Insurance

[stroutmail]

I think many insurance providers look at liability only policy as not having enough revenue and market size to justify the risk. Several companies I checked would not offer liability only. Assessing risk of fire or sinking on an old boat can be difficult, so the usual tool is the survey. Convince the underwriter your boat is not likely to sink or be destroyed by fire.

 

[bluebyu]

Post 30,
Even a boat that never leaves the marina,
Fuel tank leaks, bilge pumps handles it, boat does not sink. But.....
Maybe the better thought is liability and fuel spill protection?

 

[HiDHo]

I have been fully insured by the same company for the last 14 years but I once worked for Insurance Risk Systems identifying residential risks related to new home owners insurance policies and renewals. I wonder if marine insurance companies do the same thing ? I have seen many boats older than twenty five years that were in better condition than new boats, and a few that weren’t. I guess they shift the boat condition to the owners by requesting an insurance survey before re-insuring. Not as good as the surprise home risk surveys I did for IRS. Hard to hide the pit bull if you don’t know you are going to be surveyed !

 

[Portage_Bay]

Something I don't understand about insurance on older boats, cars etc. Why is liability cheaper than full coverage?

Looking at my policy for my '83 Californian
The boat is insured for the purchase price of $70K and that is the bulk of the premium. 69%.

Liability coverage is $1 mil and that is a much smaller part of the premium. 31%.

Why is the underwriter is charging more for a relatively small $70K risk than the larger $1 mil liability risk.

On the subject of liability only. Do make sure if you go that route you are covered for pollution. Boats old and new sink. Old fuel tanks leak and auto bilge pumps will happily pump the fuel overboard. In Washington state the maximum responsibility for pollution from recreational boats is capped at $939,800. I wouldn't be surprised to find that a significant spill will hit $939,800 very quickly. I witnessed the clean up effort from a fuel transfer aboard a boat gone wrong. Booms were brought in and deployed, skimmers used to pick up the bulk of the fuel, absorbent material for the rest. All of that had to be collected into a large lined dumpster then disposed of properly. Not all of the fuel was caught in the booms and had to be dealt with. Shoreline clean up, boat clean up etc. It was quite an effort and took a fairly large crew.

 

[SteveK]

I installed one of these for each bilge pump. Tested it in bucket with water and layer of oil & diesel. It works, stops pumping until only water is sensed.

 

[AZ2Loop]

Something I don't understand about insurance on older boats, cars etc. Why is liability cheaper than full coverage?

Looking at my policy for my '83 Californian
The boat is insured for the purchase price of $70K and that is the bulk of the premium. 69%.

Liability coverage is $1 mil and that is a much smaller part of the premium. 31%.

Why is the underwriter is charging more for a relatively small $70K risk than the larger $1 mil liability risk. ........

You are looking at one part of the equation -- their maximum exposure on that part of the insurance. Another part of the equation is their likelihood to have to pay on that portion of the policy. That likelihood has a HUGE impact on their actual risk, and therefore, on the cost of the insurance. I'm sure there are more pieces to the puzzle, like how they spread their risk through reinsurance, etc., but I think their odds of paying a claim is an important piece you may have been overlooking. Maybe an actuary will chime in with more info.