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After a refit: does the sum insured move on its own?
Short answer
A refit changes what the boat is worth, and the figure on the schedule does not follow by itself. The gap between the two is where underinsurance begins, and it opens on the day the yard invoice is paid.
After a serious refit the boat on the pontoon is not the boat that was insured. A repower, new standing rigging, a fresh instrument fit at the chart table, a bow thruster, new upholstery and a sprayhood together can move the value by a third, and on a boat that was bought at the bottom of its depreciation curve they can move it by more than that. The sum insured does not move with the work. It sits in a contract that was agreed before the yard was booked, and nothing in the invoice folder changes it. That mismatch is a common reason an owner who has just spent heavily on a boat finds out at the worst possible moment that the figure on the schedule is now the ceiling.
Two things are worth keeping apart. Work that raises the value, such as a larger or newer engine, new rigging, added equipment or a cabin converted to a different purpose, raises what the boat would cost to replace and belongs in a letter to the insurer or the broker. Like for like maintenance does not: new standing rigging of the same specification replacing wire that has reached its age is upkeep, not improvement. The line between the two is not always sharp, which is exactly why a short written note is the cheaper route. Most wordings expect material alterations to be disclosed, and a broker who places the risk will want the same information before renewal rather than after a claim. Ask for the answer in writing even when it says that nothing changes.
Disclose the things that change the risk without changing the value, too. A more powerful outboard on the same tender, a move from a drying mooring to a deep water berth or from a club pontoon to a commercial marina, a change of cruising area, a switch to living aboard over the winter: underwriters treat those as facts about the risk, not as a valuation question. And keep the paperwork. Invoices, a rigging certificate, engine hours at handover and photographs taken through the refit are what establish months later that the value existed at all. After a large refit a written valuation by a surveyor is the usual evidence, and it costs a fraction of the difference it protects.
Worth remembering
The value
moves with the refit
The sum insured
stays where the contract left it
Underinsurance begins in that gap, on the day the yard invoice is paid.
Questions
What owners ask us about this
Does raising the sum insured cost more premium?
Where the price is calculated from the sum insured, yes. Set against a proportional reduction after a serious loss, the difference is usually small, and it is a figure known in advance instead of a deduction discovered at the end of a claim.
What counts as maintenance rather than an improvement?
Replacing something worn with an equivalent part is maintenance: rigging of the same specification, the same engine rebuilt, a new sprayhood on the same frame. Fitting something bigger, newer or additional is an improvement, and that is the case to report.
What about work I did myself?
Materials and documented labour both count, but self build work is hard to value after the event. Keep receipts, photograph each stage and note the hours as you go. Without that record only the materials tend to be recognised.
Who decides what the boat is worth now?
After a significant refit a surveyor's written valuation is the usual basis, and some wordings ask for one above a certain age or value anyway. Brokerage listings for the same model help far less, because they do not reflect the work that was done.
Related
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