I thought I would follow up on some of the questions Larry had about insurance coverage for salvage under a marine insurance policy at last night's monthly meeting which featured an excellent presentation by Sea Tow of Freeport.
While most would assume that insurance for salvage falls under the insurance policy's liability section, it actually does not. Salvage is an acient concept attributed to the Phoenecians dating back to about 700 BC. It allows one who saves property in peril to get a piece (salvage award) of that saved property. Ordinarilly salvage awards are based on the six Blackwell factors, and typically range from a low of 5% of the value of the boat to a high of about 70%, but in practice rarely ever exceed 50%, and typically fall into the 10% to 40% range. Let's be honest though, if you have a $100,000 boat, coming up with $40,000 to pay for an uninsured salvage claim would not be good for any of our finances.
As a result the slavage claim falls under the hull coverage of your policy, so if all you carry is liabilty insurance or a property loss coverage rider to your homeowners insurance, you will not be covered for salvage.
Since a salvage award cannot, by definition, exceed the value of the vessel after the casualty, as long as you have market value coverage or agreed hull value coverage that is higher than market value, you will be fully insured for any claim of salvage against your boat.
Towing is not salvage; and unless your policy has a specific towing endorsement, towing is not covered under any policy of insurance.