View Poll Results: Insurance Coverage
Liability Only 3 10.71%
Full Coverage 25 89.29%
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Old 09-10-2019, 03:12 PM   #1
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Liability only or full coverage

Getting ready to renew our boat policy and thinking about going with liability only. Lived aboard a sailboat for six years and cruised down to the Virgin Islands and up to Maine. Owned a aft cabin trawler for five years. Never had a claim on either one. So, do we need collision and comprehensive?


Do you have liability only or full coverage?



Bob
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Old 09-10-2019, 03:16 PM   #2
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We've done it both ways. On one hand, if I had put the extra money for hull coverage in the bank all of these years, there isn't much we couldn't pay for with it today. On the other hand, if I had lost a boat when I only had liability, I'm not sure I would have had the incentive to get a new one, starting from scratch.

We have full coverage now, but, every time we get our bill, I think about going to liability only. I don't think there is a right answer, other than what is right for you.
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Old 09-10-2019, 03:39 PM   #3
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It all depends on the value of the boat, how much you cruise and where you cruise.

If your boat is only worth $5,000 then forget collision. But a $5,000 boat can still cause a huge liability that could wreck you financially, so always take out liability coverage.

Collision coverage gets more important as the value of the boat increases, particularly as a pct of your net worth. And it also gets more important if you cruise in hurricane prone areas.

There is no single answer.

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Old 09-10-2019, 05:41 PM   #4
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I have "full coverage" But if you do the math using their depreciation schedule (5% to 10% per year of boat age) on a 30 plus old boat and the deductable it ends up being a liabity only policy.
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Old 09-10-2019, 05:56 PM   #5
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Liability only. Wood boat, they're not going to pay what the boat's worth anyway. Besides, I haven't hit things, damaged docks, other boats, etc., in about 60 years on the water.
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Old 09-10-2019, 06:15 PM   #6
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Full coverage. I have an agreed value policy with only minor depreciation. Also have coverage for drivetrain failure and a bunch of other normally excluded conditions. Hope I will own the boat 10 years and view the insurance as the cost of playing the game.

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Old 09-10-2019, 06:22 PM   #7
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Quote:
Originally Posted by djmarchand View Post
It all depends on the value of the boat, how much you cruise and where you cruise.

If your boat is only worth $5,000 then forget collision. But a $5,000 boat can still cause a huge liability that could wreck you financially, so always take out liability coverage.

Collision coverage gets more important as the value of the boat increases, particularly as a pct of your net worth. And it also gets more important if you cruise in hurricane prone areas.

There is no single answer.

David
This is the most correct answer. The coverage you select depends on your individual needs.

Quote:
Originally Posted by Bud View Post
I have "full coverage" But if you do the math using their depreciation schedule (5% to 10% per year of boat age) on a 30 plus old boat and the deductable it ends up being a liabity only policy.
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Liability only. Wood boat, they're not going to pay what the boat's worth anyway. Besides, I haven't hit things, damaged docks, other boats, etc., in about 60 years on the water.
Bud and Lepke- your observations may or may not be correct based on the policy you select:
  • An Agreed Value policy will not depreciate for total loss- in the event of total loss, you will receive the value agreed upon at policy start and stated on the Declarations page of your policy. Partial losses may have depreciation applied, depending on the policy language.
  • An Actual Cash Value policy will determine the value the vessel at the time of loss, rather than at policy inception. Depreciation usually factors into the settlement.
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Old 09-10-2019, 06:27 PM   #8
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An option I use here in FL is hull insurance minus the named storm coverage. If there is one thing I have proven over and over again it is that I know how to prevent catastrophic damage to my boat by a storm. Unless a tornado picks it up and whisks it away or lightning strikes during a named storm I am covered. It makes a sizable difference in premium. When my wooden hulled trawler which I owned from its 14th through its 43rd birthday got to around 25, I opted for liability only. It was bought in 1972 new for 47K and sold in 2015 for over 60K while I bought it in 1985 for 75K.
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Old 09-10-2019, 06:55 PM   #9
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Originally Posted by Pau Hana View Post
This is the most correct answer. The coverage you select depends on your individual needs.





Bud and Lepke- your observations may or may not be correct based on the policy you select:
  • An Agreed Value policy will not depreciate for total loss- in the event of total loss, you will receive the value agreed upon at policy start and stated on the Declarations page of your policy. Partial losses may have depreciation applied, depending on the policy language.
  • An Actual Cash Value policy will determine the value the vessel at the time of loss, rather than at policy inception. Depreciation usually factors into the settlement.
I have an agreed value policy and like you say it will pay out that amount but only on total loss. What are the chances that? Not so much in my book maybe a fire I suppose.
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Old 09-10-2019, 07:24 PM   #10
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Something to consider here is damage “caused” by others, or their boats.

Lets take a example so that we can start to understand the problem.

Lets say that your slip mates boat catches on fire and your boat is also lost.

You would assume that your slip mates insurance would pay you the value of your loss, in this case your boats value plus all your stuff inside.

Why, simply because your slip mates boat causes the loss of your boat through it burning up.

But... Is your slip mate liable for your boat? Maybe not. Was he negligent? That is the question that a court would have to answer.

His boat could easily burn up and nobody was negligent, in which case you may not be able to recover even one dime.

Thats one of the reasons that I’ll always have full coverage. My insurance company contractually agrees to replace my boat, even if it cannot recover from another party.
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Old 09-10-2019, 07:28 PM   #11
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I have an agreed value policy and like you say it will pay out that amount but only on total loss. What are the chances that? Not so much in my book maybe a fire I suppose.
All damages even if another boat hits me depreciation applies which ranges from 5% to 10% depends on the item being replaced. So an accident that does say $100,000 of damage. The depreciation of 10% a year for 30yrs results in a value of $4710. There is a clause that says in no event shall the depreciation value be less than 20% of the replacement cost. I am not sure how that is applied but Then subtract my deductable there isn't much left to do the repair.
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Old 09-10-2019, 07:29 PM   #12
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Decisions, decisions. On our homes we only carry liability, the boat has full coverage of course the homes are sitting on land which won’t be destroyed. I guess tied to my home Dock I could sue myself.
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Old 09-10-2019, 08:27 PM   #13
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Full coverage with an Agreed Value Yacht Policy (not a boat policy) plus a separate umbrella liability policy in case I hit something or someone and do more than my boat's coverage will pay for.


At my age I don't want to lose everything in a lawsuit. Not likely, but why take the chance.
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Old 09-10-2019, 08:44 PM   #14
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All good comments here on insurance. One more item to consider: If the marina where you dock damages the boat by accident your docking contract likely precludes you from claiming against marina. To make it worse, if the marina sinks your boat, they may go after you for environmental damage and loss of business - some or all of which may not be covered by a liability only policy.
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Old 09-10-2019, 09:37 PM   #15
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There are many factors to consider. One is the definition of full coverage vs. liability only. What is in your "full coverage" policy. Is it agreed value? Does it allow depreciation on partial losses or not? Then there is salvage and environmental.

Finally, it's your risk tolerance. Talking about never having a claim really means absolutely nothing. You could have one tomorrow through no fault of yours. So, can you accept and afford the total loss of your boat or a major loss and needing to pay out of your own pocket. In our case, we could replace, but we like to spread the risk with others, with insurers. I don't have the risk tolerance to deal with knowing I could incur such a loss.
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Old 09-10-2019, 10:06 PM   #16
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Originally Posted by Pau Hana View Post
This is the most correct answer. The coverage you select depends on your individual needs.





Bud and Lepke- your observations may or may not be correct based on the policy you select:
  • An Agreed Value policy will not depreciate for total loss- in the event of total loss, you will receive the value agreed upon at policy start and stated on the Declarations page of your policy. Partial losses may have depreciation applied, depending on the policy language.
  • An Actual Cash Value policy will determine the value the vessel at the time of loss, rather than at policy inception. Depreciation usually factors into the settlement.
Perhaps Lepke is in the same boat as us?
We couldn't get agreed value.
All we could get was market value and to them, that was the price we paid.
We stole the boat, we could never ever replace her for the price we paid, at best we'd be paying 4x more for her 5ft shorter lesser sister.

If we were to make a claim the item would be depreciated to probably zero.
Deductibles would likely be higher than the claim.
The best part of the coastline was out of bounds for several months of the year.
The piece de resistance was Lloyd's pulling out as underwriter and Berkshire Hathaway/Chubb taking over and increasing premiums on vessels over 18m x 700% or 7% of insured value.
Figured we were better off increasing the maintenance and ground tackle and going liability only.
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Old 09-10-2019, 10:16 PM   #17
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Originally Posted by Bud View Post
All damages even if another boat hits me depreciation applies which ranges from 5% to 10% depends on the item being replaced. So an accident that does say $100,000 of damage. The depreciation of 10% a year for 30yrs results in a value of $4710. There is a clause that says in no event shall the depreciation value be less than 20% of the replacement cost. I am not sure how that is applied but Then subtract my deductable there isn't much left to do the repair.
Not completely accurate.

If another boat hits you, the offending party’s insurance SHOULD make good on the repair of your vessel without depreciation or deductible. ONLY if your policy gets involved would depreciation and deductible come into play.

In other words, your policy will come into play only if the offending party’s policy does not adequately cover the loss, or if the offending party is uninsured and does not have the funds to make you while. Your policy then steps in and effects repairs on your vessel (subject to the policy language) and then subrogates against the other party.

Otherwise- your policy does not come into effect.
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Old 09-10-2019, 10:21 PM   #18
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All good comments here on insurance. One more item to consider: If the marina where you dock damages the boat by accident your docking contract likely precludes you from claiming against marina. To make it worse, if the marina sinks your boat, they may go after you for environmental damage and loss of business - some or all of which may not be covered by a liability only policy.
What you describe is called a “waiver of subrogation” clause. It’s essentially a hold harmless clause in a contract that states the marina cannot be held liable (via subrogation) for damages they may cause.

Quite wretched, in my opinion.
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Old 09-10-2019, 10:26 PM   #19
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What you describe is called a “waiver of subrogation” clause. It’s essentially a hold harmless clause in a contract that states the marina cannot be held liable (via subrogation) for damages they may cause.

Quite wretched, in my opinion.
Worse still, if you contractually release the Marina from liability they would otherwise be caught with, your insurer may have something to say about its liability to you. Check your policy, there could be a provision negating their liability if you release someone they could have recovered from, under your rights subrogated to them when they meet your claim.
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Old 09-10-2019, 10:40 PM   #20
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If the boat value is a small proportion of your total assets, it may not be worth complete coverage. If a total loss of the boat is not going to severely affect you, then it is a poor investment.

The insurance companies charge an amount which they expect will make them a profit. The odds are almost always in their favour, especially if you boat in a low risk area. You are likely subsidizing the payments of those who are a high risk, such as those in hurricane area, or are completely inexperienced in boat handling.

If the loss of your boat would be a disaster to your life, then you obviously need full insurance.
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