Insurance or not?

[rwidman]

It is a mistake to think that you can be careful enough boating to never expose yourself to a liability claim.

It is a mistake to think that your exposure to a liability claim depends on the size or cost of your boat.

And it is a mistake to think that if nobody on this forum ever had a particular thing happen to them that it has never happened to anyone or will never happen to anyone.

 

[psneeld]

But insurance isnt about absolutes, its about probabilities.....on both sides of the policy.

You do have some contols like the insurance company, but both sides do have unknowns to gamble on.

For those with less expensive boats, the hull insurance premiums seem out of proportion to me.... liability is relatively cheap even for liveaboards.

So if some want to roll the dice on a less expensive boat...run the numbers, the insurance company has and is betting you wont have a claim...

 

[rwidman]

WesK,

Good point, but how about 10 million, or 100 million. There will be claims for that, too. You might as well have coverage for it all. You're not going naked above 10 million are you?

First of all, with liability insurance, the company will defend you, you don't have to pay for your own attorney. And remember, anyone can sue you at any time.

Second, your level of coverage is a judgement call and depends in part on your own financial worth and your perceived risk. The higher your coverage, the lower the cost per dollar. Two million does not cost twice what one million costs and ten million doesn't cost five times what two million costs.

 

[john61ct]

Not sure what a $500 floor is, but 5% would be brutally high! Heck you'd pay for a new boat in about 13 years... plus the deductible. Wouldn't make much sense.

Floor means minimum, most boats are worth far less than $10,000.

OK, maybe a sliding scale, 5% for between $10-50,000, 4% for 50- half mill, 3% for 500k-5mill, 2% for 5mill and up.

Build the pool so more environmental damage actually gets addressed.

And remember based on assessed market value not some random number.

 

[john61ct]

My insurance, hull and liability is about 1% of the agreed value per year, and although I wish it were cheaper, I am happy to pay it.

Wow, didn't realize so cheap.

So revise my proposed numbers way down, but y'all get the general idea.

At that rate $500 a year covers a $50,000 boat, maybe make it $100 for the average tiny ones, or only start at 20 footers, I guess kayaks don't doo much damage

 

[psneeld]

My liveaboard policy for a $50,000 agreed upon value is $1850.

Liveaboard jumped the liability and personal property over $300.

So you see, older, more inexpensive boats are an insurance drain for what they cover.

Had I not just sent in a bunch of updated info, they wrre dropping any coverage bases on drivetrain issues.

 

[Chrisjs]

One way to make the insurance premium more palatable for some is to carry a higher than average deductible. On our Selene (hull value $500K) we carried a $10K deductible. Premium cost for New England was about $2,250 with highly reputable insurance company and broker. When we cruised full year, if memory serves right, the premium bumped to about $3K with usual requirement to be north of Florida for the hurricane season (for obvious reasons!). The premiums quoted were for still good in 2014 when we sold the boat. I think it is high risk to not carry some hull insurance, but absolutely crazy and irresponsible to not have liability coverage.

 

[Benthic2]

its important to note that you are paying for more than the cost to repair or replace your boat. You are paying for the reduced uncertainty. You know that when your boat is damaged, you will be responsible up to the cost of your deductable. It is similar to buying options in the stock market. They have a value to the owner, even if they are not excercised. Even if you didn't file a claim last year, you got a financial benefit from your insurance by having a cap on what your repair/replacement cost could have been.

As for figuring out how many years of premiums it takes to replace your boat and then self insuring if you think you can go that long without totalling your boat: That's a fallacy, because you never know when your boat will be damaged. If you decide to self insure because you think your 5% payment is too high, sure, just save your premium and in 20 years you can replace your boat. BUT...what if your boat is damaged next year ? Then you have to keep saving for 19 more years before you can replace your boat.

Insurance companies are not some inherently evil entities designed to take your money. They are very heavily regulated industries that have to justify their rates by showing actual data on what their costs are, and how they have calculated their rates. Each state has an Office of the Insurance Commissioner that has to approve all rates and the methods used to calculate them.

 

[Alaskan Sea-Duction]

This is the reason you carry insurance. The scum that sank my dock shed was not carring insurance. Now I am stuck footing the bill for clean up and replacement. Yes I am sueing the idiot, but that's just more money out of my pocket. It has also destroyed all our winter plans to see the grandkids and has put next years cruise to Alaska in serious jeopardy. I think at least liability insurance on boats should be mandatory.

 

[roguewave]

Insurance companies are not some inherently evil entities designed to take your money.

I must disagree on this point, insurance company's are like a licensed thief...that smiles whilst reaching into your back pocket.

 

[nodestination]

I believe that liability insurance should be mandatory.

 

[JustBob]

As we say in flying: "Crashing the simulator is one thing, crashing a real airplane is a whole `nother deal."

It's hard for me to imagine someone, after the fact, saying "yeah, I lost my $100,000 boat because I wouldn't pay $1,000 a year premium, but I'm good with that, and I'd make the same decision today."

 

[Seevee]

First of all, with liability insurance, the company will defend you, you don't have to pay for your own attorney. And remember, anyone can sue you at any time.

Second, your level of coverage is a judgement call and depends in part on your own financial worth and your perceived risk. The higher your coverage, the lower the cost per dollar. Two million does not cost twice what one million costs and ten million doesn't cost five times what two million costs.

WesK,

Your financial worth should have NOTHING to do with your responsibility to pay for YOUR negligence, and has nothing to do with your perceived risk.

By saying that..... you're saying that if your net worth is $100K, it's just fine to destroy a $500K boat and kill a few kids with only $100K worth of insurance.

 

[Seevee]

I believe that liability insurance should be mandatory.

Totally disagree on this.... how many folks don't have liability when it IS required, as in cars?

Why not require mandatory training? Make a LOT more sense.

How about Prevention instead of Payment for losses.

 

[CDreamer]

A while back on TF there was a story about a diver scrubbing the bottom of a yacht in Miami. Somehow the bow thruster was activated and the diver was killed.
Freak accident.

I would expect the boat owner is now involved in a wrongful death suit by the victims family. I won't argue whether that's reasonable but it's the 21st century...would you expect otherwise?
Depending on the outcome, I hope that owner is well-insured.

 

[psneeld]

But not everyone has $100,000 boats.

What about the $10 or $20,000 boat?

In 10 years the hull insurance premiums are almost the cost of the boat. Many here have gone decades without claims. So is it a huge gamble?

Plus with older boats, are you going to file for damage that professionally would cost 25% of the value of the boat? Or is thst owner more likely to do the repsir himself?

Again, yes to liability, but hull insurance sure can depend.

 

[Seevee]

As we say in flying: "Crashing the simulator is one thing, crashing a real airplane is a whole `nother deal."

It's hard for me to imagine someone, after the fact, saying "yeah, I lost my $100,000 boat because I wouldn't pay $1,000 a year premium, but I'm good with that, and I'd make the same decision today."

JustBob.....

Good point

 

[BandB]

Totally disagree on this.... how many folks don't have liability when it IS required, as in cars?

Why not require mandatory training? Make a LOT more sense.

How about Prevention instead of Payment for losses.

The best trained professionals are still subject to being imperfect. Most of the major accidents we read of are professionals.

 

[CDreamer]

Mandatory training would, presumably, reduce claims and lower premiums. But it would not eliminate accidents that harm others or others' property. Because they are, by definition, accidents.

 

[Chrisjs]

I hope the USN carries a lot of hull and liability insurance, especially on destroyers.

 

[Al]

As to liability insurance, in the areas we cruise it's mandatory, since lots of marinas require it.

Paul

Amen! This not the case here in Alaska. I made a purposeful attempt to initiate a mandatory minimum liability insurance policy to receive moorage in our public harbors. No Dice! Too much objection from the public to have the harbor board even discuss it. Okey- Now along side me is a piece of crap total twin gas 33 foot boat with now, a live aboard. No insurance. Yes, I carry it for the potential cost of sinking and facing a to me, huge cost for fuel containment or spill results. Secondary is the coverage for 'The Other Boat ' in a damage done situation. This is the coverage that fits the no insurance boat next to me. Were he to have an incident where my boat is damaged or lost, he would shrug his shoulders, and walk away. Sure, I can sue. Sue what? The kid has nothing, living on a shoe string. Sue the city for not having insurance requirement? Forget it!
Insurance is a moral requirement on my part. But then I don't throw crap out the car window while driving either.
Great to rant!!

 

[Al]

I believe that liability insurance should be mandatory.

Here here!!! in spades it should be mandatory!!

 

[CPseudonym]

Funny, I never had to purchase uninsured motorist protection until after California voters approved mandatory minimum auto liability insurance. It was always just covered before as part of my previous full coverage policy's.

Should the government... NO!!!

 

[JimTid]

Good or Bad

I must disagree on this point, insurance company's are like a licensed thief...that smiles whilst reaching into your back pocket.

There are many insurance choices. The policy language determines what is covered. Any ambiguity in the policy leans in favor of the insured. There is plenty of case law to support this contention. You pay for what you get when it comes to cost vs coverage.
You can pay an insurance company to assume the risk or you can share the risk with a high deductible or reduced coverage.
My marina was damaged by Irma. There are multiple boats on the bottom or on the rocks. The only owners who are not smiling are the ones who did not have insurance. The insurance companies pay the salvage operators to recover, remove and dispose of the boats, then pay the owners the stated value of the policy. If not for insurance companies lenders would not lend the money to buy the boat. Manufacturers would not build the boats. Boat builders would not have jobs. Marinas and repair facilities would not be available. When you purchase insurance you are contributing to the system that makes it work for all boaters. I hope I can continue to find coverage I can afford and never have to use it.

 

[Al]

There are many insurance choices. The policy language determines what is covered. Any ambiguity in the policy leans in favor of the insured. There is plenty of case law to support this contention. You pay for what you get when it comes to cost vs coverage.
You can pay an insurance company to assume the risk or you can share the risk with a high deductible or reduced coverage.
My marina was damaged by Irma. There are multiple boats on the bottom or on the rocks. The only owners who are not smiling are the ones who did not have insurance. The insurance companies pay the salvage operators to recover, remove and dispose of the boats, then pay the owners the stated value of the policy. If not for insurance companies lenders would not lend the money to buy the boat. Manufacturers would not build the boats. Boat builders would not have jobs. Marinas and repair facilities would not be available. When you purchase insurance you are contributing to the system that makes it work for all boaters. I hope I can continue to find coverage I can afford and never have to use it.

Here lies a quote reflecting common sense and reality.

 

[BruceK]

Hull insurance is discretionary, you can choose to cover it or not, you know what your maximum loss is and it`s your decision to insure it or not.
When it comes to liability, the figure that comes with my Policy is 10M. I know from professional experience a personal injury claim can use that or more(or less), and a property damage claim can be high too. If you are ok with bankruptcy, or so well off you can afford to pay, why worry about liability cover, you don`t need it. Unless maybe you think it is worth being covered and protecting your assets.
And from the point of some penniless person causing you/me damage, I`d certainly like them to have cover, in fact I think there should be a legal obligation to have that cover.
Now it gets messy. For motor accident cases causing personal injury,if the driver/owner is uninsured for personal injury, we have "The Nominal Defendant"(poor harried chap), funded out of premiums of those who do insure, who steps in, deals with the claim, and can then recover from the uninsured driver/owner if they are worth "powder and shot". Doesn`t extend to property insurance, be nice if it did, even nicer if it extended to boats.

 

[Seevee]

The best trained professionals are still subject to being imperfect. Most of the major accidents we read of are professionals.

BandB,

Look at the stats, that's just NOT correct. About 75% of the accidents the boater had NO training. Now, a professional probably has more exposure, but still the stats favor being a pro by a huge margin.

 

[FF]

"About 75% of the accidents the boater had NO training."

What percentage of boats are 20 ft or so?

 

[rwidman]

I must disagree on this point, insurance company's are like a licensed thief...that smiles whilst reaching into your back pocket.

That is not at all true and I hope deep down inside you know that.

You pay the premium and they take the risk. Insurance companies are regulated by the states. The "thieves" are the people who commit insurance fraud by sinking their own boats when they get behind in the payments or otherwise want to get rid of their boats. These people cause your rates to be higher than they would be otherwise.

 

[rwidman]

WesK,

Your financial worth should have NOTHING to do with your responsibility to pay for YOUR negligence, and has nothing to do with your perceived risk.

By saying that..... you're saying that if your net worth is $100K, it's just fine to destroy a $500K boat and kill a few kids with only $100K worth of insurance.

I don't know how on earth you managed to get that from what I posted. Go back and read my post again, this time with the thought of understanding what I posted not with the thought of how to argue with it.