Poll: Insurance

[READY2GO]

Certainly think you have a valid point. Just curious, as a hypothetical, what would you consider a reasonable percentage (not $ amount) of hull value for a premium to be?

Ted

I think for the Keys, 3 or 4 percent would be fair. 15% is beyond ridiculous.

Geico had an "Actual Cash Value" policy that they would sell me for $2,600. I had them send me a sample policy so I could read how the depreciation would be calculated in the event of a claim. They depreciate 10% per year after the boat is 20 years old with a maximum depreciation of 80%. My boat is 28 years old and thus would incur the maximum of 80%. So in the event of a major mishap of say $20K they would take $16K off the top, then deduct the $2K deductible leaving a payout of $2K, not even one years premium. This is borderline criminal to me.

I think the $200 a year for $300K of liability exposure is just as ridiculous only the opposite way. Way to large an exposure for such a small premium. I am a claims adjuster for an independent claims company so we work with a lot of different companies. See lots of stupid stuff. Nothing with an insurance company has to make sense. It just is what it is.

 

[ranger58sb]

Why would one need insurance on something they could easily afford to replace?

I'm amazed how many here are insuring their boats. Why?

Without regard to funding source or financing or whatever...

I, for one, can't "easily afford to replace" a few hundred thousand $$$...

I would suspect may of us can afford to buy a boat, but couldn't afford to buy a second boat (replacement) if the first one suffers catastrophic loss.

Maybe that's a related poll question: How many could afford to walk away from a catastrophic loss? How many could also fund a replacement?

Chris

 

[sdowney717]

I think for the Keys, 3 or 4 percent would be fair. 15% is beyond ridiculous.

Geico had an "Actual Cash Value" policy that they would sell me for $2,600. I had them send me a sample policy so I could read how the depreciation would be calculated in the event of a claim. They depreciate 10% per year after the boat is 20 years old with a maximum depreciation of 80%. My boat is 28 years old and thus would incur the maximum of 80%. So in the event of a major mishap of say $20K they would take $16K off the top, then deduct the $2K deductible leaving a payout of $2K, not even one years premium. This is borderline criminal to me.

I think the $200 a year for $300K of liability exposure is just as ridiculous only the opposite way. Way to large an exposure for such a small premium. I am a claims adjuster for an independent claims company so we work with a lot of different companies. See lots of stupid stuff. Nothing with an insurance company has to make sense. It just is what it is.

Is your risk adjusted according to location in FLA and hurricanes ?

We have Boat US insurance liability only, I think is at least $500,000 and costs us about $400 per year, that is it. Had to get surveyed years ago and I never dropped coverage.
Boat is in Seaford Va on Chisman creek part of the Chesapeake Bay.
No point having comprehensive for my boat built in 1970. If anything goes wrong with it, I just fix myself. I have never had a claim.

Our policy years ago was a lot less money, then got a letter saying due to all the hurricane payouts that upped their costs, they were upping our costs to compensate.

 

[BandB]

BandB,

Nothing wrong with that philosophy, but eventually you will loose and pay more premiums than you get in benefits, unless you're just an awful risk. I believe most of us want to be safe and take aggressive steps for that, and we will come out way ahead.

Yes, odds are heavy I will lose. I hope to lose. And, no, it has nothing to do with just my being a good or awful risk. It only takes one time of a marina fire started by someone else or of the bridge tender dropping the bridge before I've cleared it (yes, this did happen in our area a couple of years ago, millions of damage to the boat and the owner's insurance had to pay as the government entities fought over responsibility) or one bunch of drunks out at night ramming into my boat while it's at a transient dock.

I try to be safe and take aggressive steps, but I can't protect against every possible thing that can happen.

Let me ask you this. If your boat was a 78' Nordhavn that cost $4 million used, would you still feel the same, be willing to take the chance and play the odds?

I don't control the odds on the actions of others.

 

[Nomad Willy]

Hard to imagine one extended so far that they can't afford to loose their yacht.

 

[BandB]

Hard to imagine one extended so far that they can't afford to loose their yacht.

Just because one can afford it, doesn't mean one wants to subject themselves to that risk.

 

[dhays]

This is a hobby. Why would one need insurance on something they could easily afford to replace? If my boat burned and sank I just would not need to pay moorage anymore. And I could afford to replace the boat so I see no reason to carry insurance.

I'm amazed how many here are insuring their boats. Why? Probably because most are buying boats on credit and the banks require it. Can't relate to that either. That is buying boats on credit.

I understand the sentiment and generally agree with it. However, I have a loan on my boat simply because I didn't want to tie up that much cash. I also couldn't easily afford to replace the boat if it was severely damaged or sustained a total loss. Hence, I have it insured. At some point, I will drop the comprehensive but of course still keep the liability.

Insurance, of any kind, is there to protect us from losses that we can't afford or chose not to bare the risk ourselves. My house is insured, one car is insured. My commercial real estate is insured. Those are potential losses which would be tough to absorb.

 

[dhays]

BandB,



Nothing wrong with that philosophy, but eventually you will loose and pay more premiums than you get in benefits, unless you're just an awful risk. I believe most of us want to be safe and take aggressive steps for that, and we will come out way ahead.

I don't think you will find much disagreement there. Again, we insure against risk that we can't take, or chose not to take. If your dirtside house burned down, you could afford to find a place to live, but do you have fire insurance on your house anyway? If so, it is because it is a risk that you chose not to take. The same is true, at the moment, on my boat. I would be hurt financially if I needed to replace the boat. That means either I get out of boating, or I jeopardize my retirement.

Of course I will pay more in premiums than I will get back in paid claims! Only an idiot would hope for the opposite.

 

[BandB]

I don't think you will find much disagreement there. Again, we insure against risk that we can't take, or chose not to take. If your dirtside house burned down, you could afford to find a place to live, but do you have fire insurance on your house anyway? If so, it is because it is a risk that you chose not to take. The same is true, at the moment, on my boat. I would be hurt financially if I needed to replace the boat. That means either I get out of boating, or I jeopardize my retirement.

Of course I will pay more in premiums than I will get back in paid claims! Only an idiot would hope for the opposite.

The policy I most hope is a bad investment is life insurance. I hope to live well beyond the actuarial estimates they've used to determine what to charge me.

 

[ranger58sb]

Hard to imagine one extended so far that they can't afford to loose their yacht.

"Extended" has nothing to do with it.

Using B&B's earlier query to somebody, if your boat was a $4M 78' Nordhavn... free and clear ownership... would you be OK with a total loss?

That's similar to maybe being OK with tearing up and burning a $4M bill (if there were such a thing).

Happens I can't afford to do that but even if I could, I wouldn't want to take that risk...

I don't see the question as any different from home, auto, life, or health insurance. Our boat insurance doesn't have anything to do with "hobby" status, only with how much risk I'm willing to accept. On anything.

-Chris

 

[O C Diver]

My boat is insured for "agreed value ". Liability and hull premium cost less than 2% of the value. Do to choosing poorly when it came to parents, my cruising time probably won't be 15 years. Spending 30% on insurance seems a reasonable associated cost of owning the boat over that time. Hell, after repowering, I save more in the cost of fuel each year, than my insurance costs.

Ted

 

[Nomad Willy]

Dave wrote;
"Insurance, of any kind, is there to protect us from losses that we can't afford or chose not to bare the risk ourselves. My house is insured, one car is insured. My commercial real estate is insured. Those are potential losses which would be tough to absorb."

That's it. Buying any more insurance is a waste of money. And a boat being a toy it's loss should'nt change your lifestyle standard. If it did in my case I'd get a cheaper boat. And in my case I already have some.

 

[BandB]

That's it. Buying any more insurance is a waste of money. And a boat being a toy it's loss should'nt change your lifestyle standard. If it did in my case I'd get a cheaper boat. And in my case I already have some.

Wifey B: We value our toys highly. I'm a fan of toys. My car is far more a toy than our boats. It's now 4 1/2 years old and only got about 350 hours on the engine. That's a guess cause we don't have a hour meter on it nor do we do gph, but do know mpg. Let's see, if I can go 50 mph and get 20 mpg then that's oh...math isn't my thing but lets see...2.5 gph. Oh I should have converted all this to knots and nautical miles.

I waste money, but I don't consider insurance to be a waste. I sleep better knowing I have it. Somewhere I heard emotions criticized, but emotions are very important in life. I'd hate to be emotionless or in a world without emotions.

Some might say having many boats or many anchors is a waste of money. :lol:

 

[Larry M]

We also have an agreed value policy and our premiums are about 1.5% hull value. That includes some liability and pollution insurance. The annual insurance premium is budgeted. A total loss, without insuance is not. Taking a ~$200k is not budgeted. When we sell Hobo, her value is the down stroke for a condo/house or who knows an other boat.

 

[rwidman]

Dave wrote;
"Insurance, of any kind, is there to protect us from losses that we can't afford or chose not to bare the risk ourselves. My house is insured, one car is insured. My commercial real estate is insured. Those are potential losses which would be tough to absorb."

That's it. Buying any more insurance is a waste of money. And a boat being a toy it's loss should'nt change your lifestyle standard. If it did in my case I'd get a cheaper boat. And in my case I already have some.

Very few of us could absorb the cost of a liability claim for loss of life or permanent disability. Unless you have nothing to lose and no conscience, you shouldn't own a boat unless you carry liability insurance of a half a million dollars or more.

 

[cool beans]

. . .this has been a painful thread to keep up with

It looks like more than a few people are confusing "not having insurance" with "only having liability" when talking about being able to absorb a loss on a toy. I don't think anyone here is talking about spitting in the eyes of fate and risking themselves and surroundings without at least basic liability.

Those people talking about being able to walk away from a loss are talking about the value of their boat as it is. Not everyone here, and I'd venture to say most, don't have 6 figure boats we're afraid to lose. I have a cash value policy on my new to me bayliner as a compromise between liability and full coverage. I decided against full coverage since it was around 4% a year of what I payed for the boat. . .

 

[rwidman]

. . .this has been a painful thread to keep up with

It looks like more than a few people are confusing "not having insurance" with "only having liability" when talking about being able to absorb a loss on a toy. I don't think anyone here is talking about spitting in the eyes of fate and risking themselves and surroundings without at least basic liability.

Those people talking about being able to walk away from a loss are talking about the value of their boat as it is. Not everyone here, and I'd venture to say most, don't have 6 figure boats we're afraid to lose. I have a cash value policy on my new to me bayliner as a compromise between liability and full coverage. I decided against full coverage since it was around 4% a year of what I payed for the boat. . .

I'll bet there are more people out there without liability insurance than you might be thinking.

 

[cool beans]

I guess, but I can only pull from experience of boating in my area since I haven't been anywhere else, lol. All marinas here require a minimum of liability to dock and there are no moorings. . .I guess trailerable boats probably get away with no insurance?

 

[mbevins]

Hard to imagine one extended so far that they can't afford to loose their yacht.

Mr. Willy... Since you make this statement I assume you carry no coverage, what is the value of your boat? I suspect it's not multiple hundreds of thousands. I pay cash for all my toys, I've owned my boat for 18 years and even depreciated today is worth a substantial amount. Why would I possibly want to incur a financial loss if I don't have to. Overall insurance is cheap.

 

[BandB]

I guess, but I can only pull from experience of boating in my area since I haven't been anywhere else, lol. All marinas here require a minimum of liability to dock and there are no moorings. . .I guess trailerable boats probably get away with no insurance?

Just look at the poll. 3% said they carry no insurance. Based on what I've observed I believe the number with no insurance in the general boating population to be at least double that. The percentage of uninsured motorists in the US is 13% and in some states as high as 26%. Look at all those here who say marina's have never asked to see their policy. I don't know the real number but I do know I'm disturbed that boaters aren't required to carry liability insurance like they are in Australia, for instance.

 

[Nomad Willy]

WifeyBee wrote;
"I waste money, but I don't consider insurance to be a waste. I sleep better knowing I have it. Somewhere I heard emotions criticized, but emotions are very important in life. I'd hate to be emotionless or in a world without emotions.

Some might say having many boats or many anchors is a waste of money."

HaHa WB,
All my boats and anchors aren't worth more than my annual income. And I didn't criticize emotions. You've even ginen me some of them ... nawww just kid'in.
Actually a good question would be what percentage of one's net worth is the value of their boat? I'm at 10%. My newest car is only worth 12K. Don't have comp on it either.

Perhaps I should join the crowd .. sell Willy and get a NT 32. Probably will sell Willy and get a little motor home in a few years anyway. And I've had more thoughts about a smaller boat like an Albin 25. And I'll buy insurance when I need it. Waste of money when I don't.

 

[rwidman]

I guess, but I can only pull from experience of boating in my area since I haven't been anywhere else, lol. All marinas here require a minimum of liability to dock and there are no moorings. . .I guess trailerable boats probably get away with no insurance?

Not all boats are kept in marinas. Trailers, private docks, moorings and anchored are good examples.

 

[Alabama Boater]

Photos of why I have agreed value insurance

This is the F3 tornado that hit my marina about 3 years ago. The first photo is 2 docks with 35 boats in the jumble of iron. The second was our big dock wrapped around several boats. The last is the dry stack building. Many of the boats had no hull insurance or liability. The cost to salvage ... carefully cut the metal away was substantial and unless you had hull insurance there was a per boat assessment. Some could not pay and lost boat. My boat was lucky as I was in a lift about 1/4 down river putting in a new depth sounder or I would have been included. I did lose my on river town house as a total loss ... well insured. Sometimes it has nothing to do with other boaters.

 

[kev_rm]

Did insurance (product development not sales side) for a long time . Loss costs (what you get back) you should think about as 40%. 20% to agent 30% to administration 10% profit. Emotional benefits abound but not long term financial benefit. (Given average luck of the draw and not including fraud)

 

[Nomad Willy]

Mr. Willy... Since you make this statement I assume you carry no coverage, what is the value of your boat? I suspect it's not multiple hundreds of thousands. I pay cash for all my toys, I've owned my boat for 18 years and even depreciated today is worth a substantial amount. Why would I possibly want to incur a financial loss if I don't have to. Overall insurance is cheap.

mbevins,
I carry no comp. But have liability.
Boat's worth about 45K. Boat is paid for and we are retired. If the boat is a total loss I won't be trawlering anymore. But that will be the only change in my life. Oh and I'll not get the $300 bill for moorage anymore. And I'll get to do something new w my time.
You "incur" a financial loss every time you pay the insurance bill.

 

[mbevins]

mbevins,
I carry no comp. But have liability.
Boat's worth about 45K. Boat is paid for and we are retired. If the boat is a total loss I won't be trawlering anymore. But that will be the only change in my life. Oh and I'll not get the $300 bill for moorage anymore. And I'll get to do something new w my time.
You "incur" a financial loss every time you pay the insurance bill.

I guess that's why we have different thought processes. I'll agree that the value of your boat is pretty low. Those of us that have multiple hundreds tied up don't necessarily look at a couple boat bucks a year as a loss. It's really just one of the costs of business as they say.

 

[Nomad Willy]

mbevins,
Yes I recall a friend responding to another critisizing his rather large repair bill. Said he should get a newer car. My friend said of his bill .... "just the cost of doing business".

 

[FlyWright]

Hard to imagine one extended so far that they can't afford to loose their yacht.

For some of us, it's a hobby. For others, it's a lifestyle.

I'd sure hate to lose my lifestyle to an uninsured loss.

 

[BandB]

mbevins,
I carry no comp. But have liability.
Boat's worth about 45K. Boat is paid for and we are retired. If the boat is a total loss I won't be trawlering anymore. But that will be the only change in my life. Oh and I'll not get the $300 bill for moorage anymore. And I'll get to do something new w my time.
You "incur" a financial loss every time you pay the insurance bill.

The loss of my boating or part of my boating lifestyle would to me be far worse than the $45K. If a loss meant I couldn't do this anymore in the way I do today, then I consider that a huge loss.

Perhaps that's the difference. You're looking at it financially. I'm looking at it as an essential part of the life I love.

I'm also looking at replacing a boat as being a big outlay, even if I can afford, I don't want to experience.

 

[kev_rm]

I will add one other thing to my prior " you only get $0.40 on the dollar " point.. its possible you are far more likely to lose access to your boat (and boating lifestyle) for reasons other than your boat experiencing a covered property loss. Medical, accident, personal obligations, etc. ergo - money could be better spent hedging some of those possibilities in that case.

Also, if you are inclined, read some of Warren Buffett's letters to shareholders about how great of a business Geico is, and why. Good stuff. (And yes, that's actually a home page of a 400B US$ company)