Liability Insurance

[anotherT34C]

Originally Posted by hellosailor

I can't speak of half mil spills, but do have first hand knowledge of an aquaintance who was lost at sea on his second day of a solo world tour. Boat sunk in about 40-50 feet of water off the NJ coast, and his widow as rather promptly notified by the NJSP and USCG that if she didn't have the wreck removed "immediately" they would remove it for her--and send her the bill.

No mention of fuel issues, it is possible that his tanks were holding, or that the ocean and storm had dispersed whatever leaked.

Sounds kind of dickish of the USCG, IMO. But this was a threat, right? Did they actually send her a bill? Was she found liable for damages in court, and more importantly, was payment enforced?

Sorry... I'm not a lawyer (nor do I play one on the internet), but I married one, and I was raised in a family of them.

Again, I may well be wrong, but I refuse to be scared by the damned insurance companies.

[Christian Van H]

Originally Posted by hellosailor

I can't speak of half mil spills, but do have first hand knowledge of an aquaintance who was lost at sea on his second day of a solo world tour. Boat sunk in about 40-50 feet of water off the NJ coast, and his widow as rather promptly notified by the NJSP and USCG that if she didn't have the wreck removed "immediately" they would remove it for her--and send her the bill.

No mention of fuel issues, it is possible that his tanks were holding, or that the ocean and storm had dispersed whatever leaked.

Hello, what happened here? He's probably no more than 4 miles off, and it's his second day out? I'm dieing to hear this tale...Thanks, Chris

[hellosailor]

No, it was niether dickish nor a threat. The sunken vessel posed a threat to navigation, and the USCG and NJSP both had the obligation to have that threat cleared in the fastest practical manner. Whatever the legal norms are for this, the widow was told "Our condolences but...and if you don't clear it by...we clear it and bill his estate (you) for doing so."

That's normal and proper, the alternative is to leave the marked wreck in place and then have someone else puncture their hull and sink on it. You think that's better?

Chris, he actually set sail from LIS,spent the first 24-48 hours in bad wx, and then accounts on the second or thrid day (I forget which, it has been over 5 years) reported him to the USCG in distress, running south along the coast in heavy wave action with a torn sail, probabaly the mizzen as it was ketch rigged.

NJ is mainly a lee shore when the wind is from the east, as it was, and builds a nasty chop where the water shoals, which it does way further out than people expect. A coupe of USCG boats tried to run the inlets to get out to him, but physically could not. The next day someone reported seeing the top of one mast and a team was sent out. Some of his possessions (a knapsack, etc.) were found further south of Egg Harbor Inlet (IIRC) but no body was ever recovered.

The last assumption was a rigging failure, possibly compounding a steering failure, and a man fouled and then overboard, either with or without PFD in water too rough. I never got the final report--those things take time, and I did not want to bother the widow about it.

On the side of objectivity it IS also possible that the disappearance was an intentional one, not a death at sea. As I said, he was an acquaintance and in this world, these things have been known to happen. But the authorities seemed to have no question about that, and even within sight of the shore for many hours--rescue was simply not possible.

We all told him to spend a few weeks in and out of LIS and get some heavy wx experience with the boat (which he'd spent years refitting and modifying for blue water) but, he said it was time to go.

What can you say but "there but for the grace of god go I" and "god rest his soul".

If he didn't have salvage insurance, it definitely was taken from his estate. Whether they send a bill or simply freeze an asset, I don't know. Doesn't really matter to me.

[Christian Van H]

Originally Posted by hellosailor

What can you say but "there but for the grace of god go I" and "god rest his soul".

There but for the grace of God and an easily received weather report go I...is more like it. If it went down like that it would have been truly terrifying. No one should have to experience that. RIP.

[anotherT34C]

Originally Posted by hellosailor

That's normal and proper, the alternative is to leave the marked wreck in place and then have someone else puncture their hull and sink on it. You think that's better?

I would want whoever clears the mess to send a bill, and sue for damages. Then, I would want a judge to assess the case, and make a judgement. If they can well afford the cleanup, and/or they were found negligent, then ok. If it puts the widow in a bad way (and they weren't negligent), then no, I the taxpayer am willing to foot the bill. I think that's better. I also think that is pretty much what happens.

[osirissail]

- - Excuse me! What is offered on this and other forums are personal experiences and knowledge attained through real life experiences which should be taken strictly as "food for thought" to be filed away so that should you experience a similar circumstance you can recall what others have experienced. Whether you believe or disbelieve is personal to you only. Whether you wish to search for additional information is also a personal decision.
- - Many different cruisers have entered a particular port of call and had widely varying experiences, sometimes totally opposite of another's experiences there. All of them are valid and useful to the prudent cruiser as background information on what can be possibly expected. The only two certain things on this planet are death and taxes, everything else if a variable.

[Christian Van H]

I don't see that this oil spill stuff has much to do with the original posters intent. It doesn't really have much to do with this type of insurance, for that matter. ANYONE can drift down on a gold plater while visiting the fuel dock, and you DONT want to see that bill, so spend the $50 - $100 or so and get covered. Faking insurance papers is just BS, as this insurance is there to protect YOU. Why would you want to fake it? It should give you a warm, fuzzy feeling every time you remember you have it...

[fishwife]

Originally Posted by osirissail

Fishwife: The is serious important information about Gibraltar. Any idea if short term policies are available locally in Gibraltar as most cruisers never carry that level of insurance? I know you can get the required insurance for Italy - in Italy.

I'm sorry I can't help on that but I imagine a quick email to either of the two marinas there will answer the question. For those who don't know, Shepherds Marina has closed and is now part of 'Ocean Village'

The Queensway Quay Marina is significantly cheaper per day and somewhat quieter, being further from the airport. Take the East entrance to the harbour between the outer breakwater and the East Pier arm and then steer around 80 degrees and you'll soon identify Queensway Quay.

[anotherT34C]

Originally Posted by osirissail

- - Excuse me! What is offered on this and other forums are personal experiences and knowledge attained through real life experiences which should be taken strictly as "food for thought" to be filed away so that should you experience a similar circumstance you can recall what others have experienced. Whether you believe or disbelieve is personal to you only. Whether you wish to search for additional information is also a personal decision.

...and if some average guy here had been forced by the courts to foot a six figure bill, then that would be the case. I'm just commenting on how instead, I'm reading case after case of people being scared of hypotheticals. And please understand that my tone is not meant to be acrimonious, just inquisitive.

Christian, If (hypothetically) a gust of wind blows my bicycle over and it scratches the ferrari that parked next to it, am I automatically personally liable for a $15K paint job?

If liability insurance is "only" x amount, doesn't that tell you something about the actual likelyhood of being found liable? Insurance companies are of course, a business, and so almost by definition insurance is a statistical bad deal. The ONLY time it makes sense, is when a catastrophic, ruinous settlement or loss is probable. House destroyed by natural disaster is one. Medical illness is another. I'm unconvinced that liability is one, until I see actual data that uninsured people have a statistically significant probability to face a ruinous lawsuit.

Statistically significant, would be on the order of one in a thousand, rather than say one in a million (I'll risk it).

[S/V Illusion]

There are numerous examples if one wanted to look at how the EPA or USCG or any number of state agencies have collected six figure claims from non-negligent owners of boats and property from which an oil spill occurred.
The most often cited example is a waterfront homeowner who was away for the summer but before leaving had is heating oil storage tank removed. Not knowing this, his heating oil supplier during a regularly scheduled delivery, pumped 275 gal of heating oil into the guy's basement whereupon his sump pump did it;s thing and pumped almost all the oil into the bay.

As he owned the source of the oil spill, he was found liable for cleanup cost of over $90,000 plus damages which far exceeded the cleanup cost plus he incurred a fine by both the state and USCG.

There are many similar examples of boat owners having experienced similar liability regardless of negligence.

Argue all you want about the likelihood or frequency with which these scenarios play out - it happens very often.

For what insurance costs compared to the peace of mind and protection it affords, not having it is a false economy

[donradcliffe]

Christian--how much would you be willing to pay for liability coverage?? Its pretty clear you would pay $50 a year, but would pay $500 per year for the same coverage? How about $1000?? At some price coverage doesn't make sense. Your price level depends on how deep your pockets are, but everyone has a price. If you have a $10,000 boat and IMIS wants $700 a year plus a $600 survey for liability only coverage in the Caribbean, would you still want to pay for that warm and fuzzy feeling?

On the liability side, there is a widely prevalent maritime law which limits the liability of shipowners to to the value of the ship and cargo after the accident, so don't assume the insurers ever plan to pay out millions on your behalf.

[nautical62]

Originally Posted by donradcliffe

Christian--how much would you be willing to pay for liability coverage?? Its pretty clear you would pay $50 a year, but would pay $500 per year for the same coverage? How about $1000?? At some price coverage doesn't make sense. Your price level depends on how deep your pockets are, but everyone has a price. If you have a $10,000 boat and IMIS wants $700 a year plus a $600 survey for liability only coverage in the Caribbean, would you still want to pay for that warm and fuzzy feeling?
.

I agree the decision to obtain insurance is based on comparative potential costs. However, it's not about a warm a fuzzy feeling. It's about reducing or eliminating the risk of a large loss. In return one accepts a known, smaller loss in the form of premiums. A big part of this decisions is one's aversion to risk. This will be influenced by many factors including the known premiums, your personal philosophy, How deep your pockets are and what your perception of the risks are. The more you know of the true risks, the more informed your decision will be. An ability to control the risks might reduce the odds of a large loss considerably.

Insurance in just one variable in any risk management plan.

It's not always just about your aversion to risk. Insurance may also be required to gain access to a country, to get a boat loan, or even obtain a slip in some circumstances.

[S/V Illusion]

Originally Posted by donradcliffe

On the liability side, there is a widely prevalent maritime law which limits the liability of shipowners to to the value of the ship and cargo after the accident, so don't assume the insurers ever plan to pay out millions on your behalf.

Keep in mind the limit to liability provision to which you refer applies only to some commercial vessels over a specific tonnage - as it applies to typical recreational vessels, this limitation is irrelevant.

[osirissail]

Frankly put, if you are using your boat inside US waters you "have to have" at least liability insurance - unless - you never haul your boat at a boatyard, dock it at a marina, and even some city mooring fields require insurance. Like auto insurance, boat (liability at least) it is rapidly getting to be virtually mandatory by default.
- - Now, how much to get and what it covers, like oil/fuel spill, etc. are totally valid discussions which includes degrees of risk, personal exposure, and even regional location of the boat. The sailing magazines periodically run articles about "what should be in" the policy. This is akin to the auto insurance situation where the mandatory policy is (or was last time I was in Florida) $10K/15K coverage. That will get you your license plates. Any coverage above that (car or boat) is a personal decision based on your own feelings and risk assessment. Of course, any bank loan is going to reset the "minimum required" insurance to the bank's risk.
- - Outside the USA waters, except for bank loan requirements, the "minimum mandatory coverage" is zero (again we know about Italy and a few other places). Everything is up to your discretion and risk assessment. One good argument for comprehensive coverage outside USA waters is the "uninsured boater" consequences. If some local fishing boat or other vessel causing damage to your vessel has no insurance - and you can bet your anchor, none of them do - you are out of luck unless your insurance will cover your boat's damage.
- - Final "ringer" in the insurance game - if you cancel or let your policy lapse for "X" years (I was quoted 3 years) and you run without any form of insurance - you will get turned down for coverage when again you need it. No logic to this, just the "policy of the insurance company". It is tough to then try to "re-start" insurance coverage. I know I had that problem.

[hellosailor]

osiris-
"if you cancel or let your policy lapse for "X" years...will get turned down for coverage when again you need it. No logic to this, just "

I suspect the logic is quite simple, even if you argue it is or is not valid. IF you are the kind of person who sails without insurance, and all of a sudden you want it, what has changed? IF you are the kind of person who indulges in ANY form of risky behavior, i.e. sailing without insurance and assuming your own risk of the damages, then no insurer wants your business--at all for anything, unless they are charging you extra for being a higher risk.

That logic (or at least, that justification) is used by insurers of all kinds in all fields. Missed a credit card payment? Don't be surprised if your insurance rate goes up, many insurers will say you are a higher risk. Some even base your rates partly on your FICO score!

Insurers sometimes view the world through special glasses. (Special, as in "special education" and other euphemisms, perhaps?) And they're often very reluctant to discuss how they make rating choices, since the company that does the best job of making ratings versus prices versus payouts, is the one that makes the most money in a very profit-oriented field.

In the US there was some commotion in the first year after AIG (yes, that AIG) started to offer consumer automobile insurnace. After six months their rates suddenly went from below market, to slightly above the competition they'd taken business from. IIRC they claimed they had simply made some bad rating decisions, but the alternate theory was that they had intentionally set rates at a loss to get the initial business. I don't recall what ever became of that, just that there were investigations at the time.