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Old 09-30-2018, 10:44 AM   #1
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Insurance Question

Hi everyone. I recently requested a quote from BoatUS for insurance for a mid 30 foot size boat slipped in Northern California.


I quoted the price I thought the boat should go for and the location, standard insurance questions (12 years experience boating, no losses/claims, no driver issues currently, no tickets, etc). I received the following general terms:


-Commercial Towing and Assistance- Each Incident TowBoatU.S. /$3,000

-Boating Liability (Protection and Indemnity): Liability Limit Each Accident, Bodily Injury and Property Damage $100,000

-Fuel and Other Spill Liability- Limit Each "Accident" $939,800

-Longshore and Harbor Workers' Compensation- Limit of Liability Statutory

-Medical Payments- Limit Per Person Each "Accident" $1,000

-Uninsured Boater- Limit Each "Accident" $100,000

-Ice and Freeze Coverage- Included


Is this s typical marine insurance policy on a mid 30's size trawler or cruiser? I'm using the asset as a 1 or 2 day "stay on board" base of operations in slip, more than a traveling machine, a few times a month. Though I plan on going out for a day or two once a month. No where particularly demanding, interior bay cruising to be more specific.


The deductible seemed reasonable but what has me wondering is the medical payment each person at only $1000. You can't even check into an ER for a hang nail for that these days. I'm not looking to throw money away on bloated policies but what do you guys think? I'll be placing the boat in a Corp for liability but I'm also thinking about an occasional passenger and what they would be covered for if the unexpected happened.


Also, unrelated, but I received an "agreed hull value" on the policy that was less than I asked for, in the quote. I assume this is probably an industry valuation that says they believe the average condition of this make and model and that year is X dollars. Would that be right?


And there is always the fine print. There is a note about depreciation - "Depreciation applies to all partial losses and will be calculated at 10% for each year beginning with the 20th year of manufacture with a maximum of 80%. Depreciation applies to parts and material, not labor." This seems like if there was damage to my boat, and it was a 10,000 repair, is this going to effect that claim? Or - is this a "total loss" clause where my agreed hull value would not be paid and instead some sort of depreciated amount would be paid? I'm looking at a 20 year old boat so this would be somewhat an issue if the worst happened. Not a deal breaker but I'd like to know before hand what that implication was and either be at peace with it or look for another policy.


Many thanks for your experiences and ideas!
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Old 09-30-2018, 12:59 PM   #2
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Welcome Eddie to TF. Looks pretty much typical. I just switched companies. You can increase the deductible and other coverage.
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Old 09-30-2018, 01:39 PM   #3
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Originally Posted by Eddie P View Post

-Commercial Towing and Assistance- Each Incident TowBoatU.S. /$3,000

-Boating Liability (Protection and Indemnity): Liability Limit Each Accident, Bodily Injury and Property Damage $100,000

-Fuel and Other Spill Liability- Limit Each "Accident" $939,800

-Longshore and Harbor Workers' Compensation- Limit of Liability Statutory

-Medical Payments- Limit Per Person Each "Accident" $1,000

-Uninsured Boater- Limit Each "Accident" $100,000

-Ice and Freeze Coverage- Included
!
Welcome aboard TF

I have a BoatUS policy on a 34 Mainship and it is similar w/ a few differences I noticed

My medical is 10,000 - actually I thought that was fairly standard and my first reaction was maybe your 1,000 was a typo.

My towing is $250 but I'm covered for Great Lakes - you can elect different levels of towing all the way up to unlimited I believe.

My Deductible is 5% of declared value - again you can elect different levels

The deductible declines 25% / for each yr w/o a claim and it doesn't go back up if you change your deductible. So if you want a low deduct now in future years you can raise the deduct and the declining% takes it back down.

You can call Boat US Ins and an underwriter will go thru alternatives with you and let you know how much difference it will make in the premium.
I've found them very helpful and knowledgeable re: boats and their policies.

Here is the BoatUS Ins website that outlines your question re depreciation

The depreciation relates to partial loss / repairs not to a total loss.
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Old 09-30-2018, 02:45 PM   #4
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Thank you Don! And thanks Alaskan! A call is likely in order to chat about alternatives. I figured I'd go that route as well but with all the knowledge here, knowing what questions to ask can make all the difference.


Appreciate any more thoughts if they come up.
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Old 10-01-2018, 05:40 AM   #5
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Are you familiar with an umbrella liability policy?

They take your insurance liability policies and raise the liability limit to a significantly higher amount. There is a minimum level that each policy has to have before the umbrella can raise it. As an example, mine covers vehicles, homes and boats. It raises the liability limit into the millions.

Before you say you don't need that kind of coverage, if someone steals your boat and accidentally damages or sinks another boat in the process, you are liable. Nobody likes to pay insurance; nobody wants to write a BIG check for an accident they didn't cause either. $100,000 of liability insurance for boating is next to nothing.

Ted
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Old 10-01-2018, 10:24 AM   #6
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Ted,

I'd be surprised that one would be liable if their boat was stolen and crashed into a party boat full of kids. There was no negligence unless the owner handed the thief the keys and pointed to the party boat.

And that's where the corp, LLC or trust comes in. The only liability, if any, would be a claim against the assets of the entity, but again I'd bet my bottom dollar that it would be zero.

Now, if YOU'RE the operator, the corp won't protect you and that's where the good liability policy comes in.

I've seen the above in action time and time again in the real estate business. Neighborhood kid drowns in your rental house with the pool. It that really your fault? If you set thing up right, you have little risk. Same with a boat.

(not an attorney, no advise given and this may or may not be good or valid info.... just slept in the Holiday Inn last night...)
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Old 10-01-2018, 05:49 PM   #7
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Quote:
Originally Posted by Eddie P View Post
Hi everyone. I recently requested a quote from BoatUS for insurance for a mid 30 foot size boat slipped in Northern California.


I quoted the price I thought the boat should go for and the location, standard insurance questions (12 years experience boating, no losses/claims, no driver issues currently, no tickets, etc). I received the following general terms:


-Commercial Towing and Assistance- Each Incident TowBoatU.S. /$3,000

-Boating Liability (Protection and Indemnity): Liability Limit Each Accident, Bodily Injury and Property Damage $100,000 Too low

-Fuel and Other Spill Liability- Limit Each "Accident" $939,800 Standard

-Longshore and Harbor Workers' Compensation- Limit of Liability Statutory

-Medical Payments- Limit Per Person Each "Accident" $1,000 Too low

-Uninsured Boater- Limit Each "Accident" $100,000 Too low

-Ice and Freeze Coverage- Included


Is this s typical marine insurance policy on a mid 30's size trawler or cruiser? I'm using the asset as a 1 or 2 day "stay on board" base of operations in slip, more than a traveling machine, a few times a month. Though I plan on going out for a day or two once a month. No where particularly demanding, interior bay cruising to be more specific.
There is not really a "standard" or "typical" policy. Each policy is a boilerplate that is tailored to the insured's needs.


The deductible seemed reasonable but what has me wondering is the medical payment each person at only $1000. You can't even check into an ER for a hang nail for that these days. I'm not looking to throw money away on bloated policies but what do you guys think? I'll be placing the boat in a Corp for liability but I'm also thinking about an occasional passenger and what they would be covered for if the unexpected happened.
MedPay on a marine insurance policy is a "no fault" type of coverage- that is, liability need not be assigned for this coverage to take effect. If an accident happens and a passenger is injured, the MedPay coverage is immediate coverage while liability is assessed. A personal example- my ex brother in law and I were fishing about 20 miles of San Diego. He caught a small blue shark- I told him to wait till I got the dehooker out. H decided to grab the shark by the tail, and it whipped around and bit him between the thumb and forefinger. Total bill was around $5k, paid by my vessel insurance policy.


Also, unrelated, but I received an "agreed hull value" on the policy that was less than I asked for, in the quote. I assume this is probably an industry valuation that says they believe the average condition of this make and model and that year is X dollars. Would that be right?
Legally speaking, the AV on a marine policy is to protect your fiscal interest in the vessel. So, if you paid $30k for the vessel, and added $5k of electronics, you can insured the vessel for $35k. When a value is stated without substantiation, we (as underwriters) look to the market as well as sold boats in the area the vessel is located.


And there is always the fine print. There is a note about depreciation - "Depreciation applies to all partial losses and will be calculated at 10% for each year beginning with the 20th year of manufacture with a maximum of 80%. Depreciation applies to parts and material, not labor." This seems like if there was damage to my boat, and it was a 10,000 repair, is this going to effect that claim? Or - is this a "total loss" clause where my agreed hull value would not be paid and instead some sort of depreciated amount would be paid? I'm looking at a 20 year old boat so this would be somewhat an issue if the worst happened. Not a deal breaker but I'd like to know before hand what that implication was and either be at peace with it or look for another policy.
What you ask depends on the type of policy you have. On an all risk, agreed value policy, the settlement for a total loss will be the value shown on the dec page without depreciation or deductible. On a partial loss, depreciation will be factored in per the policy language. So, based on the above, the 20 year old vessel would have depreciation factored in for a partial loss starting with year 21.


Many thanks for your experiences and ideas!
My thoughts in red above...

In short, I am a firm believer that the liab coverage should $300-$500k at a minimum and medpay at $5k minimum.

ALWAYS look at coverage first, premium second. I am assisting a friend whose boat sank recently on understanding his coverages, and he is finding out he is not covered as he thought he was. Cheaper is not always the way to go...
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Old 10-01-2018, 06:09 PM   #8
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we are still searching for our first boat. we have put ourselves it a position to make it happen sooner than later. while speaking with the owner of 1974 GB42, i offhandedly inquired about his yearly premium, he said $5000.00. i was somewhat
taken back. does this sound "average"??
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Old 10-01-2018, 06:11 PM   #9
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The liability seems very low. My marina, and the one where I previously kept my boat for two years require $300,000, and a yacht club where I have stayed wants $500,000.
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Old 10-01-2018, 06:18 PM   #10
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Originally Posted by binnewater View Post
we are still searching for our first boat. we have put ourselves it a position to make it happen sooner than later. while speaking with the owner of 1974 GB42, i offhandedly inquired about his yearly premium, he said $5000.00. i was somewhat
taken back. does this sound "average"??
Again- there is no such thing as an "average" premium.

Each policy is unique to the insured-
  • Vessel age
  • Vessel fuel type
  • Navigation area
  • Power or sail?
  • Inboard, outboard, stern drive, or pods?
  • Gas or diesel?
  • Vessel speed
  • Hull material (wood, metal, glass, cement, exotic)
  • Monohull or cat/tri hull?
  • Insured's age and boating experience (ownership and operational)
  • Insured's credit score
  • insured's location relative to the vessel
  • mooring location
  • and much, much more.

On the exact same boat, 2 people will have varying premiums based on the human component.
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Old 10-01-2018, 06:48 PM   #11
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Agree with previous statement to look into umbrella. You need to consider your net worth as well and risk of that given a mishap.
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Old 10-01-2018, 06:54 PM   #12
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Just remember- liability umbrellas generally don't cover pollution and other marine specific incidents (salvage, Jones Act, etc).
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Old 10-01-2018, 08:41 PM   #13
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Quote:
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Ted,

I'd be surprised that one would be liable if their boat was stolen and crashed into a party boat full of kids. There was no negligence unless the owner handed the thief the keys and pointed to the party boat.

And that's where the corp, LLC or trust comes in. The only liability, if any, would be a claim against the assets of the entity, but again I'd bet my bottom dollar that it would be zero.

Now, if YOU'RE the operator, the corp won't protect you and that's where the good liability policy comes in.

I've seen the above in action time and time again in the real estate business. Neighborhood kid drowns in your rental house with the pool. It that really your fault? If you set thing up right, you have little risk. Same with a boat.

(not an attorney, no advise given and this may or may not be good or valid info.... just slept in the Holiday Inn last night...)
Most people with little assets don't get sued. If you have assets and your boat is involved, there's a good chance your going to get sued. All it takes is a lawyer and a sympathetic jury to rule against a perceived "wealthy white guy ". The issue isn't whether you're ultimately successful, the issue is paying for your legal defense and possibly the claim.

Had a friend recently go through this with his son and a car accident. Son hit a pedestrian and was found 100% at fault. Insurance company saw it as a no win situation and agreed to pay 100% of the policy to the victim, which didn't cover all of the medical, lost wages, and not to mention "pain and suffering ". Cost my friend 5 figures in legal fees to avoid a liability lawsuit against him and his wife. He's now a believer of umbrella liability policies.

Ted
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Old 10-01-2018, 08:47 PM   #14
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If an Umbrella won’t cover some of the marine related events, then isn’t it safer to stay with a typical marine policy? Or, are you doing both?
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Old 10-01-2018, 09:18 PM   #15
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My thoughts in red above...

In short, I am a firm believer that the liab coverage should $300-$500k at a minimum and medpay at $5k minimum.

ALWAYS look at coverage first, premium second. I am assisting a friend whose boat sank recently on understanding his coverages, and he is finding out he is not covered as he thought he was. Cheaper is not always the way to go...
Totally agree. Now, as to the depreciation on partial losses, that can be very dangerous. Often you must replace old with new and if parts are depreciated then that becomes very expensive.

Another set of clauses to look for are protection against latent defects and exclusion of any implied warranties of seaworthiness.
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Old 10-01-2018, 09:23 PM   #16
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If an Umbrella wonít cover some of the marine related events, then isnít it safer to stay with a typical marine policy? Or, are you doing both?
An umbrella is designed to cover excess on anything you're insured for. Like other policies isn't important to read the specifics. But you would obtain it to cover all boating exposure that you're insured for but need more coverage for. Now, if you don't have coverage in your marine policy, then the umbrella isn't likely to cover. It comes into play when the limits of other policies have been reached.
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Old 10-01-2018, 09:32 PM   #17
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If an Umbrella wonít cover some of the marine related events, then isnít it safer to stay with a typical marine policy? Or, are you doing both?
The way the umbrella works is that it's the second policy. You have to have the normal policy and the second one comes into play after the limits of the first are used up. The policies are usually extremely reasonable as it's rare to have an insurance liability claim, and much rarer for it to exceed the liability limit of the first policy. My multi million dollar umbrella is significantly less than $1,000 annually. My trawler is less than $100 of that premium. My boat insurance policy on the trawler has either a $300K or $500K liability limit (I don't remember which).

Ted
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Old 10-01-2018, 10:00 PM   #18
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Here is what my insurance amounts for a 2014 Swift Trawler 44 in San Francisco Bay Area look like.


-Commercial Towing and Assistance- Each Incident TowBoatU.S. /$2,000

-Boating Liability (Protection and Indemnity): Liability Limit Each Accident, Bodily Injury and Property Damage $500,000

-Fuel and Other Spill Liability- Limit Each "Accident" $939,800

-Longshore and Harbor Workers' Compensation- Limit of Liability Statutory

-Medical Payments- Limit Per Person Each "Accident" $25,000

-Uninsured Boater- Limit Each "Accident" $500,000

-Ice and Freeze Coverage- Included (n/a)

Furthermore, in addition to coverage in the amount of the value of the boat, I also have "Personal Effects" coverage in the amount of $10,000.

Hope that helps!
Mike
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Old 10-01-2018, 11:52 PM   #19
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Here is what my insurance amounts for a 2014 Swift Trawler 44 in San Francisco Bay Area look like.


-Commercial Towing and Assistance- Each Incident TowBoatU.S. /$2,000

-Boating Liability (Protection and Indemnity): Liability Limit Each Accident, Bodily Injury and Property Damage $500,000

-Fuel and Other Spill Liability- Limit Each "Accident" $939,800

-Longshore and Harbor Workers' Compensation- Limit of Liability Statutory

-Medical Payments- Limit Per Person Each "Accident" $25,000

-Uninsured Boater- Limit Each "Accident" $500,000

-Ice and Freeze Coverage- Included (n/a)

Furthermore, in addition to coverage in the amount of the value of the boat, I also have "Personal Effects" coverage in the amount of $10,000.

Hope that helps!
Mike
Do you have an umbrella policy to cover liability above those amounts?
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Old 10-01-2018, 11:54 PM   #20
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Do you have an umbrella policy to cover liability above those amounts?
I do not.
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