Cost Of Insurance On Your Boat

sbu22 said:

It may be the "last thing" in your eyes, Peter, but for most of us the real world intervenes in these decisions. The extreme opacity of the insurance business requires a team of Philadelphia lawyers to decode the tiny type word-salad terms of a policy. It is fascinating to me that the so-called underwriters will take all of the information you listed (and sometimes more), apply their scientific risk analysis, and come up with (in my case) quotes that vary by a factor of 5 (top to bottom) for the "same" coverage.

With your expertise, you can probably spot these disparities a mile away. For nubs like me, it may not be so obvious or even evident. Professionally, I sometimes become peripherally involved in insurance litigation - funny how the lawyers for a megacorp insured and the lawyers for the megacorp insuror can read the same words on the same piece of paper that they both agreed to the year before and come to 12 figure disagreements. Not sure the average boat owner has a real basis for comparison other than the basic (policy professed) coverage numbers and cost. Agree that there are quality factors in insurance, but it's a challenge to figure them out.

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I don't think there's a person here who can't read the insurance policy in it's entirety. Most just don't. You find all the exclusions and limits. I do agree with Pau Hana completely. If you don't feel comfortable reviewing the details of a policy then get someone who is and who you can trust to assist you. To compare two policies based only on premium or a couple of top level factors can be extremely dangerous.

As to policies being difficult to decode, I've dealt with policies that were, but I would not put boat policies in that group. They spell out clearly what is and isn't covered and they define the terms they use. The problem is there is no standard as in auto policies, so they can vary a great deal. I will say too that the little extra missing in one policy can often be obtained for very little more.

FF said:

For over 50 years I have "self insured" at $1000 to $3000 per year for a policy the savings (plus interest) leaves a nest egg to pay for minor damage.

The biggest fear is a drop if diesel in the water and "expert" clean up pirates showing up for a free lunch.

With no loan , an inexpensive boat can be walked away from.

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Are you saying you carry no liability insurance either?

"Are you saying you carry no liability insurance either?"

Usually Hard to get with out hull insurance,and boat survey.

Only insurance is a tow boat policy when we go great distances inshore.

We have Allstate, did some checking against BoatUS and they were only a little less but required a survey which killed the saving for many years. I will say after Sandy struck BoatUS did an amazing job of coming out and quickly settling claims.

FF said:

"Are you saying you carry no liability insurance either?"

Usually Hard to get with out hull insurance,and boat survey.

Only insurance is a tow boat policy when we go great distances inshore.

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Well, just as it is in a car, I think it should be illegal not to have liability insurance on a boat. That's why the rest of us have to pay extra for uninsured boaters (and to any who aren't sure if they're covered for such, time to look carefully at your policy). Certainly it isn't likely but it only takes one time of you causing a million or millions of dollars worth of damage to another boat or boats and finding yourself on the losing end of a suit.

Whether you carry hull insurance is irrelevant to me. It's only your loss. But you not carrying liability is very much an issue to the rest of us.

I think it should be illegal not to have liability insurance on a boat.

Then we can enjoy the same success as mandatory auto liability insurance (except in NH) where, thanks to such laws, only 13% of drivers are uninsured and probably another 30% are carrying laughable mandated minimum coverage limits.

Travelers - BoatUS

We've had our boats insured by Travelers for 10+ years - standard coverage for $3,500 with agreed value of $300k and $3k deductible. We did have a 2012 work warranty claim for improperly installed stabilizer hull blocking which was done in the year 2000. The claim was handled promptly and completely by Travelers.

I've compared to BoatUS at least twice with them being at least 20% higher for basically the same coverage but only $250k agreed value (max they would offer). Slight difference in navigational territory coverage - BoatUS being larger area coverage.

Unfortunately its been difficult to even get other comparison quotes as Avalon is now 26 years old and most insurers are not interested in quoting coverage.

sbu22 said:

I think it should be illegal not to have liability insurance on a boat.

Then we can enjoy the same success as mandatory auto liability insurance (except in NH) where, thanks to such laws, only 13% of drivers are uninsured and probably another 30% are carrying laughable mandated minimum coverage limits.

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I think that's a major issue and the enforcement and penalties should be greater. I've had friends hit by uninsured motorists and what they then had to go through to recover was very burdensome for something that was in no way their fault.

AvalonGB said:

I've compared to BoatUS at least twice with them being at least 20% higher for basically the same coverage but only $250k agreed value (max they would offer). Slight difference in navigational territory coverage - BoatUS being larger area coverage.

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What I've seen on Boat US among people I've talked to is that on small boats on lakes they always seemed very competitive but on larger boats and on the coast they've been high. Now these generalizations may not hold true for a specific boat.

"But you not carrying liability" and "causing a million or millions of dollars worth of damage",,,,,,,,

So your liability policy will cover a few million in damage?

Might pay to read the policy.YOU could be on the hook when it reaches the limits

I'd rather be on the water with FF with no liability then on the roadway with many that have suspended licenses and NO insurance all the while on their cell phone!

FF said:

"But you not carrying liability" and "causing a million or millions of dollars worth of damage",,,,,,,,

So your liability policy will cover a few million in damage?

Might pay to read the policy.YOU could be on the hook when it reaches the limits

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Yes, the combination of it and my umbrella will. Rest assured I've read every word of the policy and had it reviewed by a professional in the insurance industry and an attorney.

Marlinmike said:

I'd rather be on the water with FF with no liability then on the roadway with many that have suspended licenses and NO insurance all the while on their cell phone!

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I don't want to be on the road with them either and I dislike that I have to pay extra because they drive without licenses and insurance. The cell phone is a different subject.

FF said:

"Are you saying you carry no liability insurance either?"

Usually Hard to get with out hull insurance,and boat survey.

Only insurance is a tow boat policy when we go great distances inshore.

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check into skisafe.com

I got 300K liability for $450/yr with no survey. My boat is a 1983 43' ocean alexander.

"I got 300K liability for $450/yr with no survey."

But some folks claim Millions and Millions is required?

I like to live dangerously.

The way I figure it, if I was so worried about the boat sinking and needing to insure that level of damage it may cause...

I would ditch that one and buy one that didnt make me worry like that.

Sinking? Most likely it catches fire at the dock, and the fire spreads to a bunch of other boats.

My third party liability coverage is $10 million, which seems about the right amount to carry.

FF said:

"I got 300K liability for $450/yr with no survey."

But some folks claim Millions and Millions is required?

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That a claim in an extreme case could exceed the sum insured is no reason to refuse to cover common claim amounts.

"That a claim in an extreme case could exceed the sum insured is no reason to refuse to cover common claim amounts."

The most common claim amount is probably a ding from a fender sliding out of place.

Burning down the marina is probably less common.

far more boats sink than burn.

Forgot to include the link...

Top 10 BoatUS Marine Insurance Claims - Seaworthy Magazine - BoatUS

sbu22 said:

It may be the "last thing" in your eyes, Peter, but for most of us the real world intervenes in these decisions. The extreme opacity of the insurance business requires a team of Philadelphia lawyers to decode the tiny type word-salad terms of a policy. It is fascinating to me that the so-called underwriters will take all of the information you listed (and sometimes more), apply their scientific risk analysis, and come up with (in my case) quotes that vary by a factor of 5 (top to bottom) for the "same" coverage.

With your expertise, you can probably spot these disparities a mile away. For nubs like me, it may not be so obvious or even evident. Professionally, I sometimes become peripherally involved in insurance litigation - funny how the lawyers for a megacorp insured and the lawyers for the megacorp insuror can read the same words on the same piece of paper that they both agreed to the year before and come to 12 figure disagreements. Not sure the average boat owner has a real basis for comparison other than the basic (policy professed) coverage numbers and cost. Agree that there are quality factors in insurance, but it's a challenge to figure them out.

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Regarding premium differences amongst different policies: assuming each policy has the same base coverages, what you see is called "the appetite of the markets". Think of it this way- you need to buy a car, and the basic requirements are 4 wheels, 4 doors, 4 cylinder, auto transmission.

A Mercedes, Kia, Chevy, Mazda, and Opel all fit the base needs- with sometimes wildly differing prices.

Same goes for yacht policies- you will see a difference in premium, because each insurer has different risk tolerances. Hence, pricing alone should not be the determining factor in selecting a policy. As for policy language; yes, I have the benefit of years of experience reading and deciphering policy language- but it's not really all that hard to understand. The typical policy, from front to back, starts with the definitions, and ends with the various coverages. AND- your agent/ broker should be that subject matter expert for you should something be too confusing.

Aside from being a local (as in TF local) insurance guy, I am in the real world- I have to shop for coverages just as you do for Pau Hana and tender, and I get no special breaks because I'm in the business.

It's like this: do you want insurance that pays when you have a claim, or do you want to show price? There is a reason for the different premium prices, and sometimes it is a mistake in calculation. But make no mistake about it, there are many many big name insurance companies that simply do not pay. So if you are with one of those, good luck when the time comes. I am in the marine towing and salvage business. I have been since 1972. Don't shop price, shop insurance that pays. It will put a policy in a whole different light. For example, I have stored a vessel with a steering system that failed when the boat was two weeks old. Resulted in a capsize and both occupants injured badly. Insured value 72k. Insurance companies offer after 14 weeks is 46k and we will let you buy the boat back. The insurance business is severely under regulated.

1996 Hurricane Fran

Yep says the adjuster, that is your 36' sloop up in the trees on that hill. It's insured for $8,900. Here's your check for $6,050 for your prorated value.

So you ask about removing the boat from that hill and re floating it. The adjuster says he already paid you, and that is all there was. He walks away, like a good neighbor.....

I helped that owner out.

jerryreliable said:

Yep says the adjuster, that is your 36' sloop up in the trees on that hill. It's insured for $8,900. Here's your check for $6,050 for your prorated value.

So you ask about removing the boat from that hill and re floating it. The adjuster says he already paid you, and that is all there was. He walks away, like a good neighbor.....

I helped that owner out.

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Depending on the policy, that may or may not be true. In the example you cited, if the assured is paid for the CTL (constructive total loss) of the vessel, it's not the responsibility of the assured to move the boat- it's the insuring company's problem, because they settled the claim and (per all policy language) are now the owner of the vessel.

If it's a partial loss, then the claim process would include removing the vessel from the tree, refloating, and repairing.

Valuing a policy on price alone is a bad deal on boat insurance. I can think of several traps boat owners can fall into:

Damage caused by preventable mechanical failure: If the claim is the result of mechanical failure (loss of steering etc) and that was the result of lack of maintenance, some policies may deny coverage

Loss of a towed dinghy, many policies will not cover the dinghy when towed. Also if it is not locked at a dinghy dock

Loss of coverage when not enough crew or wrong person in command. Some policies require a second crew member (especially overnight) and most limit who can be in command (your son uses the boat and you are not aboard).

For sailors and those trawlers with masts, there is a coverage issue with uninspected rigging that fails. Some policies deny coverage for rigging failures if the rigging is more than 10 years old and has not be inspected (undefined).

Geographic limits: 50 miles offshore means 50 miles offshore. Some policies are violated when a boater crosses the Big Bend on the eastern Gulf of Mexico. Some policies limit how far north or east you can go in Canada, Haiti and Cuba are out and also in the Caribbean the 60 degree east limit stops coverage for the east side of some islands

These may not be important for most boaters but it is important to know that you have coverage for the way you use your boat.

Indeed- hence, my admonishment that all of us need to read our policies to understand what is and what is not covered.

Pau Hana said:

Indeed- hence, my admonishment that all of us need to read our policies to understand what is and what is not covered.

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Read and understand every page and every word of your policies. Of all your insurance policies. Auto is fairly standard in all states. Homeowners fairly standard in some states, but still can have critical exclusions. You've seen the tv commercials over the years where one thing happens causing another causing another then another and that last one lands on your house. All other policies are pretty much free to write as they want. Understand you and the insurance company are adversaries. They want to limit their liability and charge you the most they can. You want to pay the least and be covered by everything.

Every exclusion in a policy is carefully designed to reduce their liability and your coverage.

BandB said:

Every exclusion in a policy is carefully designed to reduce their liability and your coverage.

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Sounds like same planned abject of many of the Bills in congress!