Insurance companies prejudice towards liveaboards

[psneeld]

My beef is that I can lie and get a cheaper rate for the same thing. I don't like to lie. I have a liveaboard policy. I was wanting to shop around to compare prices. I was told to get a survey. I got a survey. I was told to pound sand without a look. This rubs me the wrong way. Maybe you like to be told to pound sand without a reason. I don't.

Oh... I have been on several policies through my years. And had supervisors calling back to apologize saying there was nothing they could do.

Are you complaining liveaboard policies are more expensive?

Each and every one of my liveaboard policies and fulltimer policies for RVs were higher but they were also giving more reimbursement for some categories and more coverages like liability away from the boat.

If you were getting exactly the same policy (which I severely doubt) as there is usually in LARGE letters....LIVEABOARD POLICY on the declarations page of liveaboard policies then I could see a problem. But in many years and at least 4-5 policies covering liveaboard and not.... I never saw my liveaboard policies as a ripoff, just coverage I wanted and was willing to pay for the slight difference.

 

[Mac2]

Oh... I have been on several policies through my years. And had supervisors calling back to apologize saying there was nothing they could do.

Are you complaining liveaboard policies are more expensive?

Each and every one of my liveaboard policies and fulltimer policies for RVs were higher but they were also giving more reimbursement for some categories and more coverages like liability away from the boat.

If you were getting exactly the same policy (which I severely doubt) as there is usually in LARGE letters....LIVEABOARD POLICY on the declarations page of liveaboard policies then I could see a problem. But in many years and at least 4-5 policies covering liveaboard and not.... I never saw my liveaboard policies as a ripoff, just coverage I wanted and was willing to pay for the slight difference.

My complaint is in the title-"prejudice". I say I'm not a liveaboard and I get insurance. I say I'm liveaboard and they won't insure me. Same boat, same exact coverage. The "why" is what I have been asking. The "shut up and take it" attitude doesn't cut it for me. It's clear there is no answer to my question, which was only generated out of curiosity.

 

[psneeld]

My complaint is in the title-"prejudice". I say I'm not a liveaboard and I get insurance. I say I'm liveaboard and they won't insure me. Same boat, same exact coverage. The "why" is what I have been asking. The "shut up and take it" attitude doesn't cut it for me. It's clear there is no answer to my question, which was only generated out of curiosity.

Well unless you know something I don't, it would NOT be the exact same coverage.

They are 2 separate policies and if the situation dictates they give you one or the other. Some insurance companies don't offer liveaboard policies so if you want one or are determined to be a liveaboard...look elsewhere.

They are out there but I admit it is one reason I decided to get out of big boating and enjoy small boat fishing. My alternative was dropping hull and just getting liability/environmental/salvage insurance.

Boating is getting tougher all around and is definitely a wealthier man's sport or just hard to get what you want or stay where you want. Life is just like that to a certain point in the RV world too.

Too many well off retirees it seems.

 

[Mac2]

I'm not riled up. Why would you say that? Are you prejudice against me too?

 

[Jeff F]

You fit the algorithm, or you don't get insurance with them. It's that simple and it's the same story I have heard hundreds of time for decades.

Agreed.

My complaint is in the title-"prejudice". I say I'm not a liveaboard and I get insurance. I say I'm liveaboard and they won't insure me. Same boat, same exact coverage. The "why" is what I have been asking. The "shut up and take it" attitude doesn't cut it for me. It's clear there is no answer to my question, which was only generated out of curiosity.

The two cases have different risk profiles, from a scoring point of view. In one you presumably have a fixed address. In the other you don't.

Have you considered the impact on your access to credit as a declared liveaboard?

There is no shortage of prejudice against liveaboards, in my experience. Even though I think of myself as a liveaboard I'm very hesitant to use the term.

 

[psneeld]

I'm not riled up. Why would you say that? Are you prejudice against me too?

Well you are going on about something that's been around for awhile and seems perfectly normal to me. Not prejudiced, just always curious if someone has knowledge of something I haven't heard about.

 

[Delta Riverat]

Agreed.

The two cases have different risk profiles, from a scoring point of view. In one you presumably have a fixed address. In the other you don't.

Have you considered the impact on your access to credit as a declared liveaboard?

There is no shortage of prejudice against liveaboards, in my experience. Even though I think of myself as a liveaboard I'm very hesitant to use the term.

Yeah, there is no doubt. Sorta like those people that live in trailers...

When I was still in high school, went to a buddies friends house that just happened to be in a trailer park. Place was really nice, a double wide and bigger than my parents first house. When I found out what they cost I went home all excited and told the folks about "this great trailer park" I found.

They were quick to advise that I should reconsider. I don't even know if they ever visited a trailer park. But I do remember that discussion and it was 50 years ago.

 

[Hippocampus]

Read the fine print. If you’re caught lying and have a claim you’re like sool.

 

[Delta Riverat]

Yeah, that too.

If anything you declared on your app or update is found to be untrue...you are denied.

Sure you can sue but they have a whole panel of lawyers on staff just ready...

Yeah, don't lie.

 

[PierreR]

Just got my policy renewal. It went up 9% over last year. My rate is very low. The insurance company is aware of the fact that I put 5,000 miles on my boat in the two years I have owned it. Rates were based on driving record, what kind of cars we drive, claims history, credit rating, current debt, home ownership, lawsuits, boat type, cruising grounds and where I keep the boat.
When we start the loop we, know it will go up 50%. The cruising grounds will be far larger and no layup period.

 

[BruceK]

If you lie in the proposal it`s non disclosure or worse, and your cover is at risk. I can`t imagine insurers universally have a pathological dislike of liveaboards, it`s more likely due to higher incidence of claims.
We`re not liveaboards but I like having liveaboards nearby, mainly for enhanced security.

 

[Benthic2]

People seem to have some resentment against insurance companies because they use data and want to make a profit. Guess what ? That's what every company does. McDonald's figures out how much it will cost them to make a McRib and what they can sell it for, and they do it in the pursuit of profits. Its the same with the corner lemonade stand, General Motors and your doctor's office. Unless someone is just against profits as a motive, why is it inherently more evil for an insurance company to chase profits than any other company ? There's no mystery, black magic or conspiracy involved. They take a group of people, add up the total cost and divide by the number of people. Then they start splitting the group into sub groups and identifying higher and lower cost groups. More advanced companies account for more variables. The more subgroups you can create, the more accurate your estimates will be. If you have one group: Car Drivers.....then everyone is assumed to behave like the group average. When you start to divide them up by gender, education, credit score, age etc your groups become more homogenous, and the members of each group are much closer to the group averages. Then its just like any other business. Estimate costs, add a profit margin and determine price. The thing that does make insurance different from most other industries is that it is incredibly tightly regulated. Any rate an insurance company charges has been approved by a state regulator based on loss estimate data. An insurance company can't just decide to charge red heads more because it doesn't like them. It has to have data to support any surcharge or discount. If it can't support its rate changes the state Insurance Commissioner will not approve the rates.

 

[Benthic2]

We were mostly in the less developed portion of the Caribbean most of the time with higher crime rates than the USA and much less governmental services (SAR, fire, law enforcement). We paid less for insurance than a friend with a sistership who snowbirded from Florida to Maine with the seasons..

The legal environment is a factor as well. There are a lot of people between Florida and Maine who would like to sue a boat owner. I would venture to guess that kind of claim is less common for a boat cruising the Caribbean. Another factor is how many policies an insurance company has in one area. A marina fire in Miami might impact 50 - 100 policy holders, whereas in a more remote location the probability of a loss impacting multiple policy holders is smaller. Then there is the idiot factor. Idiots are expensive to insure. The group of boaters who stay in domestic waters might have 5% of the people dumb enough to cause an insurance claim. The group of boaters who travel 1000+ miles might only have 1% who's incompetance could create an insurable event. The way demographics can effect rates is not always intuitive, but you can be sure an insurance commissioner saw the data and approved it, so there is some legitimacy to whatever an insurance company is charging.

 

[BuoyCall]

People seem to have some resentment against insurance companies because they use data and want to make a profit. Guess what ? That's what every company does. McDonald's figures out how much it will cost them to make a McRib and what they can sell it for, and they do it in the pursuit of profits. Its the same with the corner lemonade stand, General Motors and your doctor's office. Unless someone is just against profits as a motive, why is it inherently more evil for an insurance company to chase profits than any other company ? There's no mystery, black magic or conspiracy involved. They take a group of people, add up the total cost and divide by the number of people. Then they start splitting the group into sub groups and identifying higher and lower cost groups. More advanced companies account for more variables. The more subgroups you can create, the more accurate your estimates will be. If you have one group: Car Drivers.....then everyone is assumed to behave like the group average. When you start to divide them up by gender, education, credit score, age etc your groups become more homogenous, and the members of each group are much closer to the group averages. Then its just like any other business. Estimate costs, add a profit margin and determine price. The thing that does make insurance different from most other industries is that it is incredibly tightly regulated. Any rate an insurance company charges has been approved by a state regulator based on loss estimate data. An insurance company can't just decide to charge red heads more because it doesn't like them. It has to have data to support any surcharge or discount. If it can't support its rate changes the state Insurance Commissioner will not approve the rates.

Wow, the best way to explain how it works...well done. Now take that information and put into a mathematical equation and you get your risk factors and out comes your individual rates. Thank You!

 

[BuoyCall]

The legal environment is a factor as well. There are a lot of people between Florida and Maine who would like to sue a boat owner. I would venture to guess that kind of claim is less common for a boat cruising the Caribbean. Another factor is how many policies an insurance company has in one area. A marina fire in Miami might impact 50 - 100 policy holders, whereas in a more remote location the probability of a loss impacting multiple policy holders is smaller. Then there is the idiot factor. Idiots are expensive to insure. The group of boaters who stay in domestic waters might have 5% of the people dumb enough to cause an insurance claim. The group of boaters who travel 1000+ miles might only have 1% who's incompetance could create an insurable event. The way demographics can effect rates is not always intuitive, but you can be sure an insurance commissioner saw the data and approved it, so there is some legitimacy to whatever an insurance company is charging.

OMG, I love the idiot factor...spot on.

 

[psneeld]

Not sure the traveling thing is accurate.... In my experience....the sheer numbers of boaters that travel past 10-50 miles from their home port dwindles rapidly. That's why I would think navigation areas vs experience in those probable cruising areas are so important to the insurers.

Just a handful of "inexperienced" cruisers that venture forth on long cruises are I think a higher percentage of riskier insured over home porters or dock rats. Plus.... it seems like the cruiser's boats are often more expensive and there may even be a higher percentage of total losses per incident versus just the dock rash the locals rack up in their limited boating exploits.

 

[BuoyCall]

Location, Location, Location

 

[cafesport]

Have you tried getting a quote for say...Bellingham?

 

[Mac2]

I understand the bean counter approach to claims. My point was that there is no statistic a insurance company can look at for “saves”when differentiating between a livaboard or not. I’ve never made a claim in 20 years yet I couldn’t count the multitude’s of boat sinkings, thefts, electrical fires, etc Ive prevented over the years. It used to be that a lot of livaboards were the equivalent of a homeless camp, but most of that has changed. Maybe one day the bean counters will take into account decades of no livaboard claims

 

[psneeld]

I understand the bean counter approach to claims. My point was that there is no statistic a insurance company can look at for “saves”when differentiating between a livaboard or not. I’ve never made a claim in 20 years yet I couldn’t count the multitude’s of boat sinkings, thefts, electrical fires, etc Ive prevented over the years. It used to be that a lot of livaboards were the equivalent of a homeless camp, but most of that has changed. Maybe one day the bean counters will take into account decades of no livaboard claims

I am pretty sure they do take into account the number of claims through the years (some drop deductibles every year of no claims so I bet it IS a big factor) and there probably ARE statistics that lean one way or the other when you buy a liveaboard policy. Cruising for 12 months on a regular policy is NOT the same thing as having a liveaboard policy.... the liveaboard policy usually IS more expensive because you usually get liability away from the boat and more personal effects coverage as well as others may be included...but not for free. They may not even care if you liveaboard and don't buy that class policy... because you are a lower risk, not because you live aboard but you are lumped into the group that gets rated on different levels of coverage.

 

[Jeff F]

It used to be that a lot of livaboards were the equivalent of a homeless camp, but most of that has changed.

Maybe in your neighborhood. It's hard to speak broadly about the subject, I think.

Here in the Toronto area there are a few hundred year-round liveaboards and a few marinas - public and private - that provide winter berthing. My insurance company provides a liveaboard rider at minimal cost that provides more content insurance and assumes full time occupancy. So I haven't had the problem you describe.

Maybe a quick route to success would be polling your local liveaboard community.

The concerns I expressed earlier were more broadly about various scoring algorithms that might derate you as a customer based on that one factor. If some algorithm or AI agent has decided based on some fuzzy process that liveaboard = homeless you could encounter prejudice in all sorts of subtle ways. It's got nothing to do with the boat or operating risk.

 

[Mac2]

Maybe in your neighborhood. It's hard to speak broadly about the subject, I think.

True. You’re lucky you can have that many livaboards. The department of natural resources limits the livaboards in my area to 10% of the marinas slips. A lot of marinas now require the boat to be able to move, which helped remove most of the floating homeless camps.

 

[Jeff F]

You’re lucky you can have that many livaboards. The department of natural resources limits the livaboards in my area to 10% of the marinas slips. A lot of marinas now require the boat to be able to move, which helped remove most of the floating homeless camps.

Well, that's in the heart of a 6.5 million local population with an acute housing shortage... As a portion of the summer boat population it's pretty small.

But it takes insurance, preparation and a fair amount of money to make it through the winter. The marinas are pretty selective on who they admit for winter liveaboard.

ETA: not to mention a tolerance for occupying small dark cold spaces for months on end

 

[Shrew]

The issue with the insurance underwriters is that there are far more 'liveaboards' which are really one tick above 'living in a van down by the river'. These are typically very old boats which are basically not maintained at all. I can point to MANY examples where boats cannot even move under their own power.

We had one two years ago that sank at the dock despite advising on multiple occasions that her bilge pumps were going off frequently. Same boat kept tripping power stanchion breakers. (The stanchion was fine and never tripped for boats both prior to and following her in the same slip).

These are the boats that sink, spill fuel, discharge holding tanks, and catch fire. After a while it is more cost effective to simply exclude that entire demographic.

For 18 years my mailing address and my boat address have been different states. I have never been pressed on it or accused of being a liveaboard. Nobody counts my nights aboard.

 

[MYTraveler]

For 18 years my mailing address and my boat address have been different states. I have never been pressed on it or accused of being a liveaboard. Nobody counts my nights aboard.

Until you make a claim, the insurer has not reason to care. But when you make a claim, they will investigate the accuracy of your declarations, beginning by asking you to certify their accuracy. A material inaccuracy will result in denial of coverage. If you are tempted to double down and falsify certify that accuracy, the downside increases substantially, from mere denial to felonious insurance fraud -- the slam dunk case with a non-sympathetic defendant that prosecutors love to prosecute. They will offer you a plea deal and you will be hard pressed to fight. Personally, I err on the side of over disclosure.

 

[SteveK]

If any boat is insured does it not require a survey? Are derelict boats surveyed differently? If a liveaboard goes to the trouble of survey and pays for insurance why would they be treated different by insurer.
I used to live aboard in a marina where the marina owners lived aboard. My marina asked me for proof of insurance every year, never asked if I maintained the boat.
Boats can sink at the dock whether it is liveaboard or dock queen.
It may be the stigma created by word of mouth that a liveaboard had a problem. Supported by liveaboards who clutter the topside and look abandoned. It seems to be allright for a boat to sit unused for months at a time, unwashed, if it sinks, oh that is bad luck.

 

[CharlieO.]

If any boat is insured does it not require a survey? Are derelict boats surveyed differently? If a liveaboard goes to the trouble of survey and pays for insurance why would they be treated different by insurer.
I used to live aboard in a marina where the marina owners lived aboard. My marina asked me for proof of insurance every year, never asked if I maintained the boat.
Boats can sink at the dock whether it is liveaboard or dock queen.
It may be the stigma created by word of mouth that a liveaboard had a problem. Supported by liveaboards who clutter the topside and look abandoned. It seems to be allright for a boat to sit unused for months at a time, unwashed, if it sinks, oh that is bad luck.

Not all insured boats are required to survey. We have an agreed upon value policy on our boat. No survey required.

 

[SteveK]

Not all insured boats are required to survey. We have an agreed upon value policy on our boat. No survey required.

so do I and have to survey every five years.

It occurs to me that boat insurance is done different between Canada and the US

 

[CharlieO.]

so do I and have to survey every five years.

It occurs to me that boat insurance is done different between Canada and the US

Just stating my experience, your agreed value I’m sure is much more than mine.

 

[Mac2]

If any boat is insured does it not require a survey? Are derelict boats surveyed differently? If a liveaboard goes to the trouble of survey and pays for insurance why would they be treated different by insurer.
I used to live aboard in a marina where the marina owners lived aboard. My marina asked me for proof of insurance every year, never asked if I maintained the boat.
Boats can sink at the dock whether it is liveaboard or dock queen.
It may be the stigma created by word of mouth that a liveaboard had a problem. Supported by liveaboards who clutter the topside and look abandoned. It seems to be allright for a boat to sit unused for months at a time, unwashed, if it sinks, oh that is bad luck.

Our marina manager added the requirement of being able to move on your own power, which eliminated the liveaboards that were derelict. Doubling the slip fees seemed to help too.