Constructive Total Loss Boats
Have you had a boat that is deemed a constructive total loss in an accident? Most of the time the boat will be sent for disposal and the insurance company will cover the costs. However in recent years we have noticed a rise in the CTL boats being handed back to the owner. Is this a safe practice? As a rule if we are asked to dispose of a CTL boat we will never offer it as a project.
In situations where a surveyor determines that a boat is a constructive total loss, it typically means that the cost of repairing the boat exceeds its value. In such cases, marine insurers may offer the option to return the boat to the owner. It may hold sentimental value or have salvageable parts. There will always be owners out there who are happy to pour money into their boat. Sometimes the astronomical prices for boat repairs are the reason a boat is a write off. It’s almost always cheaper to scrap a boat than fix major issues. This is probably down to the time it takes to undertake any work.
Review Your Policy
The ethicality of this practice can vary depending on the specific circumstances and the terms of the insurance policy. It is essential for boat owners to carefully review their insurance policies to understand the provisions and options available to them in the event of a constructive total loss.
In some cases the boat is returned to the owner. It may be seen as a fair way to provide them with the opportunity to salvage any remaining value or sentimental attachments. However, it is recommended that boat owners consult with a professional insurance advisor or legal expert. They can provide specific guidance based on their individual situation and the laws governing marine insurance in their jurisdiction.
Pass On The Problem
It’s also important to remember that a boat can have significant cost to scrap that the owner might not be aware of. The insurance company will be looking to pass on the problem. The owner could be left with a big bill to dispose of the boat properly.
As an owner make sure you aren’t setting yourself up for a big disposal bill. There might not be the value left in your boat that you expect. Especially if it’s been fire damaged. The fire and smoke can really wreck a boat.
If you have a boat that is a CTL we would always recommend proceeding with caution. You may be offered the boat back for free. But it might be worth seeing what scrap bill you could be paying if you can’t complete the work.
