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Totalled boat question


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I'm sure some of you guys remember me saying I totalled my boat about a month ago.  Well, my insurance company is "maneuvering" in a way I am not familiar with.  Instead of them cutting a check directly to my lender (bank), they are attempting to go through a salvage company and make them part of the payoff process.  The salvage company has since sent me a limited power of attorney form and a release of financial information form to fill out, notarize and send back to them.  I have never dealt with a 'total loss' claim but this seems kinda fishy to me.  When I confronted my insurance adjuster about it he said that "is procedure and there is no way around it."  I don't totally believe him.  When I said I was going to get legal advice on the matter, he stammered and said that was a bit extreme.  That's when the red flag went up.  So, what I need to know from anyone here who has totalled a boat that was still under a loan, is what exactly was your process and what insurance company you dealt with.  I need all my ducks in a row on this one so any help from you guys is greatly appreciated.  Thanks again, guys.

dink

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I would not give anyone I did not know very well any kind of power of attorney. Ask your bank about it, they might be able to help you. If not I would ask an attorney.

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Guest ouachitabassangler

An attorney will ask "What does the policy say?" If there's no mention of the salvage route in the policy I'd go over the adjuster's head to the company he works for and get the straight of that from them IN WRITING on a company letterhead. The adjuster is trying to limit the payout from the insurance company by splitting up coverage and salvage. Before signing the power of attorney I'd get another letter (notarized) stating plainly you will owe the bank nothing above your deductible regardless of salvage value, unless the policy already says that. If he's reputable he ought to be happy to make you happy with that. It's fairly common practice, but I've seen some boat owners end up owing their bank due to the insurance company not agreeing on salvage value, especially with sailboats and houseboats that have a lot of high value equipment on board that is still serviceable. I remember one case here in which a salvager paid too little for tiles in a houseboat. The tiles were real marble from southern Europe, but they paid on the basis of cultured marble, a difference of thousands of dollars. Too bad. The salvager had power of attorney and was covered. The power of attorney enables the salvager to remove for sale useable parts from a boat in your name with the bank the lienholder. I agree, check with the bank. If they know the guy and or company policy they'll probably say you have to do it, but it's always a good idea for the lienholder to have a say in it since they actually own the boat. They won't want any delay in being paid off.  

Jim

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I'm sure all insurance companies differ on procedure.  But there should be no reason the salvage co. needs your financial info, period.  Even if the insurance co is trying to minimize the payout by claiming $XXX of salvage value, that difference should be made up by the insurance company, AFTER the lender has beed paid and the insurance co has the title to the boat.  The insurance co can't sell the boat or any salvage until the lien (title) has been released, of course this stuff varies a little bit state to state, due to variances in state laws.

I'd suggest talking to the bank first.  They have probably been through this before and can tell you how it works.  If they can't, I'd spend $100 for a consult with an attorney.

One other thing to consider... did you have any equity in the boat?  If the boat was worth say $10k and the payoff was $5k and salvage $2k, you should be entitled to the difference.  Also, was your poilcy for replacement (book) value or payoff only.  

Let us know how this works out.

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Guest ouachitabassangler

That would be a limited POA, like giving someone POA over your medical but not your finances. That POA would only pertain to the boat and not to finances in general. An example is a wrecked boat left on the ramp is supposed to be matched to a POA bearing boat ID if the owner isn't present to pick it up. Most owners leave them there to be picked up by salvage company workers. We don't let people haul dangerous things over governement property, willing to wait for a suitable carrier to come get it.

Jim

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Before signing the power of attorney I'd get another letter (notarized) stating plainly you will owe the bank nothing above your deductible regardless of salvage value, unless the policy already says that.

I've never owned a boat, let alone totaled one, but if it's anything like owning and totaling a car, this isn't necessarily true.  The insurance company pays you what it's worth, not what you owe.  What if you owe more on the boat than it's worth?

Let's say you buy a car for $20,000 with no money down.  Drive off the lot and you now own a used car worth $17,000.  Total it the next day, you'll get paid that $17,000, minus your deductible, but you still owe the bank $20,000.  That's what gap insurance is for.

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Thanks guys, this has been a big help for me.  I do have GAP ins. so the payoff I am not too concerned about.  I've also been told that the limited POA is not as serious as it sounds.  Yet, the financial release is still a sticking point with my adjuster and me.  I talked to the bank and "total loss department" really was not much help either.  I have also consulted an attorney and will be wrestling through this ASAP.  I'll put a post up when all is said and done and hopefully I won't have to criticize any insurance company :D.  Thanks again guys.

dink

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Dink, You made a good call when you contacted an attorney. While I'm no fan of this lawyer-infested, sue-crazy society we have become in this case you did the smart thing. I've seen far too many people get screwed on insurance claims, real estate transactions etc because they tried to do it on the cheap. A couple of hundred buck for a lawyer's advice and involvement is a steal compared with the potential financial loss. You tell them that this claim is going to be handled in a way that you are comfortable with or it will be done in front of a judge. When you are playing with snakes you have to beat them with a shovel.

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