Cruising Under the Insurance Radar

[denverd0n]

Originally Posted by goboatingnow

would you restrict your cruising ground based on an insurance company.

Yes, I absolutely would. If I signed an agreement with a finance company that said that I would maintain a certain level of insurance, and if the only way that I could honor that agreement was by restricting my cruising grounds, then that is what I would do.

After the boat was paid off, and I no longer had any obligation to the finance company, then my options would open up. I would have to consider myself extremely self-centered and unethical if I allowed my desire to expand my cruising range to over-ride a contractual obligation.

So, were I the OP, the solution would be very simple. Pay off the boat first and only THEN take off on that long-distance cruise. I know that in today's world a lot of people think that their desire for instant gratification should take precedence over any other legal or moral obligations, but I do not agree.

[denverd0n]

Originally Posted by aquarian

The reality is that your insurance company calculates the probability that you will have a claim within a certain time frame and then charges you an amount that will cover your claim...

Nope. Sorry, but it doesn't work that way. The essence of insurance is shared risk. The insurance company does not calculate your premiums based solely on YOUR risk of a claim. They look at the entire pool of customers in your category and calculate premiums for everyone.

The fact is that a lot of people pay insurance premiums for years and never get back what they have paid. The fact is that some people pay insurance premiums and have claims that far, FAR exceed what they will ever pay. The insurance company knows that they are going to lose money on some people, and make money on others. Balancing that out so that they can make money across the entire pool of customers is what their business is all about.

A single individual cannot do that by themselves. Simply putting your premiums into a personal account is not going to cut it if you happen to be one of those people who experience a disaster the cost of which would far exceed any premiums that you would ever pay. That's the risk that you take if you DON'T have insurance. That's the risk that you mitigate if you DO have insurance.

[aquarian]

Originally Posted by CaptForce

I agree! Hull coverage in Florida went way high and many insurers dropped their marine market after the hurricanes of 2004. Full hull coverage would have cost me 8.5% of my 1973 boat's market price each year! By not purchasing hull coverage since 2004 I have saved one half the value of my boat; however, I do keep a hefty liability policy.

EXACTLTY!

[aquarian]

Originally Posted by denverd0n

Nope. Sorry, but it doesn't work that way. The essence of insurance is shared risk. The insurance company does not calculate your premiums based solely on YOUR risk of a claim. They look at the entire pool of customers in your category and calculate premiums for everyone.

The fact is that a lot of people pay insurance premiums for years and never get back what they have paid. The fact is that some people pay insurance premiums and have claims that far, FAR exceed what they will ever pay. The insurance company knows that they are going to lose money on some people, and make money on others. Balancing that out so that they can make money across the entire pool of customers is what their business is all about.

A single individual cannot do that by themselves. Simply putting your premiums into a personal account is not going to cut it if you happen to be one of those people who experience a disaster the cost of which would far exceed any premiums that you would ever pay. That's the risk that you take if you DON'T have insurance. That's the risk that you mitigate if you DO have insurance.

You left that sentence that included the group out of your quote. And insurance companies in the USA do not charge everyone the same premium. Ask my 18 year old daughter whose health insurance would be over $1000 per MONTH and I can buy the same for $150 (I am 44 years old).

[bljones]

Originally Posted by aquarian

And insurance companies in the USA do not charge everyone the same premium. Ask my 18 year old daughter whose health insurance would be over $1000 per MONTH and I can buy the same for $150 (I am 44 years old).

Of course not. You are in different risk categories. What is the risk of a 44 year old getting HIV, an STD, attempting suicide, being prescribed Ritalin, birth control pills, anti-depressants, contracting a yeast infection, suffering from anorexia, worried about pimples? Adolescent girls are a health insurance nightmare. Would you want to insure Lindsay Lohan or the Olsen twins? Do you complain about your daughter getting cheaper car insurance rates than an 18 year old MALE?
Didn't think so.

[David_Old_Jersey]

Spreading risk between people = socialism

Insurance is just paying someone to let you be a socialist.

[kenny chaos]

Originally Posted by John A

I cruised for 9 years, starting in 2000, and found that most long term cruisers didn't carry any boat insurance, nor do they have any medical insurance.

Most of them didn't have celluar phones, and very few of them carried watches. Laptop PC's started showing up around 2005. Most people were still using Internet cafe's and WiFi was considered a new toy. Nobody wasted their time surfing the internet.

I sometimes observe a very large gap in what is discussed on this forum and the expectations of the newer cruisers and what I experienced meeting cruisiers from all over the world as I went back and forth in the Eastern Caribbean.

I try not to make judgements, but boy, there sure is a difference!

You have confirmed some of my suspicions.
Thank-you for aleviating my greatest fears of cruising, the need to be paranoid and to be a high tech consumer/user.

[Vasco]

Originally Posted by kenny chaos

You have confirmed some of my suspicions.
Thank-you for aleviating my greatest fears of cruising, the need to be paranoid and to be a high tech consumer/user.

Cruisers have always had the need to communicate. In the "olden days" by snail mail and mail forwarding. Then as phone rates went down by landline phones and snail mail. Then pocket mail (remember that?) and now email,cell phones and sat-phones. I draw the line at 24/7 instant high-speed internet access but many feel this is necessary. Actually I wouldn't mind the 24/7 internet access but can't bring myself to pay for it.

[NCountry]

In most areas the liability laws are called "financial responsibility" laws. This is pretty descriptive as to what it covers.
If you choose to not cover your own hull then you have every right to that and I totally agree with ya.
If you choose to not carry liability insurance then please be responsible enough to accept your fate and do the right thing if you cause someone else damages.
You'll have to excuse me but I respectfully disagree with the statement that spreading the risk equal socialism. Taking away from people that are willing to work hard so you can give to people that won't work, now that's socialism. Being responsible for the damages you or your property may cause to others, well I call that a moral and ethical responsibility. People that won't be responsible when they or their property cause damages or a financial loss to someone else, well, I call that criminal......

[goboatingnow]

People that won't be responsible when they or their property cause damages or a financial loss to someone else, well, I call that criminal......

only and only so if they are to blame, through negligence, insurance companies often pay out on a veritable whim. In real life proving someone is at fault is often very difficult. I am not a fan of the modern insure everything culture.

You also have to accept that where insurance isnt mandatory, people can so choose not to carry it and they may in fact not have the means to offer financial redress, all you can do is "suck it up". Thats what I accept.

Dave

Dave

[aquarian]

Originally Posted by bljones

Of course not. You are in different risk categories. What is the risk of a 44 year old getting HIV, an STD, attempting suicide, being prescribed Ritalin, birth control pills, anti-depressants, contracting a yeast infection, suffering from anorexia, worried about pimples? Adolescent girls are a health insurance nightmare. Would you want to insure Lindsay Lohan or the Olsen twins? Do you complain about your daughter getting cheaper car insurance rates than an 18 year old MALE?
Didn't think so.

Afraid you barked up the wrong tree. And I really don't think you know what you are talking about. Starting with the average teenage girl's insurance would be less than a 44 year old's. Secondly, I didn't complain - just stated a fact to clarify a statement by another poster that insurance companies charge everyone the same. OMG, that make us in agreement. You will have to pick a fight with someone else.

I don't believe in expecting someone else to be responsible for my mistakes. I also don't expect other people to cover my expense when I choose to take a risk. If I want my boat insured in case you take it out, I'll insure it myself. Do you really think you can count on the whole world of boating people to have insured boats. Many people on boats won't make enough money in a year to pay one insurance premium.

Be less judgemental and more realistic. It makes for a happier world.

[denverd0n]

Originally Posted by aquarian

[I] just stated a fact to clarify a statement by another poster that insurance companies charge everyone the same.

No one ever said anything of the sort. Certainly not me (and I am the one you were responding to). You are arguing against a straw man.

You implied that insurance companies calculate your premium so as to get back everything from you, individually, that they might ever have to pay. That is simply and completely wrong. Again, the insurance business is all about shared risk. Each individual does not get charged the same thing, but each individual within a defined group most certainly does.

For example, I am a married male, over the age of 50, with a good driving record, living in Florida, with a vehicle worth about $12,000. State Farm charges me exactly the same for my collision coverage as they charge every other married male, over the age of 50, with a good driving record, living in Florida, with a vehicle worth about $12,000 for THEIR collision coverage. That spreads the risk for collision coverage across a group that included thousands of people.

You went on to suggest that if you simply put the premiums that you would have paid into a savings account then you can cover yourself for everything that the insurance company would cover you for. Again, completely wrong, since it ignores the plain fact that some people who experience severe disasters get back far more from the insurance company than they have, or ever will, pay in. This is where the shared risk comes into it.

Since you are accusing others of not knowing what they are talking about, it might behoove you to find out what YOU are talking about!

[boatman61]

Originally Posted by Vasco

Cruisers have always had the need to communicate. In the "olden days" by snail mail and mail forwarding. Then as phone rates went down by landline phones and snail mail. Then pocket mail (remember that?)

Shoot... I still remember flag's.....

[bljones]

Originally Posted by aquarian

Afraid you barked up the wrong tree. And I really don't think you know what you are talking about. Starting with the average teenage girl's insurance would be less than a 44 year old's. Secondly, I didn't complain - just stated a fact to clarify a statement by another poster that insurance companies charge everyone the same. OMG, that make us in agreement. You will have to pick a fight with someone else.

I don't believe in expecting someone else to be responsible for my mistakes. I also don't expect other people to cover my expense when I choose to take a risk. If I want my boat insured in case you take it out, I'll insure it myself. Do you really think you can count on the whole world of boating people to have insured boats. Many people on boats won't make enough money in a year to pay one insurance premium.

Be less judgemental and more realistic. It makes for a happier world.

I wasn't looking to pick a fight, I was explaining, based on my past experience in the insurance industry WHY there might be the discrepancy you mentioned.
A happier world is made when people don't create confrontation out of information.

[Shrew]

Let me clarify. If you can afford to be self-insured then I have no issues. By 'self-insured' I mean that you can be financially responsible to any lenders for your debt and you can be financially responsible for damage you cause to other's property. Whether you feel insurance is worth it is a bit of a personal opinion. Whether you can replace your own property out of pocket is irrelavent. If you have a lien on your property that is between your lien holder and you.

The concern here is whether you can afford to be financially responsible for damage caused to other people's property. If the answer is 'NO" then you can't afford NOT to have liability insurance. If you can't afford liability insurance, then you more than likely will have a difficult time being financially responsible for potential damage you cause.

If you cannot afford to be financially responsible, whether it be out of pocket or through an insurance policy, then you can't afford to cruise. Assuming that I am insured and my insurance will cover your liability is simply irresponsible and unethical.