Downsides to being uninsured

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Liability only insurance. Then you only risk loosing the boat.
 
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My boat is my house. I would not let my house be uninsured.
 
OldDan1943 said:
My boat is my house. I would not let my house be uninsured.
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If you lived in a $10,000 double wide, and your insurance premium was going to be $2500 a year you may rethink your coverage A LOT.
 
cks said:
Respectfully, I take issue with your statement. Our club is in NY like you. I’ve had direct dealings with the NY DEC. Fuel spills in tidal waters is a very very bad situation. I have personally witnessed their “attentiveness” and tactics pertaining to spills from a fire. It’s brutal.

Having a clunker of a boat of consider size, worth for arguments sake say $20K will NOT limit your spill liability to that figure.

This is a bet that is fraught with danger.
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I think he is in Australia.

I worked at least a couple hundred recreational salvage in NJ and I don't think more that a handful ever resulted in a mandated cleanup. Some were at the "request" of the Marine Police or USCG we were asked to spread some absorbent pads around...only the few "official" paid for cleanups cost any extra above the salvage cost.
 
psneeld said:
If you lived in a $10,000 double wide, and your insurance premium was going to be $2500 a year you may rethink your coverage A LOT.
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My objection/question is not just because of cost. What if said double wide premium excluded wind damage (living in tornado alley), fire (timber framing) and water damage (20yo plumbing)? Very little risk remains covered for the $2500 premium.

It seems to me that the major issues are:

Liability - very unlikely but potentially VERY expensive
Marina access - a moot point for me as I don't use them
Haulout/maintenance access - available here if I sign a raft of waivers or use 2nd tier facilities.

I'm still investigating access to 2nd countries.....

Cheers.
 
Shrew said:
Liability only insurance. Then you only risk loosing the boat.
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Would liability only cover the boat dying on a haulout cradle(common here) or Travelift? I`m not sure.
The OP is not keen on insurance, understandably so. However unlikely as it is, not having liability cover is a big punt.

Ok if you have little in the way of assets and don`t mind the risk of getting saddled with a debt. Turns on your personal situation and appetite for risk.
 
In the US, I have to provide annual proof of insurance and the Marina must be named as additional insured on the insurance policy. In Canada, while using a yacht club’s reciprocal dock, I have been asked for insurance. Ditto while mooring for a week at a Marina other than my own in WA State. Also when mooring in Alaska.

Insurance is, to me, one of the costs of boating. Didn’t the insurance industry get its start insuring ships’ cargoes??
 
BruceK said:
Would liability only cover the boat dying on a haulout cradle(common here) or Travelift? I`m not sure.
The OP is not keen on insurance, understandably so. However unlikely as it is, not having liability cover is a big punt.

Ok if you have little in the way of assets and don`t mind the risk of getting saddled with a debt. Turns on your personal situation and appetite for risk.
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Liability Only covers the damage you cause to other people's property. It does not cover your boat itself. So if you break free and crash into my boat, liability only covers the damage you cause to my property, but not your own.

No, liability only would not cover damage during a haul-out.

The two questions I would be asking myself is

1) "If I cause damage to someone else's property, can I afford to pay for the damages I cause?"

If the answer to this is no, then get Liability Insurance.

2) "If I damage my boat, up to the point of total loss, can I cover the loss, or am I ok with simply loosing the boat?"

If the answer is no, then get Comprehensive Insurance.

It was said earlier that other countries are a bit more laid back than the US and not as litigious. To those, I would ask. If someone crashes into your boat and does damage, is the response really "Oh, no worries mate!" while you gladly pay for the damage caused by someone else out of your own pocket??
 
Spinner said:
In the US, I have to provide annual proof of insurance and the Marina must be named as additional insured on the insurance policy. In Canada, while using a yacht club’s reciprocal dock, I have been asked for insurance. Ditto while mooring for a week at a Marina other than my own in WA State. Also when mooring in Alaska.
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In all cases listed (above), they require Liability Insurance. They could care less about your assets. They only care about their assets and the assets of their other customers.
 
GoneDiving said:
Liability - very unlikely but potentially VERY expensive
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IMHO..If Liability Only insurance is too expensive, then it is doubtful you have the financial means to pay for the potential damage that you might cause to other people's property.

Liability insurance is likely one of the least expensive things you will need to pay for on a boat. If you find liability only insurance too expensive, you simply cannot afford to own a boat.
 
Shrew said:
IMHO..If Liability Only insurance is too expensive, then it is doubtful you have the financial means to pay for the potential damage that you might cause to other people's property.

Liability insurance is likely one of the least expensive things you will need to pay for on a boat. If you find liability only insurance too expensive, you simply cannot afford to own a boat.
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This is VERY correct. While there is no federal or state requirements for fiscal responsibility (as with auto insurance), there is a moral responsibility every boat owner has to others on the water. Further, as mentioned earlier, marinas, yards, and other facilities require the user to have liability minimums ot use their facilities.

Liability coverage is inexpensive- but the fallout from not having it can be catastrophic.
 
Shrew said:
It was said earlier that other countries are a bit more laid back than the US and not as litigious.
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I expressed the opinion in post #7 that other nations are not as litigious as the US. Let me make my thoughts a bit more clear. I was referring to massive settlements brought by skilled attorneys. I'll use two famous examples.

What do you think that BC ferry settlement would have been in the US? Yes, I know, I'm using a fast food empire and a public transportation entity in my comparison when we're discussing insurance for private boats. The point I'm making is the difference in the size of settlements in the US vs Canada.

I was involved in an incident many years ago. Complete loss of control in tight quarters with strong currents running. The final settlement to the injured party was insanely huge. Many times the costs to repair or even replace the boat with a new build. There were no personal injuries.

I'm not sure of your logic getting this next part of your post:
Shrew said:
To those, I would ask. If someone crashes into your boat and does damage, is the response really "Oh, no worries mate!" while you gladly pay for the damage caused by someone else out of your own pocket??
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As I understand it liability coverage on my policy in the US is designed to protect me financially from harm I cause to you. Not harm you cause to me. For that I carry coverage for the uninsured.

That said, I am in the US, a very litigious nation. I don't have the bank to hire top notch attorneys. Therefore I carry full coverage. The insurance is my protection against loses I cannot afford. As the boat ages I may consider dropping coverage for the boat itself. I doubt it. At about 1% of the agreed value coverage the risk benefit calculation just doesn't bear it out. I would never drop coverage for liability, pollution or uninsured.
 
GoneDiving said:
Thanks. I've never heard of this one. Would you expand, perhaps with some applicable countries. I doubt most of my nearby Asian countries would be included but I'll investigate.

Cheers
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Mexico comes to mind. Close to us, not so close for you. It seems to vary quite a bit around the world.
 
Shrew said:
IMHO..If Liability Only insurance is too expensive, then it is doubtful you have the financial means to pay for the potential damage that you might cause to other people's property.

Liability insurance is likely one of the least expensive things you will need to pay for on a boat. If you find liability only insurance too expensive, you simply cannot afford to own a boat.
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Shrew I think he was saying that your exposure to liability costs could be huge (although unlikely). Not that the premium costs are huge.
BD
 
GoneDiving said:
Thanks. I've never heard of this one. Would you expand, perhaps with some applicable countries. I doubt most of my nearby Asian countries would be included but I'll investigate.

Cheers
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Third party is a minimum requirement in Malaysia for entry
 
BDofMSP said:
Shrew I think he was saying that your exposure to liability costs could be huge (although unlikely). Not that the premium costs are huge.
BD
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Correct. My concern is not the cost per se, but what coverage I receive for that cost and the exclusions that are not covered at all.

With the number of exclusions I face, I'm clarifying exactly what financial AND practical implications I would face by self insuring or not using traditional providers. So far I have the real concern of 3rd party liability, hard stand access and some countries' access permission.

Everyone seems fixated on the financial risk but I haven't heard of too many practical limitations.

Thanks.
 
What a lot of people don't understand, and generally only find out AFTER there has been an accident/issue, is that their policy was a BAD policy, and for many losses, which were excluded in the coverage of their policy:nonono:, they were in fact "self insuring" ANYWAY!


So, any old insurance policy will give that feeling of comfort, but I want a policy that will continue to give me that feeling of comfort AFTER there has been a problem!:dance:
 
slowgoesit said:
what a lot of people don't understand, and generally only find out after there has been an accident/issue, is that their policy was a bad policy, and for many losses, which were excluded in the coverage of their policy:nonono:, they were in fact "self insuring" anyway!


So, any old insurance policy will give that feeling of comfort, but i want a policy that will continue to give me that feeling of comfort after there has been a problem!:dance:
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preach it, brother!!!
 
aircraft insurance parallel

My aircraft insurance has been changed by the insurer in recent years. The insurer has reduced the amount of liability we are allowed to carry. They found that whatever the coverage was is the amount they get sued for. When they started lowering liability coverage the lawsuits also lowered.

:ermm::ermm:
 
Why carry insurance?

Why carry insurance? Because the insurance company will hire the attorneys to defend you against a lawsuit. A minor injury accident with six-figure damages can still rack up a seven figure legal bill. You never want your title to change from "Captain" to "defendant", but in the event it does, you'll save 100x what you paid in premiums.
 
Every time I get my insurance bill, and then think about the fact that we have gone through a few hurricanes, with zero damage, I think about going to liability only. My wife talks me out of it every time.

One day, though....
 
Much of the US "litigious" reputation is due to a very small number of cases that make excellent headlines. Usually against large corporations with deep pockets.

Personal liability insurance is quite cheap in the US - so losses must be very small or the insurance companies couldn't make a profit.

And the most important reason to have liability insurance is that the insurance company lawyers handle the defense if you get sued-- at their cost. In most cases they settle it with the other insurance company long before it gets to court. Without their lawyers defending you (not to mention defending their money), I expect things would turn out much worse.

Not sure if this is available in Australia but in the US you can purchase "umbrella" insurance that provides additional liability coverage above the other policy limits. One umbrella covers all your risks - auto, home, personal - and boat.

My umbrella policy is with a different company than my yacht insurance but I just sent them a copy of the boat policy showing that the boat policy had $500k of liability insurance and they added the boat onto the $5M umbrella policy without any extra charge. The umbrella costs about $300 per million of coverage per year. A great bargain.
 
Pdxlou said:
Why carry insurance? Because the insurance company will hire the attorneys to defend you against a lawsuit.
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CarlF said:
Personal liability insurance is quite cheap in the US - so losses must be very small or the insurance companies couldn't make a profit.

And the most important reason to have liability insurance is that the insurance company lawyers handle the defense if you get sued-- at their cost. In most cases they settle it with the other insurance company long before it gets to court. Without their lawyers defending you (not to mention defending their money), I expect things would turn out much worse.

Not sure if this is available in Australia but in the US you can purchase "umbrella" insurance that provides additional liability coverage above the other policy limits. One umbrella covers all your risks - auto, home, personal - and boat.
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You are both correct in that insurance provides protection against litigation costs.

Another is that it protects against counterparty default. All of my Motor Vehicle insurance claims have been 1/the other party at fault and 2/they were penniless to repair either vehicle. This is where the insurers stepped in: my vehicle was repaired with no additional effort on my part and debt recovery was someone else's problem. Premiums vs repair costs is probably about even but with convenience and heart ache I'm way ahead.

Yes we have secondary insurers: my diving coverage only pays out after other insurances are exhausted or uncovered. That's why they appear so cheap: an insurance event needs to happen and it needs to be large enough to exhaust all other policies before they have to reach onto their pockets.

I've yet to find an insurer that is "cheap". You generally get what you pay for when exclusions or risks are accounted for.

Thanks.
 
Personally, my biggest reason for having insurance isn't to protect my assets. It is to protect my conscience.

If I screw up and hurt myself or break something of my own, I might be in denial, frustrated, and make excused for a bit. But, pretty quickly, I own it, accept it as my own fault, resolve to do better, and move forward from my current position. Sometimes it hurts when one screws up. And, that's okay.

But, when I screw up and hurt someone else or break something that belongs to someone else, I feel terrible. And, when I and can't make it right, I feel even worse and helpless. Those situations are the ones that I never forget.

If I ever screw up and damaged someone's boat or the environment, or G_d forbid, caused someone injury, I'll feel really terrible. And, if I can't fix it, I'll feel even worse. And that feeling likely will never go away. It'll stick with me ever time I think about it. It is just the way I am wired.

As a prudent financial decision, I carry insurance to protect my own assets, e.g. collision and comprehensive coverage on my car and boat.

But, as a matter of conscience, I carry enough liability coverage to ensure that I can fix those things that I can reasonably anticipate the possibility of breaking, even if it isn't significantly likely.

At least then, if I screw up and do damage or hurt someone, I can tell myself people aren't perfect, but I did everything I could, including carry appropriate liability insurance for the activity in which I was involved. The insurance company will be able to fix, as best as can be fixed, what I broke but can't fix.

I know people are wired differently and have different pressures and constraints and have to make different choices and compromises. I don't suggest everyone should feel this way, just that, given how I am wired, and my situation, I personally do.
 
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Insurance is my business, as most know.

I often hear about the cost of coverage on boats, both hull and liability. When I look at the ratio of what a policy costs vs (a) the value of the vessel (for us, it’s under 1% of the insured hull value) and (b) the potential costs of damaging others, I gladly pay my premium. I get no price breaks, and carry higher that average coverages because the additional costs are minimal.

Lawsuits aren’t cheap.
 
Well, put me down as officially shocked. We just got our Boat U.S. insurance renewal documents, and our insurance, went down $37 for the coming year.

That's not much, but it sure beats the around 10 per cent increases we had the last two years. :thumb:
 
MYTraveler said:
Let's say a guy has a $1M net worth, but is at fault in an incident that subjects him to liability of $3M. If he has $3M coverage, his net worth is not impacted. But if he has only $1M of coverage, he stands to lose everything. I am not sure my understanding is correct, but no one has ever explained to me why not. I have heard lots of theories -- one of my favorite is that as long as your coverage exceeds your net worth you have no exposure, but I don't believe that is the case (at least not in the US). Given the potential liabilities, how does one know how much liability insurance to carry?
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Generally, insurance companies require a claimant to relieve the insured of any additional liability before they finalize a settlement. So to get, say $100,000, they have to let you off the hook for what they think is the balance of the damage.
 
Peasegrn said:
Generally, insurance companies require a claimant to relieve the insured of any additional liability before they finalize a settlement. So to get, say $100,000, they have to let you off the hook for what they think is the balance of the damage.
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With regards to what "additional liability" do you refer? Future claims for unrealized damages relevant to the original claim?
 
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