Poll: Insurance

[Nomad Willy]

BanB,
I haven't done boating all my life. Started in 49 on my fathers boat .. 103'.
When I was 12 I built my first boat. A canvas covered kayak.
Then roughly in the 80's I did flying and during those 20 years the only boating I did was canoeing. I even have three canoes now but I quit flying w/o much looking back.
I could quit boating again but I'd rather not.

So I drive carefully w all the skill I've got.


Kev rm,
Yes. That's what I'm doing now. I know that looking after my body is the best thing I can do to preserving my boating experience.


FlyWright,
Al that brings up a good question. Is our lifestyle the kind of boat we have and how we use it? Or is our lifestyle how we eat, what cloths we wear, what music we like or do we like music at all, do we understand art and recognize it when we see it, do we read really good books or do we read trash, do we read about the world or only how to do things.

I think this business of calling trawlering one's lifestyle is nonsense. It's part of our lifestyle. Our real lifestyle is what kind of person we are. And that is what we do and think that makes us who we are. And boating doesn't have much to do w that. Riding motorcycles, running boats, gardening, hiking, dancing, making music ...

But if a person does nothing but trawlering, calling it a lifestyle I suppose is correct or just. But for most of us it's just part of our lifestyle.

 

[rwidman]

Did insurance (product development not sales side) for a long time . Loss costs (what you get back) you should think about as 40%. 20% to agent 30% to administration 10% profit. Emotional benefits abound but not long term financial benefit. (Given average luck of the draw and not including fraud)

Do you have insurance on your home? Your vehicles? Your health?, Your life?

I think most of the rest of us do.

 

[kev_rm]

Do you have insurance on your home? Your vehicles? Your health?, Your life?

I think most of the rest of us do.

I buy a lot of insurance products. I have perhaps 40 or 50 policies in force. Most of them because they are compulsory. Title insurance is the absolute worst atrocity among them - literally should be a illegal. ~15% loss ratio.

My point is if anyone who has some level of positive net worth really thinks property insurance products are a financial gain in the long run.. they are misleading themselves or contemplating fraud. They are fundamentally a promise - a promise that makes you feel better, not actually financially better.

Think about it this way - If your 401k funds had expense ratios of 50% literally you would not put a single dollar into it. Weird to me people sort of ignore this fact with insurance.

 

[FlyWright]

Do you have insurance on your home? Your vehicles? Your health?, Your life?

I think most of the rest of us do.

 

[Steve]

I have been to at least one marina where they wanted proof of liability insurance, a copy of the declarations page. I had the insurance but not that paperwork on the boat so I had to have it faxed to them.

 

[FlyWright]

I email .pdf files to my marina every year. I use an app CamScanner on my droid phone to easily grab a pdf file of the paper renewal.

 

[BandB]

I email .pdf files to my marina every year. I use an app CamScanner on my droid phone to easily grab a pdf file of the paper renewal.

We scan every document of importance we ever receive and convert to PDF's. Then we can email or print a copy anytime one is needed. We have been asked several times in the Caribbean and times when we've docked for three or four weeks in the US.

 

[ranger58sb]

A couple general comments:

I do have to give our home marina a copy of our insurance rider every year. Haven't been asked at transient marinas, but could do if necessary.

The numbers some have mentioned here seem really high, to me. Our "full" coverage is slightly less than .6 percent of agreed hull value. Assuming my calculator did the math correctly.

-Chris

 

[danderer]

The numbers some have mentioned here seem really high, to me. Our "full" coverage is slightly less than .6 percent of agreed hull value.

Us too. Maybe the Chesapeake just has better boaters.

 

[BandB]

Us too. Maybe the Chesapeake just has better boaters.

A lot of the variation is size and age of boat. Ours are newer boats and our percentage is far below what many here are talking of. With an older lower value boat, the rates as a percent will be higher. It's the same with a car. You'll pay very nearly as much to insure a 10 year old $3000 car as a new $20,000 car. Two reasons:

First, liability is the same dollar amount.
Second, very few claims on a $20k car are for total of car or would exceed $5,000. Many claims on an older car would total it or be a substantial percentage of it's value.

 

[Seevee]

I buy a lot of insurance products. I have perhaps 40 or 50 policies in force. Most of them because they are compulsory. Title insurance is the absolute worst atrocity among them - literally should be a illegal. ~15% loss ratio.

My point is if anyone who has some level of positive net worth really thinks property insurance products are a financial gain in the long run.. they are misleading themselves or contemplating fraud. They are fundamentally a promise - a promise that makes you feel better, not actually financially better.

Think about it this way - If your 401k funds had expense ratios of 50% literally you would not put a single dollar into it. Weird to me people sort of ignore this fact with insurance.

As for property insurance, I could argue strongly against it. But title insurance, if the seller has a lot of questions, ex wives, dysfunctional family, I'll buy it, but a solid single guy whose owned it for 20 years, don't need it.

Your comment on 401Ks are good, but fortunately most all insurance doesn't have 50% expense ratios.

 

[Seevee]

WifeyBee wrote;
"I waste money, but I don't consider insurance to be a waste. I sleep better knowing I have it. Somewhere I heard emotions criticized, but emotions are very important in life. I'd hate to be emotionless or in a world without emotions.

Some might say having many boats or many anchors is a waste of money."

HaHa WB,
All my boats and anchors aren't worth more than my annual income. And I didn't criticize emotions. You've even ginen me some of them ... nawww just kid'in.
Actually a good question would be what percentage of one's net worth is the value of their boat? I'm at 10%. My newest car is only worth 12K. Don't have comp on it either.



Perhaps I should join the crowd .. sell Willy and get a NT 32. Probably will sell Willy and get a little motor home in a few years anyway. And I've had more thoughts about a smaller boat like an Albin 25. And I'll buy insurance when I need it. Waste of money when I don't.

Norman,
Very good post, and you're spot on. Insurance is mostly a waste of money. But I have no issue with someone that wants that "safety net". I'm not a big believer of the net they are getting. You comment about just not putting a huge part of one's net worth into a toy.

 

[Seevee]

Mr. Willy... Since you make this statement I assume you carry no coverage, what is the value of your boat? I suspect it's not multiple hundreds of thousands. I pay cash for all my toys, I've owned my boat for 18 years and even depreciated today is worth a substantial amount. Why would I possibly want to incur a financial loss if I don't have to. Overall insurance is cheap.

mBevins,

No, insurance is NOT cheap. It's horribly expensive and does not make financial sense to have it.

It only makes sense if you feel like your a higher risk person, or just absolutely cannot afford to suffer the loss. Just think about it.... a lot of the premium you pay is NOT for claims. It's for commission, overhead and profit. It's kinda like gambling at Las Vegas. The house will always wind in the long run. They'll take a bit of the pot every time. So odds are against you. Same with insurance.

You ARE suffering a financial loss every time you pay the premium. So how far will you go?

 

[Seevee]

I don't think you will find much disagreement there. Again, we insure against risk that we can't take, or chose not to take. If your dirtside house burned down, you could afford to find a place to live, but do you have fire insurance on your house anyway? If so, it is because it is a risk that you chose not to take. The same is true, at the moment, on my boat. I would be hurt financially if I needed to replace the boat. That means either I get out of boating, or I jeopardize my retirement.

Of course I will pay more in premiums than I will get back in paid claims! Only an idiot would hope for the opposite.

dHays,

Well, maybe. Some folks figure out the risk vs benefit of insurance and choose to spend the premium money on other things. If you absolutely knew you would pay more in premiums that you'd get back in claims, you'd be an idiot for having insurance.

 

[Seevee]

Yes, odds are heavy I will lose. I hope to lose. And, no, it has nothing to do with just my being a good or awful risk. It only takes one time of a marina fire started by someone else or of the bridge tender dropping the bridge before I've cleared it (yes, this did happen in our area a couple of years ago, millions of damage to the boat and the owner's insurance had to pay as the government entities fought over responsibility) or one bunch of drunks out at night ramming into my boat while it's at a transient dock.

I try to be safe and take aggressive steps, but I can't protect against every possible thing that can happen.

Let me ask you this. If your boat was a 78' Nordhavn that cost $4 million used, would you still feel the same, be willing to take the chance and play the odds?

I don't control the odds on the actions of others.

BandB,

You're siting the absolute minority of risks that just don't happen much at all. How many people do you personally know that have had such rare events happen to them? I know none! And in our whole county it's very rare if such an accident happens. Last year my county of Pinellas had $219,600 in damage, can't find a dollar amount on law suits awards. We have almost 50,000 boats here, so look and the numbers. The vast majority of us could boat for 500 years without any accident or injury. I'd bet the vast majority of us in the older crowd have already done 40 or 50 years of safe boating.

I'm sure you put the odds in you favor... boating safely and being prudent with your operations. Sure, you can't protect yourself for everything... in any activity.

But why would you pay for insurance when the odds are clearly against you, unless you get a super deal, which is rare?

As for a $4 millions Nordhavn, that's above my pay grade and way too much of the net worth to consider. And I just don't need one.

But, FWIW, I just bought a 400 Mainship and the insurance is .004% of the worth. As a newby with this boat, I paid the premium for full coverage. Dirt cheap for a new guy. As I get more experience, I'll probably drop it. We'll see.

But, overall I'm way ahead, and betting on myself.

Again, I have no problem is one blows their money on insurance. Insurance is NOT and investment, it's an expense.

 

[kev_rm]

As for property insurance, I could argue strongly against it. But title insurance, if the seller has a lot of questions, ex wives, dysfunctional family, I'll buy it, but a solid single guy whose owned it for 20 years, don't need it.

Your comment on 401Ks are good, but fortunately most all insurance doesn't have 50% expense ratios.

Do you want to back that up with information about any specific carrier's numbers, which would include adding LAE (the overhead in the claims process) and the marketing expense (what the agent gets) ?

I am fairly confident 50 cents on the dollar is generous.

 

[Seevee]

Do you want to back that up with information about any specific carrier's numbers, which would include adding LAE (the overhead in the claims process) and the marketing expense (what the agent gets) ?

I am fairly confident 50 cents on the dollar is generous.

Not sure what you're asking, but if you want a statement you can google annual reports of insurance companies and see what the numbers are. One I found spent about 65% of their revenue on claims.

 

[Robster_in_edmonds]

Wow, lots of uneducated posts here. Anyone who owns a boat and operates it without insurance is a danger to the rest of us. If you're docking your boat, have trouble with winds and currents, and scrape my boat, doing $20,000 of damage, it's your insurance that will pay to fix my boat. Or, you could write the check yourself. Trouble is, most of the people who boat without insurance can't write a check for $20,000.

Let's say the same accident happens and the other boater leaves the scene. My insurance will pay for the repairs.

IMHO, if you boat without insurance you should have to post a $1 million bond in order to own a boat and operate it in public waterways. Everyone thinks they're the world's best captain until they're at fault in an accident.

 

[Nomad Willy]

Robster,
You need very badly to differentiate between liability insurance and comprehensive insurance to fix your boat. I have liability but have little use for comp.

 

[kev_rm]

Wow, lots of uneducated posts here. Anyone who owns a boat and operates it without insurance is a danger to the rest of us. If you're docking your boat, have trouble with winds and currents, and scrape my boat, doing $20,000 of damage, it's your insurance that will pay to fix my boat. Or, you could write the check yourself. Trouble is, most of the people who boat without insurance can't write a check for $20,000.

Let's say the same accident happens and the other boater leaves the scene. My insurance will pay for the repairs.

IMHO, if you boat without insurance you should have to post a $1 million bond in order to own a boat and operate it in public waterways. Everyone thinks they're the world's best captain until they're at fault in an accident.

You didn't read the "anti insurance" posts very well, I believe they were all caveated as property only (liability notwithstanding)

 

[BandB]

Robster,
You need very badly to differentiate between liability insurance and comprehensive insurance to fix your boat. I have liability but have little use for comp.

Robster, by nature of his example, was clearly referring to liability. However, I do agree that it would have been better had he stated that.

 

[dhays]

Wow, lots of uneducated posts here. Anyone who owns a boat and operates it without insurance is a danger to the rest of us. If you're docking your boat, have trouble with winds and currents, and scrape my boat, doing $20,000 of damage, it's your insurance that will pay to fix my boat. Or, you could write the check yourself. Trouble is, most of the people who boat without insurance can't write a check for $20,000.

Let's say the same accident happens and the other boater leaves the scene. My insurance will pay for the repairs.

IMHO, if you boat without insurance you should have to post a $1 million bond in order to own a boat and operate it in public waterways. Everyone thinks they're the world's best captain until they're at fault in an accident.

As Nomad pointed out, there is a difference in liability vs comprehensive. I don't know of anyone who has suggested not carrying liability insurance. If so, I would agree that they are irresponsible and simply placing their financial risk on the rest of us. However, comprehensive insurance in entirely different.

This does raise a question however. My auto policies (as most of you know) has an "uninsured motorist" provision. This is an insurance that will cover me if I am damaged by someone that is uninsured (illegal in my state). I don't know if my boat insurance has the same provision. This represents an unacceptable level of ignorance on my part.

 

[BandB]

I don't know of anyone who has suggested not carrying liability insurance. If so, I would agree that they are irresponsible and simply placing their financial risk on the rest of us.

Actually several have suggested it and 5 have indicated in the poll that they do not carry liability insurance.

 

[dhays]

Actually several have suggested it and 5 have indicated in the poll that they do not carry liability insurance.

I guessed I missed that because I can't imagine anyone being so callous and reckless.

 

[rwidman]

............... IMHO, if you boat without insurance you should have to post a $1 million bond in order to own a boat and operate it in public waterways. Everyone thinks they're the world's best captain until they're at fault in an accident.

And the same goes for operating a car, truck, motorcycle, etc.

They are called "accidents", not "intentionals" for a reason.

 

[Phyrcooler]

I just retired after 35 years in the fire service with a very large department. Unlike a lot of the anecdotal references, I spent most of my adult life being a part of what many considered the worst day of their lives. Only a small percentage make it to the news. Admittedly, this exposure to some pretty harsh realities has made me quite risk adverse.

People gamble (and yes, it's like gambling) with their actions, and level of preparedness. However, the pervasive takeaway from my career is way too many folks bank on "it won't happen to me". And then it did.

I get those who maybe have a boat worth $40,000 or even more and can make the decision to replace or walk away from its loss. Kudos to you. However, as shown by the percentage of folks that carry comprehensive, my guess is that most are not willing to accept that risk. I must say though, in my opinion, inferring that those who pay for comprehensive are wasting their money is either someone smug in their position in life, or sharing a rather myopic view. I would only hope that each one of you evaluate your position, not from your perception of probability, but rather a sincere assessment of what are your impacts if it DOES occur. Ultimately it is a personal decision.

 

[danderer]

I've been working lately on my policy renewal. I asked the broker what percentage of the customers they deal with even ask to see a copy of the policy before buying.

Answer: 5-10%.

 

[BandB]

I've been working lately on my policy renewal. I asked the broker what percentage of the customers they deal with even ask to see a copy of the policy before buying.

Answer: 5-10%.

I've never bought a policy without seeing it first. I just can't imagine doing so. You wouldn't buy a boat without seeing it first. Now, you say the boat costs far more, but a bad policy could end up costing you the same amount as the boat. I have on many occasions found out the policy didn't read in at least one area as represented by the broker. The broker did hundreds of policies from the insurer and didn't read them all and yet there were differences, not a single standard.

 

[dhays]

BandB, there is a difference between reading, and remembering. At least in my case. :-(

 

[BandB]

BandB, there is a difference between reading, and remembering. At least in my case. :-(

In all cases, but by reading you might avoid a major shock.