as I am going through the process to get compensated for the unfortunate accident at CRW. As painful as it was to realize that even Ben Parker's fiberglass Kung-fu is not strong enough to return #92 to racing form it has been more painful to fight through the insurance process. I realize that not every situation is the same and not everyone's tolerance for risk is the same. However, I do hope that other Viper owners take note as a little extra consideration now could help a lot later. This likely applies to other One Design classes as some of the problems are specific to our sport.

First, I'll describe what happened and why it is relevant.  I was hit during an organized regatta. The accident was your standard Port-Starboard affair, with the bow of the port boat being far stronger then the port side of mine.  Fortunately no one injured beyond what could be cured with a few stiff dark and stormies.  For pure procedural adherence, a protest was filed. Notwithstanding the gentlemen's agreement that all will be made well, I felt it was important to have documentation from the protest tribunal on the rules that were broken. At this point, I did not realize the full extent of the damage. I towed the boat back to Rondar's shop in Peabody for a diagnoses. An unpleasant outcome: Dr Parker prescribed me a bottle of rum but no magic blue pill of resin and glass was going to make #92 stiff again.

Before I get too far, I should comment that Pieter "Port-Tack" Taselaar has been as apologetic and helpful as one can be in this situation. And yes, he has offered me use of his boat for the season. I could change names to protect the innocent, but we all know each other.

Now..on to what I this has taught me about insurance. Sorry no Law and Order drama beyond here.

In this situation, where I was hit and there was no disagreement on fault, the only legal requirement I have is to notify my insurance of the event. This a contractual obligation only.  There is no requirement for me to file a claim with my insurance. However, I did open a claim to start the process as I clearly couldn't just patch, paint, and sail. I have Progressive insurance and they have been awesome, by the way. The first thing they asked me for was documentation from the protest room and inspected the boat within a few days. They declared it a total loss.

As it turns out, I had an ACV policy. ACV stands for "Actual Cash Value". This means, in the event of a covered loss, Progressive owes me the lesser of the value I entered on their web form or the Actual Cash Value as determined by the adjuster. How they determine ACV is a little bit of mystery in this situation.  If my starboard Honda Accord was hit by a port Nissan Altima, the ACV determination would be easy - there are 200,000 of them for sale at any given time as well as published value guides. But, since there are only around 200 Vipers in existence, pointing to comparable sales isn't a particularly useful benchmark.  Had I bothered to do a little research, or read an article such as this, I would have changed the little drop down box on Progressive's website from "ACV" to "Agreed Value" or "Replacement Cost". My premium would have gone up a little bit but I'd be too busy picking a color for my new viper to write this note.  For the sake of clarification as I understand it, Replacement Cost is the cost of new, similarly equipped Viper. Agreed Value is just what you think it is.. pick a number that makes you feel comfortable in the event your boat is no more.

The above is based on my insurance policy. I only provide it as context because if I had a Replacement Cost policy, it would be easy for me to hand it over to the other company as a benchmark for their responsibility or just have my insurance company deal with it.
Because I had an ACV policy, if I followed through with a claim with Progressive, I would have only been given what they felt was the fair value was, less deductible,  and I would have little recourse. My only option for fair compensation would be to deal directly with the other insurance company.

Back to the ACV mystery. How can an insurance company justify a valuation for the purposed of an insurance settlement without an active market or a published valuation book?  The answer is: they can't.  Not in any defensible manner anyway.  ACV is generally determined by three methods: fair market value,  replacement value less depreciation, and PFA  ( pluck from air ). As I said before, there isn't a massive market for used vipers and at any given time it is unlikely that one will be on the market that was made in the same year as yours. This opens the door for the insurance company to  use the 3rd method and low ball an offer, it's in their best interest.  Now in fairness, if there were 10x the Vipers there would be a larger used market and their offer might be more reasonable. But that wasn't the case and what they 1st offered wouldn't put me back in a boat based on the current market availability.

It is also important to think about the true cost of acquisition is when purchasing a boat. It can be much more than the sticker price. Depending on one's propensity to follow the letter of the law, beyond the check to the seller, a new owner would need to get the boat home, pay the sales tax, register the boat and the trailer. All of these costs add up and should be included in the insurance coverage or considered in a settlement agreement.

In theory, the insured value I placed on my policy only reflects my appetite for risk and should have no bearing on the settlement value placed on by another insurance company. In practice, I was probably underinsured and that has made this process slow by having to argue for fair compensation. It would have been way easier for me to put a claim against my own Replacement Cost policy, collect my check, and start filling out  a Rondar order form while my insurance company deals with the other one.  In the end, we arrived at a number that I feel comfortable with but it took a month plus of effort and some very terse phone calls.

For those of you who skipped all the way down here:  Do yourself a favor, make sure you have a "Replacement Cost" policy on your boat and you're policy covers racing. You'll be much happier.

Another quick lesson.  I don't have a title for my boat. Massachusetts only requires one if you have a motor ( you'll also need to donate sales tax to if you want a title). This has proved troublesome for the insurance company trying to take ownership. A Bill of Sale that meets certain basic criteria is considered conveyance of title in absence of a state issued Certificate of Title.. but don't expect people to understand that.

[Peter Beardsley]

Ugh, that definitely sucks Brian, sorry to hear it, but thanks for writing it all down.  Hopefully now that you have your check, you have your Rondar order form in hand?  Or have plans to pick up 167 or 84 if you want a boat in hand for a bit earlier in the season?

[Justin Scott]

Its also worth noting that the Class Association established a US Sailing one design policy through Gowrie Insurance Brokers.

The short version of this is that (a) We are a recognized member one design class with US sailing. (b) We supplied some data on boat values. (c) Gowrie worked up a plan for class members.   

I have been a satisfied customer of this program for a number of years, including one claim (ironically on Brian's boat).

I selected "agreed value"  which I believe is the standard default selection with Gowrie. If Jonesy steals my boat, at least I know exactly what I will get for boat and trailer.

[Craig Walker]

Brian,

I'm thinking about buying a boat, and the Viper is at the top of my list of candidates. Thank you VERY MUCH for an excellent and informative post. Much appreciated!

Edit: This thread should be made sticky for future reference!

[Jason Hyerstay]

I did agreed value for my used Viper with Progressive and moved my car over for a little bit of a deal.

[Matt Sole]

Its also worth noting that the Class Association established a US Sailing one design policy through Gowrie Insurance Brokers.

The short version of this is that (a) We are a recognized member one design class with US sailing. (b) We supplied some data on boat values. (c) Gowrie worked up a plan for class members.   

I have been a satisfied customer of this program for a number of years, including one claim (ironically on Brian's boat).

I selected "agreed value"  which I believe is the standard default selection with Gowrie. If Jonesy steals my boat, at least I know exactly what I will get for boat and trailer.

I feel much happier with Gowrie than Progressive. The reason being is that when I first set up with Progressive a few years ago, I ended up paying more because I didn't have a US drivers licence...not really fair considering what I was insuring. This also led me to be a little worried about how things would go if I had a claim. The big box insurers really aren't that suitable for this type of thing.
Although I have never claimed with Gowrie either I have only heard very positive things about friends who have claimed with Gowrie....

[Dan Tucker]

As I recall when I insured 50, Gowrie would only write agreed value.

I wanted to insure for market value, which was higher than the agreed partnership buyout from years prior, and they would only insure for the amount on the bill of sale. That's not a problem on a new boat.

I guess the big lesson is, know what your buying, it may not be what you think. And ask about options on coverage limits.

Sent from my Nexus 10 using Tapatalk 2

[Justin Scott]

Dan

You are right that Gowrie does agreed value. You can put any reasonable number as agreed value.  The higher the number you put in , the higher your insurance premium. If you think you have a particularly valuable boat, you can put in a higher number. If you have a junker, you can keep your premiums appropriately low.  I like their system. Its simple and fair.


They are very familiar with Vipers, so if you put in a crazy number like $50,000...they are obviously going to be suspicious of pending fraud.

Since so many Vipers are insured with Gowrie, it benefits us all to be honest because, we are effectively pooling our costs. 

They have been fantastic with claims so far. They know we talk to each other. If one gowrie insured boat damages another gowrie insured boat the response time is immediate and if you both agree fault, they wont question it.

[Dan Tucker]

Dan

You are right that Gowrie does agreed value. You can put any reasonable number as agreed value.  The higher the number you put in , the higher your insurance premium. If you think you have a particularly valuable boat, you can put in a higher number. If you have a junker, you can keep your premiums appropriately low.  I like their system. Its simple and fair.


They are very familiar with Vipers, so if you put in a crazy number like $50,000...they are obviously going to be suspicious of pending fraud.

Since so many Vipers are insured with Gowrie, it benefits us all to be honest because, we are effectively pooling our costs. 

They have been fantastic with claims so far. They know we talk to each other. If one gowrie insured boat damages another gowrie insured boat the response time is immediate and if you both agree fault, they wont question it.

Not true, in my experience, you cannot put in any number for valuation. I wanted to insure for $18k, which is about what I later sold 50 for. They would only write the $12k that I bought in at years earlier before used Viper values went up. They would not insure for more than my purchase price. Not really an issue these days, and it obviously worked out for me! LOL

I definitely like Gowrie and I would choose them again. And you are correct that it does behoove us to have many boats insured with them, and be fair with claims.

Sent from my Nexus 10 using Tapatalk 2

[Jeff Jones]

I did in fact put in an "agreed value" for 31 after I refurbished it.  It was something close to what I would have paid for a new rondar at the time.  I thought the boat was worth more, but decided to keep the number in check.

After my crash they cut me a check, no hassle. 

"know what you are buying" - truer words were never spoken Dan.  But i'll add - "and be able to explain to an insurance agent why a 1997 built epoxy bennet is at least as valuable as a 2011 UK built Rondar"

Dan

You are right that Gowrie does agreed value. You can put any reasonable number as agreed value.  The higher the number you put in , the higher your insurance premium. If you think you have a particularly valuable boat, you can put in a higher number. If you have a junker, you can keep your premiums appropriately low.  I like their system. Its simple and fair.


They are very familiar with Vipers, so if you put in a crazy number like $50,000...they are obviously going to be suspicious of pending fraud.

Since so many Vipers are insured with Gowrie, it benefits us all to be honest because, we are effectively pooling our costs. 

They have been fantastic with claims so far. They know we talk to each other. If one gowrie insured boat damages another gowrie insured boat the response time is immediate and if you both agree fault, they wont question it.

Not true, in my experience, you cannot put in any number for valuation. I wanted to insure for $18k, which is about what I later sold 50 for. They would only write the $12k that I bought in at years earlier before used Viper values went up. They would not insure for more than my purchase price. Not really an issue these days, and it obviously worked out for me! LOL

I definitely like Gowrie and I would choose them again. And you are correct that it does behoove us to have many boats insured with them, and be fair with claims.

Sent from my Nexus 10 using Tapatalk 2

[Darren Gilbert]

Jeff - They cut you a cheque and you got to keep the boat?

[Jeff Jones]

I had to buy it, but it was a pretty easy deal.  I made an offer and they accepted.

[Justin Scott]

Make sure you check the box where it asks you if you will be racing against Jeff Jones. Its a higher premium but its worth it.

[Jeff Jones]

Justin, I think I am more of a danger to myself rather than to others.  At least that is the way my wife put it.

The adjuster did say the words "high risk" at some point in the conversation.

Make sure you check the box where it asks you if you will be racing against Jeff Jones. Its a higher premium but its worth it.

[Dan Tucker]

My liver is at high risk when JJ is nearby.

How do I insure for that?


Sent from my Nexus 10 using Tapatalk 2