Recreational Marine policies are typically Agreed Value policies. Auto-renew systems normally do not apply depreciation, so that the policy value remains constant after many renewals. Meanwhile, we’ve seen wild variations in the fair market values of watercraft, particularly following extreme economic cycles. While the premium income is nice, the insurer often pays multiple times what the Fair Market Value of the vessel is at the time of a total loss. In storm-prone areas, this can be very costly. Whether through a random sampling, a definite schedule, or a case-by-case basis at renewal, monitoring the value of individual risks on your book can be extremely effective in maintaining an acceptable level of profitability.
Developing an opinion of a vessel’s value, in times of economic turbulence can be challenging. While a full detailed appraisal is often not necessary, a familiarity with the current market, along with an understanding of the Uniform Standards of Professional Appraisal Practice, is vital to develop an accurate opinion of the value of pleasure craft. With the information you make available, we can provide an opinion of value which is sufficiently accurate for underwriting purposes. Should it be necessary, a full, detailed appraisal by an ASA certified Marine Appraiser can be arranged.