4 ms·

An answer like this would need to refer to the policy provisions to really know, but I'm willing to bet the ship should is valued at Replacement Cost. Replaceme

An answer like this would need to refer to the policy provisions to really know, but I'm willing to bet the ship should is valued at Replacement Cost. Replacement Cost varies depending on the term of the policy, but the goal of the definition is to get the policyholder back to where they were before the accident (technical term is to indemnify the casualty). This definition typically looks like this: "We will pay the cost to replace a like kind and quality boat OR we will pay the cost to get your damaged boat back to operational state, whichever is cheaper for us." My guess is that the book value of the boat is $90M (what you would get if you sold the boat on the open market, representative of the present value of the asset's economic returns), but to actually build/repair that boat is cheaper. Insurance companies don't want to pay the book value because they aren't getting an economic return on the boat.

swores 3y ago
You're talking about how to value the boat owner making an insurance claim (if their policy does indeed match your assumption), whereas I was talking about (and the court filing is about) a different equation which calculates what the current value of the boat is. But I'd also hazard a guess that their insurance policy does not cover this accident for some reason - because if they know their insurance policy is about to turn the boat back to its $90M value then surely this court filing claiming its new lower valuation estimates would be fraud? Edit - actually the document does talk a bit about insurance on pages 10-11, but I don't think I understand it in the context of their claim lowering the value of the boat: "NOW, THEREFORE, in consideration of the premises, Stipulator, The Britania Steam Ship Insurance Association Europe, an entity organized under the laws of England and Wales, hereby undertakes in the sum of $43,671,000, with interest at the rate of 6% per annum thereon from April 1, 2024, that if judgment is awarded against either or both Petitioners, such judgment may be entered against both Petitioner(s) and Stipulator for the amount not exceeding the aforesaid sum and interest. Stipulator, The Britannia Steam Ship Insurance Association Europe, hereby submits itself to the jurisdiction of this Court in connection with this Stipulation and agrees to abide by all orders and decrees of the Court, intermediate or final, and to pay the amount awarded by the final judgment or decree rendered by this Court. If the final judgement or decree is appealed, Stipulator agrees to pay up to the principal amount of this undertaking, with interest at the rate of 6% per annum, unless Petitioner(s) pay such judgment or decree or, in the meantime, the amount or value of Owner's interest in the Vessel and its pending freight in connection with the voyage shall have been paid into Court by Petitioner(s) or a subsequent approved Stipulation for Value thereof shall have been given, in which case this Stipulation shall be void."

swores 3y ago

You're talking about how to value the boat owner making an insurance claim (if their policy does indeed match your assumption), whereas I was talking about (and the court filing is about) a different equation which calculates what the current value of the boat is. But I'd also hazard a guess that their insurance policy does not cover this accident for some reason - because if they know their insurance policy is about to turn the boat back to its $90M value then surely this court filing claiming its new lower valuation estimates would be fraud? Edit - actually the document does talk a bit about insurance on pages 10-11, but I don't think I understand it in the context of their claim lowering the value of the boat: "NOW, THEREFORE, in consideration of the premises, Stipulator, The Britania Steam Ship Insurance Association Europe, an entity organized under the laws of England and Wales, hereby undertakes in the sum of $43,671,000, with interest at the rate of 6% per annum thereon from April 1, 2024, that if judgment is awarded against either or both Petitioners, such judgment may be entered against both Petitioner(s) and Stipulator for the amount not exceeding the aforesaid sum and interest. Stipulator, The Britannia Steam Ship Insurance Association Europe, hereby submits itself to the jurisdiction of this Court in connection with this Stipulation and agrees to abide by all orders and decrees of the Court, intermediate or final, and to pay the amount awarded by the final judgment or decree rendered by this Court. If the final judgement or decree is appealed, Stipulator agrees to pay up to the principal amount of this undertaking, with interest at the rate of 6% per annum, unless Petitioner(s) pay such judgment or decree or, in the meantime, the amount or value of Owner's interest in the Vessel and its pending freight in connection with the voyage shall have been paid into Court by Petitioner(s) or a subsequent approved Stipulation for Value thereof shall have been given, in which case this Stipulation shall be void."