Insurance, full coverage vs. Liability

[Steve91T]

This thread makes my head hurt

 

[Pau Hana]

I think that many here are misunderstanding some of the real differences between policies that cover only liability, or Actual Cash Value, and a All risk marine policy.

I think that Pete tried to get the point across, but I feel that his message was lost, so I will eleborate a bit.

We all understand a liability policy. It just covers liability to the owner. A problem with that concept is that we often assume for example that if another boat causes our boat to be damaged that we can "just go after his insurance" to pay for our boat. That is often not really the case. The challenge here is that in order to recover from someone, we have to prove he was negligent.

Allot of boat damaging other boat issues can never prove negligence. For example if your neighbors boat catches on fire and burns your boat, you might assume that his insurasnce will pay for your boat, but the reality is that unless you can prove that the owner was negligent than he has no liability. Just because his boat caught on fire does not mean the owner was negligent. Far from it. Thats not to say that his insurance might not pay, but I would not count on it.

An ACV policy is generally written similar to your auto policy. Often they are written by auto insurance companies. What they cover is the actual cash value of your boat as discussed. The big point here is that they often only cover a set of named risks, such as collision, fire, etc... Payout will be limited to losses that occur from a specific event, which has to be named in your policy.

An all risk marine policy agreed value is a whole different level of coverage. We all understand the agreed value part, which protects you from a post accident valuation that may not reflect your opinion of the value of your boat.

The big part of an all risk marine policy is the "all risk" part. What that means is that your boat is protected against enything not listed in the exclusions section of the policy. This is a huge difference from the ACV policy which only protects your boat from losses listed in the policy.

Lets take an example that I know about personally (although I was not the insured)

An owner is operating his boat when the engine temperature pegs, oil pressure drops and the engine starts blowing black smoke.

Cummins Northwest comes out, checks over the engine and sees high blowby. The engine is removed and disassembled, and the only thing they can find is that possibly the thermostat got stuck, but no real cause.

Under the owners all risk policy the engine was replaced with a factory remanufactured Cummins engine. The bill was well north of $20,000 and the owner only had to meet his deductable.

Under a ACV policy there would ave been no payout.

This actually happened. I was there. We were sea trialing the boat that day. I ended up buying that boat, with the new engine.

Somebody has been paying attention all these years...

 

[Pau Hana]

This thread makes my head hurt

It shouldn't, as it's a pretty easy concept.

 

[Al]

I understood the points that pete and ksanders made I only have a $116.00 annual $50,000 liability policy with Safeco to ease my mind regarding pollution recovery cost and dinging your boat. Part of the beauty of being a small trawler owner with low overhead!

Al-Ketchikan

 

[ksanders]

Somebody has been paying attention all these years...

It was the teacher

I can understand that money is money, and people want to save all they can.

The problem is when people assume that Policy A = Policy B in terms of coverage, with the only difference being the price.

Nothing could be further from the truth, and when you have a loss it is not the time to figure that out.

 

[ksanders]

I understood the points that pete and ksanders made I only have a $116.00 annual $50,000 liability policy with Safeco to ease my mind regarding pollution recovery cost and dinging your boat. Part of the beauty of being a small trawler owner with low overhead!

Al-Ketchikan

It's all in the level of risk that you as the owner are wiling to assume.

There are some really great people here that can assume that risk, because they could easily replace their boat out of pocket, due to either deep pockets, or a modest boat cost.

Others here cannot afford to assume that risk. I am in the second category. Thats why I have a All risk policy. I hope to never need the coverage, but am glad it will be there should the need arise.

At the same time I do not "rely" on coverage to protect my boat from preventable issues. I proavtivally maintain my boats critical equipment, plus I have invested in pretty sophisitcated early warning systems to detect issues before they result in a loss.

Things like networked smoke sensors in all major compartments, automatic fire supression systems, high water alarms, etc... remote monitoring, all lower my risk of a loss and my insurance premiums reflect that lower risk.

 

[Al]

It's all in the level of risk that you as the owner are wiling to assume.

There are some really great people here that can assume that risk, because they could easily replace their boat out of pocket, due to either deep pockets, or a modest boat cost.

Others here cannot afford to assume that risk. I am in the second category. That's why I have a All risk policy. I hope to never need the coverage, but am glad it will be there should the need arise.

My point in different words, I can afford the physical loss of the boat out of pocket [Under 50,000 $] The cost of a pollution due to sinking or loss of liquids can run into the thousands.It is those issues that reflect the great equalizer. It is this fear which makes me eager to have said policy. Same with damage to your craft by my accidental negligence. While the potential for out of pocket cost would be less than the pollution potential, knowing that your craft will be repaired is a comfort.
There was no intent to ridicule the obvious difference in insurance premiums between high value and modest value boats.

 

[swampu]

I have a survey on the way, my biggest hurdle is the fact that it's fiberglass over wood, it was don't professionally back in the 70's but it is still fiberglass over wood. Edit: And the fact that I live in Biloxi MS. Gets windy here ever now and then.

 

[rwidman]

I have a survey on the way, my biggest hurdle is the fact that it's fiberglass over wood, it was don't professionally back in the 70's but it is still fiberglass over wood. Edit: And the fact that I live in Biloxi MS. Gets windy here ever now and then.

You can still get quotes from several companies. And like I suggested earlier, you may want to consider deleting certain coverages if it will lower the cost.