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Old 09-18-2017, 06:22 PM   #38
Benthic2
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City: Boston Area
Join Date: Feb 2017
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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.
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