Insurance on a 40yo trawler?

[Seevee]

Self insuring is fine for taking on the risk of losing your boat. But what about the damage you cause to someone else's boat, like the rafted boats that broke loose and smashed AlaskeSeaduction's boat? And what about the mess you make when you sink your boat on some rocks and dump fuel all over the place like the tug n BC. Or what about the salvage and cleanup costs when you drag anchor and wash up in someone's front yard. We had this last example nearly happen his past fall. A guy has (had) a **** box of an old wood fishing trawler anchored in front of my house for the past year, in violation of the local anchoring and mooring laws. Big surprise, in a fall gale he dragged and grounded just down the shore. Fortunately the wind blew him that way or he would have been in my front yard. The guy had no insurance and no money, so we (the tax payers in town) got to pay the bill to drag this fu:$&k brains boat up on the beach and load it into dumpsters one excavator bucket at a time.

Bottom like, insurance is usually the only way to keep people from foisting their irresponsibility off on the rest of us. I have no interest in cleaning up any mess you leave behind. That's your job. But most uninsured peopl just walk away from it. A lot of places (as in the whole country) require liability insurance for boaters, and I'm in favor of that. Feel free to take on the risk of losing your boat, but don't stick me with your mess when you trash the place, or other people's property.

If one is worried about others, just get liability, it's relatively cheap. And if one can take the risk of liability on themselves, so be it. There's nothing wrong with that. For a liability claim, the plaintiff has to prove negligence. I could argue, just don't be stupid, however, if you mess up someone else or their property because of your stupidity, you should pay.

Insurance is just a risk/benefit decision. When you buy a policy, you're betting that you may use it, otherwise you wouldn't buy it. Most people over insure. There are MANY people that have done well without insurance for years without ANY incident at all.

And all of the above claims you mention above are nickel dime things that I'd for sure, self insure, except for a fuel spill. Once you get the EPA involved, the price gets ridiculous.

Overall, there is VERY little risk in boating, especially if one is a reasonably safe operator and takes good care of their vessel.

As for derelict boats, that's a problem, just as are derelict cars, houses and other junk. Yes, they should take care of their junk and not burden others for their stupidity. Don't know the answer. I take the same stand about forced Obama care. I don't like government handouts for ANYONE, boats, cars, houses, kids or health. We all need to pay our own way.

 

[Seevee]

That sounds very logical but that isn't what you're doing. By not having insurance you're giving up the coverage for a catastrophic situation. Insurance is really for those amounts we either couldn't afford to pay for or those we would not want to. If you are comfortable replacing the boat, then hull coverage may not be necessary. Unless you're comfortable paying $10 million, liability is definitely necessary.

BandB,

When is the last time you heard of a $10 million liability claim... or even $100K? Just not often and no sense in insuring against the almost impossible. You just can't insure against everything, and a lot of insurance does not make good financial sense.

 

[Seevee]

Another thing to think about with hull insurance... will the insurance company really pay the claim, or just fight you. Without it, you don't have to worry about it getting paid.

There have been TONS of situations where insurance companies just refuse to pay legitimate claims.. and a few execs went to jail. However, most just didn't pay and the policy holder had to sue or just do without.

 

[BandB]

BandB,

When is the last time you heard of a $10 million liability claim... or even $100K? Just not often and no sense in insuring against the almost impossible. You just can't insure against everything, and a lot of insurance does not make good financial sense.

There are claims in that range every day. Anytime there's a loss of life you see numbers like that. Both companies and individuals end up filing bankruptcy after losing huge claims. That's why I recommend a good umbrella policy, but the thing about umbrella policies is they don't insure you against things for which you have no insurance. They just insure above the limits of your existing policies.

Very large environmental claims are not unusual either. Paul Allen's Tatoosh was a multi-million dollar claim and cruise lines have had many. But people on small boats in the Virgin Islands have faced them as well.

Another type example. Kids on PWC's from a larger boat, run over a snorkeler. She is either seriously injured or dies. Boat owner faces multi-million dollar suit.

I strongly feel everyone should be required to carry some reasonable amount of liability insurance on a boat, just like they are on a car. Then if you can purchase a bond in an amount to get exempt from that requirement, fine. Some states do allow that on cars.

I don't like having to pay the part of my auto or boat insurance that is to insure against un-insured.

 

[BandB]

Another thing to think about with hull insurance... will the insurance company really pay the claim, or just fight you. Without it, you don't have to worry about it getting paid.

There have been TONS of situations where insurance companies just refuse to pay legitimate claims.. and a few execs went to jail. However, most just didn't pay and the policy holder had to sue or just do without.

The majority of times insurers settle claims promptly and reasonably. There certainly are cases where they don't, but most of the time those involve claims far greater than a typical boat claim and often they involve other conditions. Most people in simple auto or boat accidents who have insurance, bet prompt settlement. You're certainly correct about there being situations where there were problems however. That's an important factor to consider in selecting your insurer.

 

[twistedtree]

Are you sure about required insurance?

I am pretty sure NJ doesn't require insurance on a biat...car yes.

Anyone ..... what states require insurance to register?

Here is something on it....

"Q. What states require that I have insurance on my boat?

A.*No state requires boat owners to have insurance on a pleasure boat. If you have a loan using the boat as collateral, the bank will usually require insurance coverage on the boat. They will also require to be listed as a loss payee which protects their interest in the event of loss to the boat. Some marinas will require the boat owner to carry liability insurance and the marina may also require they be named as an additional insured."

Boat Insurance Frequently Asked Questions

I worded my statement poorly. I meant that there are countries that require liability insurance on pleasure boats.

I'm not aware of an US state that does. I don't think anyplace in Canada does either.

 

[AusCan]

No mandatory boat insurance required in Australia. (except to stay in most marinas)

One of the marinas I often stay in requires proof of minimum $10 million liability coverage. I agree it is excessive, although if your boat catches fire and lights up others, i and there's loss of a life or two .....

To increase coverage to 10M from the standard 2M was only about 40 bucks a year extra.

 

[twistedtree]

Actually, by paying your premiums and never filing a claim, you are effectively doing the same thing. Even if you do, just like your tax dollars did, you are basically spreading the cost of stupidity except this way you are lining the pockets of a lot of execs too. Just sayin'

Kind of. Yes, it gets spread among boaters paying premiums. But the 90% rest of the population doesn't pay.

 

[BandB]

No mandatory boat insurance required in Australia. (except to stay in most marinas)

One of the marinas I often stay in requires proof of minimum $10 million liability coverage. I agree it is excessive, although if your boat catches fire and lights up others, i and there's loss of a life or two .....

To increase coverage to 10M from the standard 2M was only about 40 bucks a year extra.

The vast majority of marinas worldwide require it.

 

[AusCan]

The vast majority of marinas worldwide require it.

There is only one marina in Australia that I know of that requires 10M liability coverage. My insurance company was shocked when I asked them for that much coverage. In any Mediterranean country I cruised 2M was enough.

However, yes I would expect the US marinas to require a large liability coverage.

 

[BandB]

There is only one marina in Australia that I know of that requires 10M liability coverage. My insurance company was shocked when I asked them for that much coverage. In any Mediterranean country I cruised 2M was enough.

However, yes I would expect the US marinas to require a large liability coverage.

I meant they require liability. It's not $10 million with most.

 

[danderer]

Interestingly enough (at least to me) I've never been asked about insurance, either by my my home marina or by any we've visited in the Mid-Atlantic.

 

[danderer]

As to liability insurance, I buy it to protect my assets. Sure, I've never done anything stupid, and don't intend to nor plan to. Then again no one ever plans to..

But another reason I buy it is to get the insurance company into bed with me defending any claim that might arise. If I should be sued, frivolous or not, it would be a major expense to defend that claim.

Carrying significant insurance, either directly or via an umbrella policy, raises the attention level of the insurance company.

Example: You're sued for $2M. Maybe it is a bogus claim. If you've got a $250K liability limit the insurance company might conclude that it'd be simpler and cheaper just to pay their $250K than to try to defend. That leaves you to defend against or pay a $1.75M claim--bogus or not.

If you've got several $M in coverage, the insurance company is much more likely to invest in defending against that claim. And liability insurance is relatively cheap.

(..I learned this growing up in a household where my father was an EVP of one of the largest property casualty insurers companies in the US.)

 

[Seevee]

There are claims in that range every day. Anytime there's a loss of life you see numbers like that. Both companies and individuals end up filing bankruptcy after losing huge claims. That's why I recommend a good umbrella policy, but the thing about umbrella policies is they don't insure you against things for which you have no insurance. They just insure above the limits of your existing policies.

Very large environmental claims are not unusual either. Paul Allen's Tatoosh was a multi-million dollar claim and cruise lines have had many. But people on small boats in the Virgin Islands have faced them as well.

Another type example. Kids on PWC's from a larger boat, run over a snorkeler. She is either seriously injured or dies. Boat owner faces multi-million dollar suit.

I strongly feel everyone should be required to carry some reasonable amount of liability insurance on a boat, just like they are on a car. Then if you can purchase a bond in an amount to get exempt from that requirement, fine. Some states do allow that on cars.

I don't like having to pay the part of my auto or boat insurance that is to insure against un-insured.

BandB,

The numbers just don't dictate $10MM lawsuits daily. There's just not enough of them. There's 626 fatalities per year in the US. That mean's half would have to file that $10mm suit. Now eliminate the ones that killed themselves, and the ones that are family and just don't sue, and the ones that aren't worth that much.

You can also choose to reduce your risk dramatically from a fatal accident by preventing the four big reasons for deaths....Alcohol use, Operator inattention (71%) Operator inexperience, and Excessive speed. And there's a lot of other things you can do to reduce risk.

But nothing is foolproof 100%. You could hit a boat full of college kids and end up with a 50mm lawsuit... the attorney will argue that each one of them is worth 10mm, so why don't you get 50mm worth of insurance?

You can also do a lot of things to protect your assets, especially against frivolous lawsuits.

There IS an argument to not have really high limits, as you become a target for the high priced litigators and they'll go after all of it. I had a friend that hit a bum lying on the highway (who was already dead). The platiff went after the whole thing and got a sizable award. My friend wasn't even guilty (also proven), but there was a lot of $ out there so the high priced team went after it.

I also had a friend worth several million. Had a tenant burn himself to death in an uninsured mobile home he owned. However, the lawyers couldn't find anyone to sue, didn't know he existed and there was no lawsuit. My friend just did a good job of asset protection.

Yea, I'm all for not requiring insurance, but folks should still be responsible for their actions. If there should be a law, it should be to prevent frivolous law suits.

As for insurance, if appropriate for your operation, get it. There is a strong argument for some liability to at least pay for the defending attorney.

 

[Seevee]

There is only one marina in Australia that I know of that requires 10M liability coverage. My insurance company was shocked when I asked them for that much coverage. In any Mediterranean country I cruised 2M was enough.

However, yes I would expect the US marinas to require a large liability coverage.

I've never been asked for insurance at any marina. And the fact that your insurance company was shocked might tell you that it's unusually high?

 

[Art]

Far as I've learned... If you can withstand financial loss of the boat itself, then that portion of insurance cost disappears and it is usually a pretty expensive portion of the annual bill. But - unless you are really flush with all kinds of available cash you better have all the other insurance sectors in force and covering your boat. Cauz... if our boats start a fire that affects other things, or sinks and leaks much fuel... can we spell expensive!!

 

[BandB]

Far as I've learned... If you can withstand financial loss of the boat itself, then that portion of insurance cost disappears and it is usually a pretty expensive portion of the annual bill. But - unless you are really flush with all kinds of available cash you better have all the other insurance sectors in force and covering your boat. Cauz... if our boats start a fire that affects other things, or sinks and leaks much fuel... can we spell expensive!!

Insurance is a combination of several factors in determining whether to have it or not.

1. Am I legally required?
2. Am I required by someone else? Marina, Landlord, Bank, etc.
3. Am I financially required, meaning I could not absorb losses above a certain amount? And, can I absorb them without severely impacting my life?
4. Am I emotionally required? Meaning I'd create stress in my life by not having it. This also includes what I believe to be my obligation to protect others against loss caused by me. Even in some cases it's protecting your heirs.

 

[Panhandler]

All, thanks for all the feedback. We insured with Doug Pike of Anchor Marine through a Lloyds company. I highly recommend Doug if you ever shop or change policies.

 

[READY2GO]

All, thanks for all the feedback. We insured with Doug Pike of Anchor Marine through a Lloyds company. I highly recommend Doug if you ever shop or change policies.

I would read your policy very carefully. Lloyds at least in home owners insurance is a last resort insurer. I hate handling their claims. Very slow and don't like to pay. Maybe the marine division is different but I would be very careful. My $ .02 as a claims adjuster.

 

[BandB]

I would read your policy very carefully. Lloyds at least in home owners insurance is a last resort insurer. I hate handling their claims. Very slow and don't like to pay. Maybe the marine division is different but I would be very careful. My $ .02 as a claims adjuster.

I've dealt with Lloyd's for 25 years and never had a problem with them. In the marine side of things they are not a last resort insurer by any means. (Technically they aren't the insurer but ignore that aspect for now). We insured buildings in Jamaica through them because other insurers would be low one year and then triple and quadruple the rate the next. They would stay with us regardless of hurricanes or floods that hit the island.

In most states of the US they are a surplus lines insurer. That does mean they aren't subject to the same rules so one does need to know what they're doing when insuring through them. We have our homeowner's and flood insurance through them.

Clearly your experience has been different than ours. However, they do have a good reputation as a marine insurer.

 

[Insequent]

Apart from marina requirements we have a mandatory Queensland State requirement as noted below:

​

All recreational ships more than 15m but less than 35m in length must have an insurance policy that provides A$250,000 for pollution clean up and A$10,000,000 for salvage and wreck removal.

Smaller boats don't need it, and for larger boats the amount of pollution cover required increases.

The $10m liability coverage is pretty standard in these parts. It is included in my 'hull insurance' and the total rate is 1.08%.

It is 'market value', but there is also a value stated in the policy which seems contradictory. It is the valuation used for GST/Import Duty assessment, made by a certified marine valuer. The boat is 35 years old.

For boats >50' you also need an inspection by the authorities to obtain State registration. In my case a photo was enough. The inspection and insurance requirement are to avoid situations where a dreamer buys an old commercial vessel that is well past its 'use by date' for almost no cost with plans to anchor it in a nice spot and make it a liveaboard. The State has had to deal with a few that have sunk, so are taking precautions. I'm fine with that.

 

[BruceK]

Lloyds is not an insurance company in the normal sense. A group of individuals, known as "names", band together to take on a risk. When it comes to claims, while I imagine there are syndicate managers with some powers, you may need them all together to make decisions.I encountered inflexibility and inability to make decisions quickly, even as the new information emerged and advantageous times to settle came and went. Give me a local insurer "with skin in the game".

 

[BandB]

For boats >50' you also need an inspection by the authorities to obtain State registration. In my case a photo was enough. The inspection and insurance requirement are to avoid situations where a dreamer buys an old commercial vessel that is well past its 'use by date' for almost no cost with plans to anchor it in a nice spot and make it a liveaboard. The State has had to deal with a few that have sunk, so are taking precautions. I'm fine with that.

Florida has had some of those. Marinas were stuck with a couple so their way out of having to deal with them was to sell them for $1 or $10 to someone on the conditions that they remove them from the marina. One got less than 500 yards. Others have been sold under similarly bad situations by owners to get out of any obligations.

 

[tinroof]

When all else fails, turn to Lloyds. I've found that so often to be the case in business over the years.

Now a good marine broker may well find someone else offering a good deal, but Lloyds is a fall back. They are the largest surplus lines insurer in the US.

Do you have contact info for them please?

 

[tinroof]

Apart from marina requirements we have a mandatory Queensland State requirement as noted below:

​

All recreational ships more than 15m but less than 35m in length must have an insurance policy that provides A$250,000 for pollution clean up and A$10,000,000 for salvage and wreck removal.

Smaller boats don't need it, and for larger boats the amount of pollution cover required increases.

The $10m liability coverage is pretty standard in these parts. It is included in my 'hull insurance' and the total rate is 1.08%.

It is 'market value', but there is also a value stated in the policy which seems contradictory. It is the valuation used for GST/Import Duty assessment, made by a certified marine valuer. The boat is 35 years old.

For boats >50' you also need an inspection by the authorities to obtain State registration. In my case a photo was enough. The inspection and insurance requirement are to avoid situations where a dreamer buys an old commercial vessel that is well past its 'use by date' for almost no cost with plans to anchor it in a nice spot and make it a liveaboard. The State has had to deal with a few that have sunk, so are taking precautions. I'm fine with that.

Are you insured to travel the world? Do you need to be a resident to get this coverage?

 

[BandB]

Do you have contact info for them please?

You are responding to a post made in 2016. The marine market has changed since then and Lloyd's has jettisoned a big part of their business in it. However, to contact them, you find a broker in your country who works with them and go through that broker.

 

[Insequent]

Are you insured to travel the world? Do you need to be a resident to get this coverage?

I'm insured with Club Marine, one of the better (if not the best) boat insurer in Australia. Their parent is Allianz. My coverage is 250nm from Australia or New Zealand at present. That meets my needs. Were I to travel to NZ, 1200 nm and not a trivial undertaking, I would need an extension to cover the trip across.

 

[The Brockerts]

As just a general comment on insurance as I just insured a 1990 48 foot Californian. If you want to have an in depth discussion about insurance and get a layman's understanding, check in with Peter- Marine Insurance Guru & tuna fishing addict that is part of our forum. I can't talk to his fishing abilities but on the insurance side of things he is first class. I had several discussions with him before signing up to make sure my insurance plan matched my dreams of floating away.

The Brockerts

 

[tinroof]

would love to talk to him. If only I could figure out how to PM on this forum... seems all communication is public

 

[Insequent]

would love to talk to him. If only I could figure out how to PM on this forum... seems all communication is public

PM is easy here. One way to get started is to click on "Quick Links" in the menu bar, then look down the list. Private Messages is the first item under "Miscellaneous". Click on it and you should be able to sort out the rest.