BVI and Insurance Companies?

Any body have any idea what % of hurricane damage is/will be covered by insurance.
We had a major hail storm locally a couple of years ago (not to be compared to a hurricane) but millions of $$ of damage to houses and autos none the less.
All though it took some time, there are a lot of folks in new cars, and a lot of houses with new roofs and paint thanks to the influx of insurance dollars.
Don't know if the same will happen in the US/BVI but might be a small consolidation at the end of what looks to be a long dark tunnel. Unless you work for the insurance companies...

I was wondering the same thing.

If you include St. Maarten, the Spanish Virgins and Puerto Rico in the number of totaled boats that would mean at least 1,000 boats destroyed.

With an average insured value of $500,000 per boat, that is $500 million dollars.

Can the insurance companies even absorb that kind of a loss - Half a Billion dollars? And even if they can take that kind of hit, will they be willing to pay out those funds?

Just curious.

After depreciated values, deductibles, etc
the amount is likely something less

Even if at full pop.. 500 million is a drop in the bucket and the inse co's can easily handle it, unless some smaller local firm got greedy as happened post-Ivan on Cayman

On the charter boat side insurance policies are from all over. Voyage a few years ago used a company in South Africa. I suspect they still do the same. Moorings underwrites through Lloyds. There were some smaller companies using a local company. The average value of a charter boat payout I suspect will be closer to 200,000.00 if totaled, less if repaired.
I don't see how a company can just refuse to pay. They would cease to be a insurance company at that point. They could however fail which could be a nightmare for those of us who own boats. If a specific charter companies insurance fails I see know way the associated charter company would not fail so they have a vested interest.
One thing that will be interesting is how many owners choose to invest the insurance money in a new boat verses taking the money and running!

We discussed that also, and also businesses, houses etc. If the insurance companies have "replacement" on the policies, could they offer cash at a discount? Reading through the lines of some posts...they might not get the full compensation they need to rebuild and repair.

Interesting discussion.

I just read this from Bloomberg Associates about St. John, USVI:
"440 boats are sunk or ashore on St. John alone."

So, 440 boats on St. John and how many in the other places I mentioned above. I think my estimate of 1,000 boats is very light - so there could be close to maybe 1,500 or 2,000 boats sunk or severely damaged?

Wow! That is a LOT of insurance claims and payouts.

CRC is insured through Caribbean Insurers. An adjuster checked out the house yesterday..I will let you know here how it works out. I am hoping they pay enough for us to bring CRC back to its former glory!

Keep in mind there are a lot of uninsured boats and many policies require the boat to be clear of the hurricane belt during the season and would be essentially uninsured.

I've spoken with my insurer. My policy is underwritten by Lloyd's. It is a stated value policy. So no depreciation. I have a 4% deductible for "windstorms" and a $250 deductible on my personal property. So with the deductibles I won't be whole, but I will be OK. Much better than the people who live down there.

I think this will greatly depend on how many come out whole. I believe with a new boat, insured value is the purchase price, so presumably they could take that money, pay off the loan and still have enough for a new down payment? I think with Moorings it might be 100% the first 2 years, so someone close to 2 years in probably is in the best possible position if a total loss?

Personally, If our boat was there, I'd be wishing for a total loss or minor cosmetic damage. I'd hate to think of how any significant damage would impact future value.

Exactly. I was relieved when I was told my 8 1/2 month old boat was "unsalvageable."

The insurance companies frequently use "Re-Insurance" to spread the losses and thereby the increased business viability.

Some the boats have depreciated values. Some are new(<1 year), and agreed upon value at or near purchase price.
My boat had a 4% deductible for named storm (double the baseline deductible).

Still awaiting surveyor's full report (the less than totaled usually take more time than the obviously totaled yachts)

Will be curious to see how "fair" insurance companies are in dealing with losses

The "good hands" commercial of past years... isn't always how the various companies treat policyholders
But - can hope for the best

I work in the insurance business on behalf of policyholders. The insurance market will not go under from these two events. Far from it. They will use the losses from Irma and Maria as an excuse to raise rates and eventually they will profit from the storms. As far as paying claims the total loss vessels will be paid at hull value per the contract less the deductible. In some cases the deductible is 10% so be prepared to come out of pocket that amount.
On damaged vessels the surveyors hired by the insurers will come with an estimate of damages. They will attempt to settle the claim based on that estimate regardless of market conditions or the availability of qualified repair yards in the Leewards. To get a damaged BVI yacht repaired it will need to be transported down island or to the US. Or you can wait 2-3 years for a slot to open in the VIs.
If you have a damaged boat in the VI push to have it totaled then negotiate to buy back the salvage. The boat is likely worth more to you than the insurer so there are opportunities to be had that benefit both sides.
Insurance is a for profit business. Lloyds members have not gotten rich over the past 400 years by paying claims quickly or by settling at fair numbers.
Good Luck.

NC - nicely said

To all... keep in mind that the Inse Co's are not your friend today... regardless of what you want to believe

It's business...
keep that in mind
100% of the time

Great comments NCSailor and CGB!!! Thank you for this.

For at least Irma the reinsurers were open and writing reinsurance and secondary coverage to primary underwriters who thought they may have a risk of overexposure to the path and level or threat. As long as the primary underwriter was liquid before the storm there is no reason why any of the underwriters should be at risk of insolvency from Irma. No one in the financial markets or banking it talking about underwriters not covering insured claims.

Couple added thoughts observations. Say you are in a guaranteed revenue program and your boat is 1/2 loss. The charter Co has to still pay you revenue, have the boat repaired ( like a phase out ++) and they do not have a boat to rent. Meanwhile you still have owners privileges on other boats and then end you have a "damaged good " to - keep, sell, or trade... In this case, I am thinking there will be more totaled boats as possible from the charter co perspective.

Second thought/opportunity-If someone that is reputable and reliable could make a good living if they arranged for owners that buy the salvages to barge a whole load of them down Island and be repaired under the watchful eye of said person. It would offer some compensation to this person as well as jobs to locals and hopefully end up with the previous owner a good boat at a fair price or put more boat back in the used market. I realize this may be wishful thinking but I am guessing there is someone out there with this kind of knowledge and connections to make it happen.

This is definitely "one for the books"

"salvages to barge a whole load of them down Island and be repaired" - That won't work.

The facilities down island cannot compare with Florida and the parts availability down island is very poor. The best thing to do is bring them to the States where they can be easily repaired and then brought back to the Caribbean.

I imagine... from the insurer's perspective....
Ditch'em... pay off best'minimum.... and close the file

Tortola does not/ will not... have the manpower to deal with volume
And... moving hulks... only some other entrepreneur... might have a concept
btw... count me in... for the thinking... participation if it makes sense

As I said above. The salvage value from an insurer perspective and an insureds perspective are different. The insurer to recover is dealing with a large number of boats in a crowded market. The owner with resources and knowledge can benefit. But don't discount repair costs. There is almost no capacity in the BVI

So true!
When I inquired why the rate for my boat had increased every year for 6 years with out a claim from me , I was told to blame hurricane Sandy and all the other natural events the company had to settle with their clients.
Don't suspect boat rates will be going down any time soon.

Hurricane Irma and Maria's Impact on the Yachting Market

Video Recent take on storms impact on yachting market in Islands

KARMA Time for the insurance companies

sail445.... no man... you have it backwards

They are a business.... they only facilitate payment
with the vig... no different than any other bookie

it is the everyday man that will suffer... not the Co's

Based on investor confidence, there appears no need to worry about the insurance industry. Just look at mutual fund price for Fidelity® Select Insurance Portfolio (FSPCX). It's just off its all-time high set in early August just prior to Harvey, Irma and Maria, and has recovered nearly all the price dip that occurred as these storms rolled through.

It appears that there will not be payment issues on the fleet policies in the BVI. There may be issues where policies were not current on payments. I am not sure of the legalities in that situation. The big fleets have for the most part stated value policies so no real arguments over boat value.
G