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Old 16-01-2008, 00:12   #1
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My insurance dilemma

My Insurance dilemma
I’m in the process of insuring my newly acquired boat. She is a 1985, (which closed the door on some insurance companies), 40 footer (closed more doors), and in Florida (more doors and jacked up price). I’m sure that sounds familiar to some of you. I am getting liability insurance without question but I am thinking of self insuring for the rest.

Just looking for some of your opinions, and thoughts....

Some of the details;
-Boat is worth 45,000
- The extra premium for full coverage is 1280 (on top of Liability only)
- Deductible 3115 (6230 for named wind storm)
- Live in Saint Petersburg where statistically we are less likely to be hit by a hurricane (maybe?)

Ok that all soundes fine, now I start reading the fine print. They’ve got a fancy depreciation schedule for many parts on the boat. Well, my boat is over 20 years old and if I understand this depreciation thing correctly, this means most of the parts on my boat are almost worthless. Does this sound about right? So if my boat survives the storm without being a total loss, but has damage, most of it will be out of my pocket for fixing it.

Moving on down to the “Hurricane Plan” where they want a very detailed description of what I will do to prepare the boat in the event of a hurricane. Fair enough, they want to make sure that I am thinking of this and that I will do the best that I can to protect the boat. And yes, I will make every effort to protect the boat. But, what if I vary the method used to secure the boat, or there may even be a possibility that may not be able to accomplish all of what was planned or any at all (unlikely but possible). It almost feels like the Hurricane Plan will be a tool for insurance company to use against me to try and avoid paying some of the claim.

When I speak of the insurance company I am talking about the actual insurance company and not the Broker. The broker I am using is with IMIS which has been exceptional!!

Well, there was my rant. Maybe I’m looking at this the wrong way.

I’m sitting on the fence with this one, but leaning more towards self insuring.

Your thoughts............
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Old 16-01-2008, 00:49   #2
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I can't really help. But I do have a question. Do they expect to adhere to your storm plan, or are you OK if you vary it if you think neccesary.
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Old 16-01-2008, 02:37   #3
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Quote:
Originally Posted by Bus Driver View Post
, but leaning more towards self insuring.

Your thoughts............
I'm buying soon and it will absolutley definitly be self insured.

And if it sinks then I hope I'm not on board at the time
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Old 16-01-2008, 04:07   #4
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Quote:
Maybe I’m looking at this the wrong way.
No, just reading the fine print. That would be a good thing just not great news. Obviously, the hurricane plan presumes you are always in one location. If you plan on doing that for a period of time then perhaps it's fine. I think what you would need to do is pre plan where you expect to be and what you will do any time you change that location in the season. If you were self insured you would do that wouldn't you? I can't see why writing up a new plan once in a while isn't a good idea. For example, you plan to go to this location and haul and store the boat on land secured using this method. The people that will haul you have an arrangement set up for when that happens and you have agreed on a lead time required to make sure you are hauled out and tied down. I'm sure many variations of a plan could be produced but the idea is that within a window of opportunity you will complete the specific list of steps. Without a plan you won't get the list done in time.

I think if you self insure you need to do it just like you would if you were insured with a company. Having or not having insurance does not reduce the probability of a hurricane just your personal financial risk. Self insurance is still the same exact game - reduce risk. With the complex depreciation they may be telling you in a polite way you can't collect even if you pay. Do the math yourself and see - really. Many people self insure and there are groups of boats that pool money too creating small self insurance companies. That has it's own risks too.

More than anything else it appears your worst problem is being stuck in Florida. Too many premiums were paid over too short a period of time. Fewer people want to buy your risk and the price is now higher. Your boat is worth what it is but the price of insurance has gone up until the people paying for risk feel better again. It really is only about the money they make. No one is out to be nice about this.

You need to run the "sleep at night" test on all the options until you sleep well. When you find one that works you have it.
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Old 16-01-2008, 10:29   #5
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Insurance is, after all, very much like gambling. If five years worth of coverage will cost you $6000 and a named storm hits and you pay another $6000 in deductible...that's twelve grand over five years, and you can debate what part of Florida and whether you'll have a named storm sooner or later.

Question being, do you think you'd take more than twelve grand in damage from that named storm? Or other risks?

IMIS has a reputation for good service, good coverage, and stiff but competitive pricing--for that standard of good service and coverage. There's no reason why you can't ask the broker, and the insurer, some of the questions about "doesn't this depreciation basically zero out a lot of my boat?"

If you go with just liability, does that cover the costs of "wreck removal" and EPA issues if you are damaged or sunk? Those can be big surprises, which I wouldn't self-insure against.
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Old 16-01-2008, 12:29   #6
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I would ask referrals from other sailors that had to file claims. IMO, a reputable company will cover fair claims and a bad one will use all of the fine print to avoid paying anything. I doubt even a laywer could decipher the legalize of a well crafted insurance policy.
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Old 16-01-2008, 12:44   #7
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Have you tried Jim Mueller at IMIS? We're in a similar situation, it aint gonna be cheap but we don't have any of the "hurricane plan" crap. I would suggest getting as many quotes as you can, you never know where the best rate will come from. If we were on a dock we would have been able to get state farm for 1/3 of the cost of most other quotes.
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Old 16-01-2008, 12:57   #8
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State Farm will cover docks but not moorings? I wonder how many other insurers divide that line...isn't it always something.
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Old 16-01-2008, 13:02   #9
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Yea there's was something like 2 miles from the ocean and on a dock. Something to that effect. we were already to go with them and then they are like "oh yer on a mooring, nevermind we can't cover you". $3400 later.........
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Old 17-01-2008, 10:19   #10
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Wow! I’ve been gone for a bit over a day and look at all the great posts I get to read!

Allan Wheeler:
Quote:” Do they expect to adhere to your storm plan, or are you OK if you vary it if you think necessary.”

That is what I have been trying to figure out and the answers that I have been getting are fairly vague. I’m really not sure they have an answer until something really happens to be honest with you. But I will be talking to them again about this. Here is a quote that I heard from a broker I was talking to earlier on in my quest for insurance.

Quote “ well we haven’t had a claim yet since everyone have been using these Hurricane Plan forms, but when we do, I bet there will be many lawsuits out there’’

Hmmm, reassuring

Pblais:

Thanks for your insight. I’ve been doing the “how do I sleep at night” test for a while now and sleeping well with self insurance. But like everything else I do, I analyze things very carefully.

Hellosailor

Yes the Liability only would be with Boat US and they do include salvage and all the good stuff, I made sure of that.

Latitude 9.5

I am dealing with IMIS and they are very good. It’s the underwriting company that has all these requirements (TLDallas). You said that you didn’t require a hurricane plan, do you know which company it was with? Markel perhaps?


I tried State Farm but in Tampa, they require the boat to be parked inland. That’s a little harder to do that a dock.

Thanks for all the replies!!
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Old 17-01-2008, 11:03   #11
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Busdriver, remember that an insurance policy is just that: A policy, a written contract enforceable both ways under contract and insurance laws of your state. And, your state insurance laws take priority, so if anything in the contract contradicts them--that part is voided. If you know enough to read it and call them on it.

If the insurer simply asks you to detail a hurricane plan, that's nice but meaningless unless your policy ALSO refers to that plan and requires you to follow it without any modification, etcetera. So before you anticipate lawsuits, read the policy and see what it says. I'm sure it is six pages of tiny fine print, and I know from experience that insurance companies intentionally have them typeset in a way that makes them physically hard to read.

But somewhere in there, is the answer FOR THAT POLICY.

Of course, getting an insurer to actually give you a sample policy so you can read the full terms, before you have taken it out, is another whole task in itself. If you don't let the suckers, ergh, customers, see the policy in advance, they're much less likely to read it or argue about it. Ayup.

Sometimes, it can be enlightening to call your state or local department of consumer affairs, or insurance department, whichever you have, and ask them about local laws governing the insurance. (And perhaps requiring the availability of a sample policy if you have a problem with that.)
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Old 17-01-2008, 20:42   #12
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Quote:
Originally Posted by Bus Driver View Post
Latitude 9.5

I am dealing with IMIS and they are very good. Itís the underwriting company that has all these requirements (TLDallas). You said that you didnít require a hurricane plan, do you know which company it was with? Markel perhaps?


I tried State Farm but in Tampa, they require the boat to be parked inland. Thatís a little harder to do that a dock.

Thanks for all the replies!!
I'll have to look, I don't remember, but it's getting close to that time again. I am going to shop around and see what i can get now that we are at a dock, of course we're a 1/4 mile from the ocean so i dunno if that will fly with state farm or not.
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Old 17-01-2008, 21:42   #13
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Hi Bus Driver, if I understand correctly your boat is worth $45k and because of her age, depreciation costs of insured replacement parts will make any major repairs in fact self funded.
So what is then the value of comprehensive Hull Insurance? (other than liability).
My first impulse would be to ignore comprehensive and also consider that if you have a lot of other assets in your name as well as the boat, you might consider spending some of that saved premium to increase your liability protection.
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Old 17-01-2008, 22:01   #14
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Busdriver, TLDallas is another agent, not the actual insurer. Personnel - TL Dallas Special Risks - Marine Insurance Specialists

What is important is which company is actually carrying the risk. You have two agents involved, hence two commissions......
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Old 18-01-2008, 18:10   #15
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I may have solved my dilemma!! But I havenít seen the contract yet so we will see when that comes by the email. The insurance company is National Interstate out of Ohio. They are supposed to be A rated. They came back with a quote over 500$ cheaper at 1230 with half the deductible (and this is an agreed value).
The broker I got the quote through was these guys www.stricklandmarineins.com
Pelagic;
The policies that I am looking for are ďagreed valueĒ so they cut me a check minus deducible but only if itís a total loss. The depreciation only comes in if the hurricane does damage to the boat but not a total write off. And good point about increasing the liability, I always ask for close to the Max.

Psteele235;
Yeah I finally figured it out with TLDallas being a broker and the insurance company is actually Great Lakes Reinsurance. I think this is probably the most popular out there with older boats over 30ft in Florida.

Well I hope this National Interstate policy looks half descent, it may be a very interesting option for all you Florida Sailors.
Iíll keep you posted
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