Who owns the wreck once the insurer pays?

On a total loss the sum is rarely as simple as expected. The insured value is indemnified, and from it the salvage value is normally deducted, that is, whatever the damaged boat is still worth. And that is where the trap lies: if the salvage value is deducted, the wreck remains your property. You get less money and keep a problem.

A wreck is not something you can simply leave. The owner carries the duty to remove and dispose of it properly, and a GRP hull is expensive to dispose of. A harbour or an authority can require removal, including years later. The apparent credit for the salvage value can therefore turn into a net burden.

So on a total loss always work through both routes. First: is the salvage value deducted, and how was it determined? A notional salvage value with no actual buyer is realistic only if you can actually sell the wreck at that price. Second: can you instead hand the wreck to the insurer? Some wordings provide for that. Ours does not: the achievable residual value is set off, and you cannot avoid that by leaving the remains to the insurer. What our hull cover does include is wreck removal ordered by an authority, in Basis up to the sum insured, in Basis Plus up to 1 million euros and in Premium up to 2.5 million euros.

Worth remembering

With the wreck comes the disposal. Whoever accepts the salvage value buys it along with it.