A lot of those "cosmetic" damages come with significant mechanical damage as well though - and that's the kicker. Rail damage looks fairly easy to fix, until you have to rip apart the entire interior to get to the backside so you can do it.
The other thing is that the auction values have been astounding.
Consider a local example here. Hurricane Ivan sinks a 43 Hatt of roughly my boat's vintage (High Performance model.) Floods the boat up to the intakes; both engines go under, along with the genset, etc. The hull is holed as well.
The boat is totalled and the insurance company writes a check. Let's say it was insured for $200k (probably about right.)
The boat goes to the boneyard, and at auction fetches $70,000. Holed, with dead motors! I about shat - I was actually considering buying her if she had gone cheap - I might have paid $10, or even $20 - but once the bidding kept going, my mouth snapped shut and I watched slack-jawed as it kept going and going and going.
The guy who BUYS it pays to have the hull hotpatched, and THEN pulls the engines and has them rebuilt - "for real", out of the boat. He also reconditions the interior, etc.
Now from where I sit he got a HORRIBLE deal. He could have probably bought MINE for the money he has in this, and mine has never been sunk. In addition I bet he has a LOT of fun getting insurance on it now, given its history, AND if he sells it he has to disclose what happened or if its discovered later he'll get his butt sued off.
BUT - the insurance company really only wrote a check for $130k - not $200k. They didn't do as bad as it looks at first blush.
Boat/US's tactic this year in Florida has been to cut agreed values RADICALLY, in most cases to "LOW BOOK." In many cases even after a storm loss involving a sinking these boats will sell for close to that number at auction - especially for "names" like Hatteras.
What Boat/US has done is find a way to write insurance with very, very little ACTUAL monetary risk to them.
Consider that Hatteras. "Low Book" is probably $120k. If they get $70 at auction, they only really had $50,000 at risk. If their premium was $4,000 a year, if it happens once every 10 years they win big, especially when you figure the time value of money and their investment of the premiums received.
The law of averages say they win - the last big one here before Ivan was Opal - 9 years previous.
It indeed may become true in the not-so-distant future that the only insurance you will be able to buy as a recreational boater is liability. I actually considered this - buying a liability-only policy (they're cheap) and considering the hull value "my risk" - if I total it, I eat it. While this originally sounds stupid, the math on it isn't quite so simple - with the time value of the money I spend on hull insurance, I can actually afford to take a total loss once every 20 years or so and come out ahead......
But for the guy who needs to finance, its the end of the line. No bank will write a loan without coverage, and that'll be the end of it for a huge segment of the market.
I suspect, though, that when it comes to older boats like most of ours here, that many people do indeed pay cash......
