Insurance on an old boat... Beware!!

Haylands · Mar 26, 2019

We bought our first boat, a 1976 Hatteras LRC last year, coming from the UK we had no experience with insurance in the US, I had joined the MTOA sometime before and remembered that they had an insurance scheme, we went with their broker, the insurance seemed competitive when compared to online quotes and I wanted a person to deal with instead of a computer as I had many questions.... We obtained the insurance, and then got on with all the other more exciting things... Unfortunately Hurricane Michael interfered with our plans and although we had Barefoot Lady shrink wrapped and well secured in a Yard some 10 miles inland she received a fare bit of damage, the Insurance was with Geico, they were always helpful and although the claim took a few months (they were rather busy) they paid out and we were able to start repairs... After speaking to others in a similar circumstance we realized how good the MTOA benefits were....

1. Favorable underwriting

2. $25K in medical pay

3. $10K personal effects

4. Tow Boat US coverage

5. Tender / Dinghy coverage with only $100 deductible

6. $250 electronics deductible

7. Consequential damage coverage

8. Hold harmless agreement coverage

9. Waiver of depreciation for partial losses if vessel is over 20 years of age

10. Guarantee of no more than a 4% increase at renewal

The most important being item 9... it turns out that the insurance companies have a sliding scale for a deductible against parts starting at a boat age of 20 years and finishing at 40 years with an 80% deduction...!!!! That means if your boat is over 40 years old they will only pay 20% of the cost of new parts...!!!! If this had applied to our claim we would have lost tens of thousands of dollars...!!!

If you have an old boat, please check your coverage.....

As an aside I was also pleased with item 10 but our renewal this year was actually less than last year even with the big claim...!!!

Thank you MTOA...

Pau Hana · Mar 26, 2019

An excellent example of why we should all take a few minutes to read our vessel insurance policies- they are not all the same when it comes to coverages.

catalinajack · Mar 26, 2019

Haylands said:
We bought our first boat, a 1976 Hatteras LRC last year, coming from the UK we had no experience with insurance in the US, I had joined the MTOA sometime before and remembered that they had an insurance scheme, we went with their broker, the insurance seemed competitive when compared to online quotes and I wanted a person to deal with instead of a computer as I had many questions.... We obtained the insurance, and then got on with all the other more exciting things... Unfortunately Hurricane Michael interfered with our plans and although we had Barefoot Lady shrink wrapped and well secured in a Yard some 10 miles inland she received a fare bit of damage, the Insurance was with Geico, they were always helpful and although the claim took a few months (they were rather busy) they paid out and we were able to start repairs... After speaking to others in a similar circumstance we realized how good the MTOA benefits were....

1. Favorable underwriting

2. $25K in medical pay

3. $10K personal effects

4. Tow Boat US coverage

5. Tender / Dinghy coverage with only $100 deductible

6. $250 electronics deductible

7. Consequential damage coverage

8. Hold harmless agreement coverage

9. Waiver of depreciation for partial losses if vessel is over 20 years of age

10. Guarantee of no more than a 4% increase at renewal

The most important being item 9... it turns out that the insurance companies have a sliding scale for a deductible against parts starting at a boat age of 20 years and finishing at 40 years with an 80% deduction...!!!! That means if your boat is over 40 years old they will only pay 20% of the cost of new parts...!!!! If this had applied to our claim we would have lost tens of thousands of dollars...!!!

If you have an old boat, please check your coverage.....

As an aside I was also pleased with item 10 but our renewal this year was actually less than last year even with the big claim...!!!

Thank you MTOA...

Except the $100 dinghy deductible is an add-on endorsement that must be requested. It is NOT part of the general policy coverages although the endorsement is inexpensive at $25/ year. How do I know? Cuz we lost our dinghy in rough seas and our deductible is the general hull deductible. I am none too happy with the Jack Martin Agency for not having made this fact known to me when I insured the boat. READ your policy!

Haylands · Mar 26, 2019

It is on our policy, I have read the whole thing now...!!! Sorry to hear you had problems, my point is more that people should check what coverage they have on an old boat, I'm not trying to promote our insurance, just to make people aware of the pitfalls of old boat insurance...

Arun52 · Mar 26, 2019

"Thank you for providing some of the information for your boat, as this allows me to establish whether or not we are able to offer insurance on this particular risk. Unfortunately due to the age of the vessel, it falls outside of our standard underwriting rules which means we will not be in a position to offer insurance for you."

That was the response I got in Australia from QBE Insurance when insuring a 38 year old boat.
I ended up going with Pantaenius who have been good to deal with.

Woodland Hills · Mar 26, 2019

If you have read your policy then you will know that the MTOA policy only covers your tender for trips from the boat to shore. If you use it for sightseeing or fishing you are not covered, the same if you use your tender to visit other boats in the anchorage: no coverage.

We too have our coverage through the MTOA via Jack Martin and Assoc. and are very pleased with both the policy and the service. However we have a separate policy on the tender so that we are covered in ALL circumstances.

tiltrider1 · Mar 26, 2019

My insurance policy covers my dingy but it doesn’t. There is a HP limitation in my Yacht Policy. My dingy exceeds the HP limit. I have a separate policy just for my dingy.

catalinajack · Mar 27, 2019

Woodland Hills said:
If you have read your policy then you will know that the MTOA policy only covers your tender for trips from the boat to shore. If you use it for sightseeing or fishing you are not covered, the same if you use your tender to visit other boats in the anchorage: no coverage.

We too have our coverage through the MTOA via Jack Martin and Assoc. and are very pleased with both the policy and the service. However we have a separate policy on the tender so that we are covered in ALL circumstances.

I do not think you are correct. Our dinghy was damaged while mounted to our transom. It was not being used in any manner but, yet, MTOA GEICO is covering the loss.

Haylands · Mar 27, 2019

Copied from our policy...

“Dinghy” means a boat not to exceed 15’ length
overall, including an outboard motor that does not
exceed 40 horsepower, if so equipped. The
maximum coverage for any “dinghy” and its
outboard is $15,000. The “dinghy” must be
primarily used as the tender to an “insured boat”
listed on the Declarations Page.

I think the important word is "primarily" with that word in there it seems as if we have a wide scope of instances when the dink will be covered.

Ours is a 10" Trinka with sail kit, oars and an outboard and as long as we use it as a tender "primarily" I can't see it won't be covered...

I have now read every word in our length insurance documents and I'm pretty sure we have the cover we need... These things do tend to be open to interpretation though....

Pau Hana · Mar 27, 2019

Before this train derails- some Insurance basics:

Any policy issued has hard definitions, soft definitions, and exclusions. How something is covered will always fall under one of these categories.

Endorsements broaden or restrict coverage.

Older vessels have a higher frequency and severity of claims, and can therefore be (a) more expensive to insure and (b) be subject to strict depreciation factors. Things wear out over time, and insurance factors wear and tear into its coverage offerings.

The agent should ascertain the best coverages for the client, but bear in mind that it is almost impossible to foresee every eventuality that may occur.

Along with “read your policy” goes the statement “make no assumptions that everything is covered”.

Not exactly what some want to hear, but it’s how insurance works...

Woodland Hills · Mar 27, 2019

Call Jack Martin, ask Beth or Alicia to detail your tender coverage. I was told that the basic tender coverage includes when the tender is being transported and when it is being used for going from ship to shore, and that’s all.

Here is an email regarding the tender coverage from Alicia at Jack Martin:

The tender is covered only for service of the insured yacht for purposes of delivering supplies or ferrying passengers to and from shore
(Tender means any auxiliary watercraft, other than a personal watercraft, whose main purpose is to service the insured yacht for purposes of delivering supplies or ferrying passengers to and from shore. The tender must be able to be stored on board the insured yacht while the insured yacht is under way.)

Woodland Hills · Mar 27, 2019

Haylands said:
Copied from our policy...

“Dinghy” means a boat not to exceed 15’ length
overall, including an outboard motor that does not
exceed 40 horsepower, if so equipped. The
maximum coverage for any “dinghy” and its
outboard is $15,000. The “dinghy” must be
primarily used as the tender to an “insured boat”
listed on the Declarations Page.

I think the important word is "primarily" with that word in there it seems as if we have a wide scope of instances when the dink will be covered.

Ours is a 10" Trinka with sail kit, oars and an outboard and as long as we use it as a tender "primarily" I can't see it won't be covered...

I have now read every word in our length insurance documents and I'm pretty sure we have the cover we need... These things do tend to be open to interpretation though....

Wouldn’t it be better to learn exactly what the interpretation is BEFORE you need to make a claim? Unless you are an experienced insurance agent, like the boater who warned me about this situation (40 years as an enrolled agent), and know how to interpret a policy you are simply guessing and hoping for the best.

Do yourself a favor and call your agent and ask specific questions in order to elicit specific answers.

Woodland Hills · Mar 27, 2019

catalinajack said:
I do not think you are correct. Our dinghy was damaged while mounted to our transom. It was not being used in any manner but, yet, MTOA GEICO is covering the loss.

You are covered when the tender is being carried by your boat. If it is being towed it probably is not, but since we never tow the tender I never asked.

Woodland Hills · Mar 27, 2019

This discussion has prompted me to contact them again for clarification. Markel now states that if the tender is “mainly” used for ship to shore and the fishing or sightseeing is not for commercial purposes then there is coverage.

boater3 · Mar 28, 2019

Sorry but can you please clarify what MTOA has over and beyond a regular Geico policy? All the things you listed look like regular things either that are a part of a normal Geico (non-MTOA) policy or can be added with an endorsement. Thanks!

Haylands · Mar 29, 2019

mystery said:
Sorry but can you please clarify what MTOA has over and beyond a regular Geico policy? All the things you listed look like regular things either that are a part of a normal Geico (non-MTOA) policy or can be added with an endorsement. Thanks!

I am not trying to promote the MTOA or Geico insurance, the ONLY point of this post was to make people aware that on older boats you may not have the cover you think you have, hence the title of this thread, there were a large number of boats damaged by Hurricane Michael where we are, we heard of several people who only got paid 20 cents on the dollar for their loss due to the age of their boat....

If I had posted this without saying who we are insured through and what endorsements we have then I would have been asked...

If you can get those endorsements on a standard Geico policy then that is great... I obtained several other quotes with a wide difference in coverage. The one from the MTOA was, for us, the best value in cover and premium. This will obviously change with individual personal circumstances....

Haylands · Mar 29, 2019

Woodland Hills said:
This discussion has prompted me to contact them again for clarification. Markel now states that if the tender is “mainly” used for ship to shore and the fishing or sightseeing is not for commercial purposes then there is coverage.

I received this reply from them...

"It would be covered for trips out.
It is definitely covered for the way 99% of people use their tenders."

BandB · Mar 29, 2019

catalinajack said:
Except the $100 dinghy deductible is an add-on endorsement that must be requested. It is NOT part of the general policy coverages although the endorsement is inexpensive at $25/ year. How do I know? Cuz we lost our dinghy in rough seas and our deductible is the general hull deductible. I am none too happy with the Jack Martin Agency for not having made this fact known to me when I insured the boat. READ your policy!

You should be none too happy with yourself for not reading the policy.

Nepidae · Apr 1, 2019

Hi Peter,

The previous President of the MTOA was an insurance guy so he knew the ins & outs of the insurance field. He could talk their lingo and know what they were saying in return.

There are a few items in the list that started this thread that are unique to the MTOA policy. Some you can get a rider for and others you can't.

The main item that you can't get a rider for is the level of yearly increase the rest either comes with the BoatUS policy or can be added with a rider.

Items 7 & 9 are ones I added and 4 (TowBoatUS) you can get even if you aren't insured thru BoatUS or Geico by buying a TowBoatUS policy on line. Having a Geico policy does get you favorable pricing and a renewal with your policy renewal.

1 of the items not mentioned is that BoatUS is usually 1 of the first on any major scene of destruction, hurricane. That to me is important and from all that I hear, they pay with little or no negotiating. Many insurance companies that I've had friends involved with either dragged their feet or negotiated, or both.

Paying on the policy is important.

Insurance on an old boat... Beware!!

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