why boat insurance sucks

[Seevee]

While the Winns video was cute, I couldn't get thru all the BS and turned it off. What they said could have been said in two minute... and put the ads at the end.


However, the insurance industry IS brutal, and we are constantly judges by the mistakes of others. We are mostly thrown into the class of the masses and our premiums are based on their losses and tables over the years and the risk of what we are doing. So, if a tanker runs into a marine in Timbuktoo, your insurance is likely to go up as a recreational boater on the ICW.



And our premiums are also based on how well the insurance company invests those premium dollars. The may a stupid investment and you pay for it.



And, if you have a claim, God forbid, there is a likelihood that you will have a hassle getting paid. That used to be brutal, but has gotten a bit better.


Personally, I'd risk my companies dollars on the Winns before a lot of other risks. While 6 years is not a ton of experience, it's experience in what THEY do, and they seem prudent in their operation. Regardless of an insurance loss, ANY loss for them would be catastrophic, so they'll be super careful. And, I'd bet they have 99.5% more ocean experience that all of us here.


Personally, I could argue strongly to consider not having one's whole life savings in one basket and consider self insuring and spend the premiums on mitigating the risk. It makes good financial sense. If one factors in the premiums, deductibles, hassle with a loss, possibly lawyers, etc., insurance overall is a very poor financial expenditure.


And the insurance companies are out for only one thing... to make money on your premiums and can raise rates, drop coverage, move into different markets, don't pay claims and even go bankrupt and reform as a new company. However, very few insurance companies fail. Overall, it's a very profitable business. One can contribute to their profits as they see fit.

 

[psneeld]

Funny how the word "stereotype" has become a dirty word so much of the time but in the insurance business.....its hard not to imagine their underwtiter tables/ algorithms aren't exactly that.

Please tell me I am wrong...

 

[Hippocampus]

PS agree with most things you’re saying except one point. Experience doesn’t mean you’ve actually learned anything. Seen many with impressive resumes who either through hubris, testosterone or lack of intelligence have muddled through and gotten little or nothing from their experience.
Our perspectives are different. Totally have great respect for your experience dealing with when the fecal matter hits the rotating blade but the goal is to avoid those occurrences and be prepared when and if they occur. This is a matter of putting your ego on the shelf and knowing what you/your boat can do and not do. Putting emotion aside and having foresight, using the tools available to you.
I’ve never been refused for insurance. I feel insurance mindset has shifted during the time I’ve been boating. Think they view it as too much trouble with not enough reward to deal with the outliers. Voyaging on power or even sail is a very small niche market. I’ve had to change insurers several times not because of individual refusal but rather due to the entire company withdrawing from that market. Claims made for that activity aren’t salvage, repair nor accidents. It’s either total loss or nothing. Was with a marine insurance broker for 12 days as he served as crew on passage. He explained why Pantaenius broke off their US market into another company. He explained how the shift in cyclonic storms impacted underwriting. He explained how history of claims made impacts premiums. He explained their view on tickets is quite similar to mine own. They are quite interested in passage experience when you want that coverage. But they won’t budge on number of crew.
Know several people who had to get certificates of competency to cruise Europe in spite of years and tens of thousands of miles of very extensive international cruising.
I insured with pantaenius for awhile before the split Then had drinks with a stranded cruiser. He told me he was waiting on a claim. From my broker friend I understood insurance’s bottom line came predominantly from investment income not premiums. The longer they hold your money they make more money. Now as a US citizen you don’t have standing in British court. So my fellow cruiser had to hire a maritime lawyer to get his claim moved along. He wasn’t upset by the additional expense but rather how long it was taking. I shifted to a US underwriter.
I don’t have loans on my boats but still don’t self insure. Cost of a boat is cost in minus residual value out. For me and most folks I couldn’t absorb a total loss without significant pain. BTW don’t know of any marinas now that don’t immediately ask for proof of liability insurance in order to let you in. They won’t take anything else.

 

[markbarendt]

Funny how the word "stereotype" has become a dirty word so much of the time but in the insurance business.....its hard not to imagine their underwtiter tables/ algorithms aren't exactly that.

Please tell me I am wrong...

There is a joke in the life insurance biz that goes - An underwriter can tell you exactly how many people will die in (for example) Chicago tonight but, if you want their names you'll have to talk Guido in the back of the bar at 3rd and Main.

 

[psneeld]

PS agree with most things you’re saying except one point. Experience doesn’t mean you’ve actually learned anything. Seen many with impressive resumes who either through hubris, testosterone or lack of intelligence have muddled through and gotten little or nothing from their experience.
Our perspectives are different. Totally have great respect for your experience dealing with when the fecal matter hits the rotating blade but the goal is to avoid those occurrences and be prepared when and if they occur. This is a matter of putting your ego on the shelf and knowing what you/your boat can do and not do. Putting emotion aside and having foresight, using the tools available to you. ....... edit the rest....

I wasn't going to keep posting and I hope I don't unless someone specifically addresses me..

Anyone that has really followed my posts would know I am the first one to say that experience measured by years, or miles or crossings, etc doesn't mean squat. Thus my post in another threadabout that a guy who crossen one ocean and goes on the lecture circuit is often just passing along book or school related training.

I used to think I was pretty up on boating. Then after 35 years seeing how boaters get into trouble, being the guy who resolved it or fixed the broken stuff or installed the safety gear...along with actually recreationally boating all that time.....I look at all this internet stuff and sometimes clearly see those that regurgitate things they have heard but have never been involved with....and they stand out pretty well. I realized a year or two doing what I have taught me more than the first 20+ years of recreational boating that I was fully committed to.

People that know me well will tell you that my ego usually only gets in the way when I see someone who is going to hurt me, my friends or some innocent bystander.

I am the last one to walk the docks and offer to do something (as in help docking) or say something till its a critical time. No one wants my opinion generally, so I usually don't give it (anymore).... until they know bad things are starting to happen.

Many of my posts are about tidbits that may or may not help if someone asks a question. Unless I have deluded myself, I try and not give advice with ego attached, but I find myself mostly posting to dispute claims or advice I think is incorrect or incomplete or out of context.

So if you or anyone else finds my posts argumentative with theirs, it may be because there might be more to the story out there and other readers might like to be aware of it.

 

[markbarendt]

While the Winns video was cute, I couldn't get thru all the BS and turned it off. What they said could have been said in two minute... and put the ads at the end.


However, the insurance industry IS brutal, and we are constantly judges by the mistakes of others. We are mostly thrown into the class of the masses and our premiums are based on their losses and tables over the years and the risk of what we are doing. So, if a tanker runs into a marine in Timbuktoo, your insurance is likely to go up as a recreational boater on the ICW.



And our premiums are also based on how well the insurance company invests those premium dollars. The may a stupid investment and you pay for it.



And, if you have a claim, God forbid, there is a likelihood that you will have a hassle getting paid. That used to be brutal, but has gotten a bit better.


Personally, I'd risk my companies dollars on the Winns before a lot of other risks. While 6 years is not a ton of experience, it's experience in what THEY do, and they seem prudent in their operation. Regardless of an insurance loss, ANY loss for them would be catastrophic, so they'll be super careful. And, I'd bet they have 99.5% more ocean experience that all of us here.


Personally, I could argue strongly to consider not having one's whole life savings in one basket and consider self insuring and spend the premiums on mitigating the risk. It makes good financial sense. If one factors in the premiums, deductibles, hassle with a loss, possibly lawyers, etc., insurance overall is a very poor financial expenditure.


And the insurance companies are out for only one thing... to make money on your premiums and can raise rates, drop coverage, move into different markets, don't pay claims and even go bankrupt and reform as a new company. However, very few insurance companies fail. Overall, it's a very profitable business. One can contribute to their profits as they see fit.

Another disheartening insurance fact is that contracts are pooled. When you buy a policy you are put into a 'pool' with a bunch of other people who bought the same basic product at the same basic time. As these pools 'age' the normal progression is that the pool becomes riskier. In P&C there may be a hurricane and that 'pool' needs a rate increase to compensate.

The problem for the public is that people with 'other options' jump out of 'your pool' and into a 'new pool' and the people without options start into a rate increase death spiral. All the while your insurance company is selling new customers a 'new improved product' in a 'new pool'.

-----

My uncle gave me some good advice many years ago. "Only insure things you can't afford to lose."

Regarding your thought of not putting all of ones life savings in one bucket, well, systemically the basic reason for 'insuring against a personal loss' is to be able to take bigger risks in life and business without facing personal financial ruin. This comes in many forms, not just insurance policies, and always at a price. CDO's, short selling, venture capital, an unsecured loan, legal bankruptcy... there a many ways to skin that cat.

(Liability insurance is another animal altogether.)

 

[SteveK]

Funny how the word "stereotype" has become a dirty word so much of the time but in the insurance business.....its hard not to imagine their underwtiter tables/ algorithms aren't exactly that.

Please tell me I am wrong...

Well I wanted to say you were wrong because you asked and then you say this;

Anyone that has really followed my posts would know I am the first one to say that experience measured by years, or miles or crossings, etc doesn't mean squat

What I tried to say in less words and you did not understand my meaning. Is experience having done something once, or a number of times that can be repeated?

The young couple, thread topic, have repeated daily certain functions required to move the boat. They have gained experience in doing that in shorter time than most.
As for insurance, well I suspect they are playing the numbers game, the odds are that sooner or later this couple will have a claim as they continue the journey.

 

[psneeld]

Well I wanted to say you were wrong because you asked and then you say this;


What I tried to say in less words and you did not understand my meaning. Is experience having done something once, or a number of times that can be repeated?

The young couple, thread topic, have repeated daily certain functions required to move the boat. They have gained experience in doing that in shorter time than most.
As for insurance, well I suspect they are playing the numbers game, the odds are that sooner or later this couple will have a claim as they continue the journey.

I still am not sure of what you mean as just doing the same thing every day doesn't mean you have more than the most basic of skills down pat. The chances are someone gets more varied experience by doing it over a longer period of time. Like 4 season cruising versus just 1 month of summer cruising. But that can go all over the place too.



While I agree that insurers may not be really doing in depth risk analysis on all of us....they only have to do it enough to give you a better break than the high risk guy, still make money and sorta keep everyone happy.



So if it sounds like I am talking both sides of the fence is because I am.


It usually happens when something is inherently unfair yet those are the rules....what will ever change the rules???? I have no clue.

 

[Seevee]

Well I wanted to say you were wrong because you asked and then you say this;


What I tried to say in less words and you did not understand my meaning. Is experience having done something once, or a number of times that can be repeated?

The young couple, thread topic, have repeated daily certain functions required to move the boat. They have gained experience in doing that in shorter time than most.
As for insurance, well I suspect they are playing the numbers game, the odds are that sooner or later this couple will have a claim as they continue the journey.

Well, maybe, maybe not. There are folks that have had zero claims for many many years, even lifetimes, and with boating that would not be hard.



Yes, as time goes on, there's more time to have something go wrong. But, if you live long enough you will never recoup the premiums by having losses, unless you're really a high risk person. And, if you're just "better than average" you can do way better without insurance.



But some folks don't have enough of a lifetime to recover from a loss that wipes out there entire net worth, unless they are a kid. So, they insure to reduce the risk. So they buy the coverage they feel is worth the risk.

 

[BandB]

Straight answers maybe?

When I bought my boat late last year, an all cash deal, I did my due diligence and provided my boating resume, got a quote on the exact boat I'd made an offer on, told the agent exactly what I planned to do with the boat and where it was going to reside, how it was going to get there, had it on the hard with people ready to address the issues we found in the survey, provided my credit report info and all that jazz...

Got the quote back, and the word from the agent that said, yeah we'd be happy to insure you and the boat for $x,xxx.

Ticked that last box on my due diligence list and finalized the sale on the strength of that answer.

Takes a couple weeks to sort out the details and get it through escrow, title work and such.

Send in a copy of the bill of sale to the agent and the next day, as I remember, the insurance company essentially says, "Sorry, we didn't really mean it, you don't have enough experience".

WTF? As far as I can see, the only thing that changed in the whole bloody situation was that a new bean counter one floor up had to do the final sign-off.

Had to scramble to find a new deal, it worked out but what a f------ pain in the arse at a point in the deal where there's no choice but to find something.

I have seen this general scenario play out over and over in my life in home and auto, and in my client's lives in my work in the health insurance business for over 20 years, and in stories from my buddy agents in P&C, and like the Wynn's, I'm sick of it.

It is for reasons such as your situation, I strongly advise the use of marine insurance brokers, not general insurance agents. Things change rapidly in marine insurance. A good broker anticipates and knows what is happening and they also have alternatives. They wouldn't come back to you saying we can't insure, but would say, "The company we initially talked to won't now accept it without a captain for x time or something of that sort, but we were able to place you with this company at this price."

Marine insurance is far too specialized for most general agents to handle it well. This also applies to the policy you ultimately get and the possibility it excludes something important.

As to the Wynn's, none of us know why they weren't insured and they're not likely at all to be telling the whole story.

Your story on the other hand describes well the failure of an agent to assist you professionally.

 

[Benthic2]

I think the video was misleading and self serving. The Wynns cry foul because their rates are going up even though they are more experienced. What they didn't call attention too was that they are partaking in riskier and riskier types of cruising. Originally they were limited to just the southeast US, and now they have progressed to crossing oceans. I think their assumed risk is increasing faster then their experience, and THAT is why their rates are going up.

 

[Hippocampus]

PS I hope you didn’t misconstrue my post. Clearly you’re not one to put ego, hubris nor testosterone in the way of learning and safety. I’m glad you agree the metrics many use to define an old salt are incorrect. Seems we agree about most things.
I routinely get off my boat when someone is coming in a slip near me and walk over. Just to catch a line or help as necessary. But I keep my mouth closed unless asked a question.

 

[cafesport]

Insurance rates are more about location and the pool size than experience. Lots of big strong typhoons and few places to hide down there, plus waay out of psneld’s helo operating range.

The available pool of cruising and premium paying boats has shrunk considerably due to COVID further increasing the risk to providers.

Similar thing happened here in Florida after several hurricanes in a short period of time. I couldn’t get insurance for hurricane season at my home dock for the last few years, not a big deal though until COVID. Last year I remained in Florida, but I rented a hurricane rated dock for six months. I had no coverage for named storms, but the boat was secure and my liability umbrella was in place to cover a worst case loss scenario.

In the end it’s all about your own personal risk tolerance. They appear young enough to start over if they lost the boat. They wouldn’t be the first or last to try that new adventure. If I were in their shoes I wouldn’t sweat it too much as long as I could get liability coverage. In many ways it could force them to act more responsibly. There are many cruising areas that aren’t insurable at any cost right now. If you want to cruise those areas then you are on your own. Kinda like it used to be.

 

[BandB]

Insurance rates are more about location and the pool size than experience. Lots of big strong typhoons and few places to hide down there, plus waay out of psneld’s helo operating range.

The available pool of cruising and premium paying boats has shrunk considerably due to COVID further increasing the risk to providers.

Similar thing happened here in Florida after several hurricanes in a short period of time. I couldn’t get insurance for hurricane season at my home dock for the last few years, not a big deal though until COVID. Last year I remained in Florida, but I rented a hurricane rated dock for six months. I had no coverage for named storms, but the boat was secure and my liability umbrella was in place to cover a worst case loss scenario.

In the end it’s all about your own personal risk tolerance. They appear young enough to start over if they lost the boat. They wouldn’t be the first or last to try that new adventure. If I were in their shoes I wouldn’t sweat it too much as long as I could get liability coverage. In many ways it could force them to act more responsibly. There are many cruising areas that aren’t insurable at any cost right now. If you want to cruise those areas then you are on your own. Kinda like it used to be.

And yet, we're in Fort Lauderdale and had continued coverage including coverage during named storms.

A word of caution. If you're not covered under a marine policy for damage to your boat, then your umbrella will not kick in unless it's written with some specific clause including uninsured damages. But it's designed to be over the policy and to cover amounts beyond the regular policy. If the regular policy pays even $1, then the umbrella will kick in, but if it pays nothing and considers you to have no coverage for a time or event, an umbrella typically will not kick in. Yours may but just make sure you confirm that.

I'm confused by your statement that the available pool of insured boats has shrunk since boat sales were so strong in 2020. Why do you think it's shrunk?

 

[slowgoesit]

I'm confused by your statement that the available pool of insured boats has shrunk since boat sales were so strong in 2020. Why do you think it's shrunk?

BandB, I took his comment to refer to the number of boaters cruising in the South Pacific, like the Wynns. Many less boaters cruising there this year than in previous years, so the pool of insured boats (in that area) has likely decreased.

 

[BruceK]

It`s not all one way in underwriting.
Long experience could lead to overconfidence, a danger in itself. Long experience might also reflect age, which could be a negative in terms of the mental acuity required in difficult situations.

 

[BandB]

It`s not all one way in underwriting.
Long experience could lead to overconfidence, a danger in itself. Long experience might also reflect age, which could be a negative in terms of the mental acuity required in difficult situations.

Publicity seeking and commercialization of boating might not be attractive to insurers either. They can access the videos just like anyone else.

Everyone is using social media now and by everyone I'm not referring just to those posting their stories. I'm referring to police, to game wardens, to employers, to schools (including schools of children looking at parents), to landlords, and to insurers.

 

[Seevee]

Publicity seeking and commercialization of boating might not be attractive to insurers either. They can access the videos just like anyone else.

Everyone is using social media now and by everyone I'm not referring just to those posting their stories. I'm referring to police, to game wardens, to employers, to schools (including schools of children looking at parents), to landlords, and to insurers.

BandB,


Question: Why would the insurance company care about commercialization of boating?



And not all of us use social media....and yes, risky.

 

[markbarendt]

BandB,


Question: Why would the insurance company care about commercialization of boating?



And not all of us use social media....and yes, risky.

I think the word commercialization, isn't really apt in context, way too vague. It also spins the idea to place the blame in the wrong place.

At it's core, the Wynn's and all the sailing and trawler channels are 'offering' or 'selling the rest of us a dream': the romance of the ocean and travel, of saying screw the man I'm outta here.

My boat purchase is proof, my wife's willingness to participate in this dream is due in no small part to the Wynn's and others who have shown that type of life choice has merit and is really possible.

So if I massage BandB's statement using less vague words the idea becomes truly absurd in a business sense.

Original idea

Publicity seeking and commercialization of boating might not be attractive to insurers

My first massage of that idea

Advertising and more boaters to sell insurance policies to might not be attractive to insurers

My first massage is absurd because the insurance company, like any business, always wants good publicity and more clients.

Now my second massage of the idea

Bad press from YouTube influencers might not be attractive to insurers

This second massage of the idea is not an absurd statement.

A few months back the Wynns were actually successful in shaming a drug company/insurance company into helping a guy with cancer get the pills he needed.

The tactic the Wynns are using is actually a well worn staple of TV news reporters sticking it to the man when a little guy is getting screwed. The tactic is at least as old as I am and yeah, businesses hate it.

 

[BandB]

BandB,


Question: Why would the insurance company care about commercialization of boating?



And not all of us use social media....and yes, risky.

Publicity hounds are not attractive to them, especially those trying to show how adventurous and daring they are and when everything is publicized. Also, just like commercial users such as charterers, they'd figure more usage, more risks. They might fear what the boaters would do next to grab the attention of their fans. Just look now at the publicity over difficulty getting insurance (where only one side of the story is known). If there's an accident or claim, do they want to deal with the same approach on behalf of the insured?

 

[markbarendt]

Publicity hounds are not attractive to them, especially those trying to show how adventurous and daring they are and when everything is publicized. Also, just like commercial users such as charterers, they'd figure more usage, more risks. They might fear what the boaters would do next to grab the attention of their fans. Just look now at the publicity over difficulty getting insurance (where only one side of the story is known). If there's an accident or claim, do they want to deal with the same approach on behalf of the insured?

Sure, there is more risk with any increased use of a boat (or whatever), so what? All the insurer has to do is itemize a line item for that extra use. Live-aboards know they pay extra, commercial fishers pay more yet. These aren't abnormal things.

As to the fear of somebody doing something stupid for clicks, yep there are lots that do but their business model is built on that.

The Wynns in this example though are to a great extent constrained by their audience, the Wynn's credibility/branding lies in building trust with their audience.

Another way to get clicks is talking about stuff that's a pain in the arse that people have to have. That's what the Wynns have done here.

 

[BandB]

Another way to get clicks is talking about stuff that's a pain in the arse that people have to have. That's what the Wynns have done here.

Yes, and talking negatively about insurance, isn't likely to help them.

 

[markbarendt]

Yes, and talking negatively about insurance, isn't likely to help them.

You have very little faith in the free market. Some enterprising agent out there might want their audiences attention.

My problems are someone else's opportunities.

 

[BandB]

You have very little faith in the free market. Some enterprising agent out there might want their audiences attention.

My problems are someone else's opportunities.

Agents don't get to make those decisions. Yes, some company might decide they'd be good advertising and promotional people for them and put them in commercials. I'd rather see them in some commercials than more Chris Paul. Still the Gecko will remain my favorite.

 

[Benthic2]

A large factor in the cost of insurance is your credit rating. (People with bad credit make more claims than people with good credit. ) I am sure the Wynn's chosen lifestyle of depending on handouts and advertisers is not what most insurance companies consider ideal. As more and more people try to do what they do the competition for viewers will get greater, and their income will decrease. They could be forced to resort to riskier behavior to keep their audience.

 

[markpierce]

High credit rating, no claims, no increased coverage, yet my boat insurance premiums rise. Isn't this the norm?

 

[Alaskaflyer]

High credit rating, no claims, no increased coverage, yet my boat insurance premiums rise. Isn't this the norm?

...reduced coverage limits...

 

[Prospective]

I'm a little surprised at some of the disdain and skepticism of The Wynn's and this video. Did everyone commenting watch the whole thing? They ultimately did get insurance that was suitable to them without the requirements that were proving challenging. Their principle issue was their challenge in meeting the requirements of certain carriers like 3 person crew, cyclone exclusion, or haulout/survey while stuck in Tonga in the age of Corona. They also pointed out that their initial expectation that insurance would become easier to acquire as they gained experience has proven false for a variety of reasons that we've all seen including increased storm losses, fewer carriers in the market, and Corona shutting down global cruising.

They never said they couldn't get insurance or that their experience level was the major hurdle which seems unsurprising. They also did use insurance brokers who told them they were having trouble finding suitable coverage and explained why. So not clear on the suspicion that they aren't telling the whole story.

The whole "experience" conversation ultimately seems tangential to this video and does not appear to be the problem. These guys are doing something many of us only dream of and doing it pretty well, all while taking the time to share their experience with the rest of us.

 

[rsn48]

I love it when people don't do their homework like watch a lot of Wynn's vlogs yet are experts on them. I often mirror this type of behaviour when I post something like this, you'll see me do it from time to time.

"I have never been to the east coast, I have never been on a boat on the east coast, therefore I am an expert on the east coast." (This is a bit of a lie, took a Royal Caribbean 11 night cruise to the Caribbean beginning in Baltimore - that probably makes me even more of an expert...lol)

There are so many comments in this thread about the Wynn's that clearly show the person has never watched their offerings. But I'll have fun with one:

I am sure the Wynn's chosen lifestyle of depending on handouts and advertisers is not what most insurance companies consider ideal.

So this is a video estimating what the Wynn's make, but pay attention as revenue streams are left out, what this guy estimates is their "base" income before all the other goodies are added in like sponsors, you know that advertisement in their video that some here complained about. Beyound this video it is estimated that the Wynn's make about $100,000/year for the Youtube vlog. The other thing you need to know if you don't follow vlogs, they are a lot of work. Even Fleming of Fleming yachts has talked about how much work his videos are.

[Jump to the 15 second mark to miss this guys pitch to have you subscribe to his channed]

 

[psneeld]

Taking time to share?


I wonder how many VLOGs would exist with no chance of making money.