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Old 02-08-2010, 10:53   #1
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Sailing Around the World - To Insure or Not to Insure

Hi there...

My husband and I are planning an extended cruise (potentially circumnavigating) that we anticipate to take 2-3 years. We have a 1975 Hallberg-Rassy Rasmus that we are currently outfitting for our journey (we leave from Chicago in September)...

I have been reading lots of books (namely Beth Leonard's Voyagers Handbook, which I HIGHLY reccommend!) and sites that offer advice about insuring a boat for a journey such as this and I am very strongly considering NOT insuring it.

Am I a total idiot? Here's the deal: The boat is paid for in FULL, so we don't owe any money to "the man" and just to get the Great Lakes insurance that we have currently was very difficult and full of "you can do this, you can't do that's" due to the fact that we have an old boat.

Does anyone have any experience or advice on this subject? How does insurance work internationally and such? Is it worth it?

Thanks in advance!

Brittany
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Old 02-08-2010, 11:40   #2
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[QUOTE=windtraveler;495734
Does anyone have any experience or advice on this subject? How does insurance work internationally and such? Is it worth it?
[/QUOTE]

I don't think it's worth it, but I've not had any issue...except for a stolen dinghy.

50 yards away from me is a boat that just limped back into the anchorage without a mast and two roller furling foils bent...gouges in the hull and a story to tell. They have insurance. They will be making a claim AND if the company pays I think they might say it was worth the insurance.

The questions for me are:

Am I optimistic, pessimistic, blissful ignorant, or fretfully ignorant?
How much am I willing to loose and at what rate am I willing to loose it?
How well do I take loss, big or small?
Are my concerns based on reason, or fear...or should I be fearful for a reason;-)

It appears most people go with their fingers crossed anyway. You pay your money and take your chances. Keep your money and take your chances.
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Old 02-08-2010, 14:31   #3
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I cruise almost all the time ,same situation as you,ins. too much.marc
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Old 02-08-2010, 14:35   #4
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Interesting dilemma. The cost of insuring a boat domestically is about 1-1.5% of hull value. I don't know how high percentage gets if you just want a free pass to go wherever you choose to go.
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Old 02-08-2010, 15:09   #5
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G'Day Brittany,

Obviously, it is a very personal decision. FWIW, Ann and I have been cruising full time since 1986, and have never had full insurance. In 1996, ten years out, we were dismasted, loosing everything above the deck. It was expensive! But, when we had added up all the bills, we were still ahead of having paid ten years worth of offshore insurance premiums. Writing all those checks hurt less after we figured this out... but it still hurt!

Nowadays we have finally caved in and purchased third-party coverage here in Australia. The primary reason is that many boatyards and marinas say (at least on paper) that you must have it to utilize the facilities. So far, we've never had to produce the policy for such folks, so who knows if it is truly necessary. Further, Aussies are becoming nearly as litigous as Yanks, and we were going to spend some time around Sydney and thought it wise to protect ourselves.

As to the risks -- we feel that the further offshore one sails, the less the risks are, unless you follow Evans and Beth to the high latitudes (Brrr). This is highly location dependant, and only you know where you intend to cruise. The strictures that insurers place on ones activities can actually increase risk to the yottie. We know of at least one case where a single-hander left the islands to return to NZ at a bad time because of her policy's date restrictions. She lost the boat en route...

It's hard for us Yanks to give up the idea of insurance. We're trained from birth to use insurance to avoid personal responsibility for our actions. For the first few years I remember that both Ann and I felt kinda naked without it, but after a while we realized that using the money we saved to better equip our boat so that we had a better chance of staying out of strife was a good trade-off. So far I think that it has worked for us (touching wood)!

Cheers and good luck with your decision and your voyaging

Jim and Ann s/v Insatiable II lying Manly Qld Oz, but northbound today at last
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Old 02-08-2010, 16:33   #6
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G'day, mates. Almost every marina and hard stand here in N.Z. now requires liability insurance and they do ask for a copy. We also ask request a copy of their liability cover due to the fact that, believe it or not, several boats have been "dropped" from the travel lift. From our experience, the greatest risk comes from uninsured yachties who attempt to anchor too close with insufficient scope. It doesn't take much to be confronted with a $30K to $40k yard bill to complete the reparis. FYI, 200 mile coastal full cover with a $1K deductible can be obtained here in N.Z. for around 1/2 % of value of your craft (didn't see any definition of craft in the yacht, boat, ship thread!). Cheers.
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Old 02-08-2010, 16:51   #7
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I would try and find liability insurance if at all possible. If you sink you are liable in U. S. waters for fuel spill cleanup costs at the very least. I would also try for a casualty policy with very high deductibles. Insurance is supposed to be for a catastrophe. Broken mast doesn't meet that threshold, unless it holes and sinks the boat - see above.
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Old 02-08-2010, 17:35   #8
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We have ours because the marina and bank demand it. Once the boat is paid off in total and we're gone from the marina, so goes the insurance. Use the money to buy a bigger anchor.
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Old 02-08-2010, 18:46   #9
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Quote:
Originally Posted by matauwhi View Post
FYI, 200 mile coastal full cover with a $1K deductible can be obtained here in N.Z. for around 1/2 % of value of your craft (didn't see any definition of craft in the yacht, boat, ship thread!). Cheers.
I should definitely move to NZ. It's way more than that for me in the US - 1.5%. I've never had a claim, but I would feel vulnerable without it. But it adds up.
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Old 02-08-2010, 19:41   #10
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In the places which demand proof of liability insurance, like NZ, the Med, Mexico, etc., you can usually find a reasonably priced third party liability policy. In other places prices are ridiculous--like 1% of value for liability only and 3-3.5% for full insurance. If the insurance companies can make a profit at 0.5% for full insurance in a stormy place like NZ, asking for 3.5% is pure greed. You will have to look at what is available and make your own decision.
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Old 02-08-2010, 19:45   #11
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I'd look for $5,000 deductible. Insurers love high deducts (used to be one, FWIW). They've run the numbers and have figured out the nickel and dime claim makers are the ones that will likely make the BIG claims down the road. Premiums reflect that and you'll get cancelled making dinky claims against a policy....
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Old 02-08-2010, 21:12   #12
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G'day, mates, part of the lower costs for insurance here in N.Z. is due to the fact they since we have government supplied health insurance, you can not sue a third party for medical costs. Same for auto coverage as well. Cheers.
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Old 02-08-2010, 22:40   #13
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Question for all you insurance folks: Why does the value of your yacht influence the cost of 3rd party liability insurance? You can cause just as much harm to a 3rd party with a junker as with a Hinkley or Swan...

I've always wondered!

Cheers,

Jim
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Old 03-08-2010, 00:38   #14
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G'day, Jim, I still have full coverage, thus the relation between premium and hull value. At some point, we will switch to liability cover only. I haven't asked for any quotes yet. Cheers.
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Old 03-08-2010, 21:09   #15
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You will need liability insurance in order to stay in most marinas and boatyards inside the USA. The marinas and boatyards in many other countries are now also require at least liability insurance.
Contact I.M.I.S. and ask about their Jackline liability only policy. International Marine Insurance Services
It is very reasonably priced and when I got mine I did have to have a survey done and fill out all the forms as though I was getting full comprehensive coverage - but after that was done it was no problem getting and keeping the Liability-only up to date.
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