Vessel insurance update- Fall 2019

And why should those who aren't in hurricane hit areas, not even on the same side of the planet have to pay for those who choose to leave their vessel in those areas?

It should be rape those who choose to remain
Reward those who choose not to put vessels at risk.

Simi 60 said:

And why should those who aren't in hurricane hit areas, not even on the same side of the planet have to pay for those who choose to leave their vessel in those areas?

It should be rape those who choose to remain
Reward those who choose not to put vessels at risk.

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You shouldn't. You should just pay a premium based on piracy. lol.

We just received our new policy due for renewal on 12/22/2019 with GEICO Marine. We have been with GEICO for four years. They have not required a survey beyond the purchase survey we had in Feb. 2014. Cost increased $600 and $1,000 more than two years ago. However, our deductible is now zero as opposed to $1,145 last year and $2,290 two years ago. Also, we have no prohibition against travel below a certain parallel on a certain date. However, if our boat is damaged in a named storm at any time in the states of Texas, Miss, Alabama, Florida, Georgia, South Carolina, or North Carolina we have a deductible of 5% of Agreed Value.

As for getting a new survey "just because", I don't perceive much value in that. We live aboard and I maintain the boat to a very high standard. It is highly doubtful that a survey would reveal anything beyond minors. Besides, at some point a survey will be required by the insurer.

Pau Hana said:

2019 has seen lots of changes in the stateside marine insurance arena- some good, some challenging. Programs are tightening up their underwriting criteria or simply electing to no longer offer marine coverage. Most of these changes can put the insured in tough situations, as companies are non-renewing customers on short notice or requiring navigation changes that limit the insurer’s risk- and it’s tough to insure an older vessel with a 5+ year old survey, or larger vessels with owner/operators.
It’s always a good practice to have your vessel surveyed regularly, especially if the boat is over 10 years of age. I’ve always recommended that a boat be surveyed every other regular haulout (here in Seattle, we haul out every 2-2.5 years) so the survey remains relatively fresh.

• Companies exiting the market completely- Brit RE, American Reliable, Ironshore, Tradewinds. If you’re insured with one of these companies, expect to receive a non-renewal notice.
• Premier Marine has severely curtailed their appetite to vessels no older than 25 years of age as of 11/01 (I believe). If you’re with Premier, I strongly recommend you get your vessel surveyed soon so you can have the policy shopped.
• various London syndicates have pulled back on their Caribbean/offshore navigation offerings.

Just food for thought- I know insurance isn’t sexy or high tech, but it is an important component or our pastime to consider.

Pete

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Thanks Pete for the update. My policy is with Travelers - A "Yachtlux" product. The nav limits are expansive and the cost seems very reasonable - around 1% of value - for a 55 year old boat. One thing I do is group a number of different policies with the same company - personal home, auto, liability, investment properties, etc. Not sure it helps, but my hope is that they would be less likely to give me problems if they have a larger overall book of business with me. Is that valid?

Must admit I've never understood the logic behind 100% coverage for a named storm loss. There just doesn't seem to be any motivation for some boat owners to think. It always amazes me how many boat owners make no additional storm preparations or even bother to check on their boats before a hurricane. It seems to me that a 25% deduction on named storm coverage might motivate some people to do a better job of avoiding leaving their boats in harm's way or without additional preparation.

Ted

One other point most don't realize, you price a policy with say Gieco USBoat insurance.
You assume that's the carriers rate right?


Nope due to commission the broker wants to build into the quote they can vary a lot.


My policy was quoted by 5 brokers between 2750-3600 ( Gieco direct was 3200)


Same on all other insurance, auto, home etc

I think the key is to have an umbrella of $1-$3 million on all your insured assets, cost is low.

As Pau Hana, B&B and others have indicated, underwriters assess premiums based on risk for the location (including berthing), boat age, construction and condition (5 year surveys at least) and various factors relating to the owner.

I have just renewed my boat insurance. Coverage is for all of Australia and New Zealand, and up to 250 nm offshore. My home marina berth location is listed on the policy, but there is no time requirement for being there, and I do not have to notify any times that I'm away from that berth. There are no seasonal or other area restrictions. My premium increased by 3%. The previous year it increased by 3.4%. I don't see any 'other side of the planet' or far away hurricane hit areas having much influence on my premiums!

Pau Hana said:

As an added hedge, you should be documenting your build process (photos, blog write up, etc) so any questions that come up as to build quality/methodology can be easily answered.

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Of course and I'm also including a video series. No, that's not a joke even though it kind of reads that way. I'll be a youtube sensation. OK that was.

Insequent said:

don't see any 'other side of the planet' or far away hurricane hit areas having much influence on my premiums!

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Who are you with?

lipets said:

One other point most don't realize, you price a policy with say Gieco USBoat insurance.
You assume that's the carriers rate right?


Nope due to commission the broker wants to build into the quote they can vary a lot.


My policy was quoted by 5 brokers between 2750-3600 ( Gieco direct was 3200)


Same on all other insurance, auto, home etc

I think the key is to have an umbrella of $1-$3 million on all your insured assets, cost is low.

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Absolutely false.

No broker or agency has the ability to “build commissions” into the quotes rate. Each vessel/owner is rated on the merits of the risk (vessel age, vessel speed, location, value, experience, etc.).

I cannot comment on your specific GEICO quotes, but I can say that it’s not hard to obtain different quotes from GEICO whether from a broker or calling in direct.

Simi 60 said:

Who are you with?

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Club Marine.

As I see it you are in a difficult position. From an insurer's perspective you have a few stereotype negatives going against you. Old boat. Made of wood. Anchored out fulltime. That lumps you into a risk category that historically has been a bad risk. Boats not kept in marinas are regarded with a jaundiced eye. So, coupled with age and wood, at face value you are lumped in with derelicts. Or boats that will soon be derelicts because the owners do not have some or all of the time, money, capacity or inclination to keep the boat in top condition.

Now, in a proposal you are able to highlight the boat condition (survey by someone who actually knows wooden boats and has a good reputation), highlight your long history as both a boat owner/operator and as a professional in boat building and/or repairing. With that info any decent broker will get you a good policy. Then, down the track the policy comes up for routine review, possibly by someone who does not go back to look at all that detail in the original proposal. So you get lumped into the 'pending derelict' category as a quick response.

What can you do? Well, if you were using a broker you could ensure that prior to renewal they re-iterate your background to the potential insurer so they don't forget to consider it. You can get a current market valuation and submit it as part of the renewal process, and can probably get an 'agreed value' policy as opposed to a 'market value' policy, should you wish. You could look at buying a marina berth that you can state is your home berth. Should you be out cruising a lot (renting that berth out while absent) then that is fine, it is still your home berth. And you may well use it from time to time between rentals.

There is a not-insignificant cost to using a broker, but I think they earn their money when it is not a routine situation. They are better able to have dialogue with insurers than an individual is able to. If the broker also handles your house insurance, and perhaps car, then you can build a relationship with them that helps. My broker has pretty much retired but so far I have been kept on as a client. When he fully retires I'm hoping that he can pass me onto someone good that he knows along with my file and relationship history.

Pau Hana said:

Absolutely false.

No broker or agency has the ability to “build commissions” into the quotes rate. Each vessel/owner is rated on the merits of the risk (vessel age, vessel speed, location, value, experience, etc.).

I cannot comment on your specific GEICO quotes, but I can say that it’s not hard to obtain different quotes from GEICO whether from a broker or calling in direct.

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You just contradicted yourself I think, on one hand you say rated on the merits but then say you can get different quotes?


One of those higher quotes was actually from you.

lipets said:

You just contradicted yourself I think, on one hand you say rated on the merits but then say you can get different quotes?


One of those higher quotes was actually from you.

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Different quotes because they have different terms. Change small things on the policy and you change the price. You may think they're all on identical policies but they're not necessarily. Plus different underwriters may rate differently. However, in no way to the sales agents control the pricing or commission.

https://www.superyachtnews.com/business/the-state-of-the-insurance-market

This article covers a lot of the fundamental changes that are going
on with marine yacht insurance.

Most of us probably don't own superyachts but the trickle down
effects us also.

BandB said:

Different quotes because they have different terms. Change small things on the policy and you change the price. You may think they're all on identical policies but they're not necessarily. Plus different underwriters may rate differently. However, in no way to the sales agents control the pricing or commission.

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No way, the terms were the same-no changes

lipets said:

No way, the terms were the same-no changes

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So you saw the policies and all the small print and every exclusion on them. There are a lot of elements and typical discussions only cover three or four of the most basic. Perhaps you have and, if so, Pau Hana can explain better, but most policies are about 20 pages, some more, and there is some element of the policy on every page. I got multiple quotes initially and they all told me the coverage amounts and deductible and seemed the same. There were, however, very significant differences in the policies themselves. Unfortunately, there are no standard boat policies like there are on autos.

Sorry your experience has been bad. Better luck going forward.

Insequent said:

Club Marine.

As I see it you are in a difficult position..

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Nope, don't think its anything to do with those reasons at all.
Like you we have a home port but no restrictions as to how often we need to be in a berth.
We were with Club Marine for the first year using a broker but they put their prices up about 20% on renewal which was enough to make us shop around.
Boat had and has a current survey, vessel comes out every 18mths and work is done by one of Brisbanes larger boatbuilding business with a timber background.

Pants offered a considerably cheaper premium at the time and we went with them but then Lloyd's pulled out of the market and Berkshire Hathaway/Chubb took over the underwriting after the US Hurricanes.

The latest increase was due to being over 18m in length.
I had a 20m fiberglass vessel in the wings at the time and was told it wouldn't matter if we brought her.
18m+ fiberglass on a marina, steel, alloy, wood, all were getting the same % of increase.

lipets said:

No way, the terms were the same-no changes

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From your standpoint. From the underwriting standpoint, little changes can make a huge difference (and this is from my 5 years as head of GEICO charter underwriting). There is a backside to any rating system that the public never sees- this is where underwriting plays. Changes that affect rate include:

• Vessel speed
• Vessel type (fly bridge, trawler, cruiser, etc)
• Vessel HP (there are ranges where HP affects rate)
• Vessel fuel type
• If you were given any of the 4 main credits
• And more.

I don’t doubt you received different quotes- my statement was contradicting your statement that brokers jack rate to increase their commissions. Rates are generated off actuarial tables based on input criteria.

Does owning outright greatly affect insurance? We don't like to borrow but it seems the priority for insurance is to protect lenders more than to protect owners. "You bought it, it's yours, not our problem".

Boat said:

Does owning outright greatly affect insurance? We don't like to borrow but it seems the priority for insurance is to protect lenders more than to protect owners. "You bought it, it's yours, not our problem".

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Outright ownership does not affect the rate of a policy. When an insurer agrees to afford coverage, they are on the risk, period. The only change is that settlement checks are written to both the policyholder of record and the lienholder.

Simi 60 said:

Nope, don't think its anything to do with those reasons at all.
Like you we have a home port but no restrictions as to how often we need to be in a berth.
We were with Club Marine for the first year using a broker but they put their prices up about 20% on renewal which was enough to make us shop around.
Boat had and has a current survey, vessel comes out every 18mths and work is done by one of Brisbanes larger boatbuilding business with a timber background.
Pants offered a considerably cheaper premium at the time and we went with them but then Lloyd's pulled out of the market and Berkshire Hathaway/Chubb took over the underwriting after the US Hurricanes.

The latest increase was due to being over 18m in length.
I had a 20m fiberglass vessel in the wings at the time and was told it wouldn't matter if we brought her.
18m+ fiberglass on a marina, steel, alloy, wood, all were getting the same % of increase.

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The feedback you got was just to make their answer more palatable to you without getting into to-and-fro debates. Nonetheless, I find the over 18m comment a useful bit of info to remember.

Oh, and I am not saying your boat is a pending derelict - just that initial assessments are going to shove you into that pigeon-hole and you need to make a case to get a different rating.

My guess is that Lloyds concluded that Pants had their risk ratings wrong, or were out of date, probably based on claims history. BH just updated them. They are a dynamic thing - who knows, Allianze and their re-insurers might go the same way but they have not as yet, at least to my knowledge.

Sounds like the best thing you can do is buy a chain saw before next haulout and then lop 0.31m of the LOA!

Thanks Pete for the update and thanks so much for putting me in the hands of Keith Sargis.
Keith Sargis
Novamar Yacht Insurance
Established in 1987
1549 Ringling Blvd. Ste 101
Sarasota, FL 34236
O* 941.444.5099
F** 941.328.3598
www.novamarinsurance.com

Keith worked on my particular issues: cost, older boat, older survey, and got me a result that I could not be more pleased with.
And I know it wasn't easy, but he got it done.
So thanks so much again.

Wxx3 said:

Thanks Pete for the update and thanks so much for putting me in the hands of Keith Sargis.
Keith Sargis
Novamar Yacht Insurance
Established in 1987
1549 Ringling Blvd. Ste 101
Sarasota, FL 34236
O* 941.444.5099
F** 941.328.3598
www.novamarinsurance.com

Keith worked on my particular issues: cost, older boat, older survey, and got me a result that I could not be more pleased with.
And I know it wasn't easy, but he got it done.
So thanks so much again.

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Richard, you're most welcome! Keith and I have worked together for years, first a an agent (me)/ underwriter (keith) relationship, then together as underwriters for GEICO, and now as agents for Novamar. I trust him implicitly, and am glad he sorted out your needs.

I am sad that we didn't meet when you visited Tyee YC (I was in California).

Big cash flow at 5% is big money, big payouts disrupt the deal.

Ah yup, GEICO.
I had a hull survey accomplished before my agent told me it was not necessary.

So, does it help if the boat owner offers up front to waive coverage for damage from named storms?

CapnCrunch said:

So, does it help if the boat owner offers up front to waive coverage for damage from named storms?

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You can elect (with certain carriers) to decline named windstorm coverage, and this should reduce your premium. This is not a decision to take lightly, as you are shouldering the responsibility in full.

This may be a viable decision for some, but I cannot recommend it for most.

CapnCrunch said:

So, does it help if the boat owner offers up front to waive coverage for damage from named storms?

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Your mortgage holder may require full coverage.

Pau Hana said:

You can elect (with certain carriers) to decline named windstorm coverage, and this should reduce your premium. This is not a decision to take lightly, as you are shouldering the responsibility in full.

This may be a viable decision for some, but I cannot recommend it for most.

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After hearing some of the quotes for coverage, waiving storm coverage may mean the difference being financially able to cruise or not. The thinking here is that we plan to be out of the zone during hurricane season, so not much need for said coverage.

OldDan1943 said:

Your mortgage holder may require full coverage.

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Boat is paid for.