Some Opinions from the Insurance Industry

[GordMay]

Excerpted from: ”Caribbean Compass” (January 2006) http://www.caribbeancompass.com/
VIEW FROM THE YACHT CLAIMS DESK ~ BY GUY MATTHEWS
Yacht Insurance Underwriting
Complete article at: http://www.caribbeancompass.com/underwriting.htm

“ ...
There are certain truisms apparent to the occupant of the Yacht Claims Desk, many of which can incite violent arguments if restated in polite company. These certainties, experience-based rather than theoretical, are listed below in no particular order.

* Wood yachts are today generally poor insurance risks
* Fiberglass is the most practical construction material today for yachts less than 60 feet in length.
* Steel and aluminum yachts, while often better constructed, are more difficult and costly to repair due to the lack of skilled technicians and facilities.
* Lighting damage is one of the most commonly occurring losses in the tropics.
* Lightning diffusers and diverters have no provable effect on lightning strike occurrences.
* Notwithstanding their growing popularity, catamarans are more exposed to loss than monohulls. Experience indicates that the catamaran is more likely to sustain a lightning strike; the catamaran is more exposed to dismasting than other vessels; the beam of the catamaran makes secure mooring more difficult to obtain; catamarans present a significant capsizing risk. (Any vessel with an escape hatch in the hull bottom should be viewed with concern.); the stability of the catamaran makes it popular with those with less than extensive seagoing skills; ad infinitum
* Older boats are more exposed to rigging failures hence the need for periodic rigging surveys;
* Rigging surveys should be conducted before ocean passages
* Carbon fiber mast and hulls are extremely expensive and difficult to repair.
* Theft is a risk which can be managed by restrictive policy conditions.
* Dinghies and tenders should not be covered by insurance when under tow.
* Gasoline-powered boats are more dangerous than diesel-powered boats.
* Every vessel in tropical waters (mainland and islands) should have a real world-workable hurricane protection plan.
* Sails or yacht canvas items left in place in a named wind storm increase the likelihood of damage to the vessel and should not be subject to insurance coverage.
* Trimarans and vessels built of ferro-cement are generally very poor insurance risks.
* Speed is a factor in powerboat loss occurrences - the higher the speed the more likely an operating loss.
* The insuring of charter boats in competitive regattas should be undertaken with extreme care.
* Typical charter boat damage deposits do not adequately respond to the increased risk in regattas.
* Fixed-fee yacht deliveries create an increased potential for loss.
* Single-handed operation of yachts on ocean voyages increases the potential for loss.
* Charterers are no more likely to imperil the safety of a charter vessel than are members of the general boating public to imperil a private vessel.
* There is difference in loss exposure and reparability among vessels by various manufacturers.
* The yacht survey is generally inclined to reflect the view of the party paying for the survey.
* The most important factor: there is no substitute for competent and experienced seamanship.

There is no magic yacht underwriting bullet. No two yacht risks are the same and successful underwriting of each risk is a skill developed by experience. “

[CaptainK]

This is Kai Nui's area of expertise.

I'm looking forward in hearing all about his input into this subject?

[Jerry Woodward]

Originally Posted by GordMay

* The most important factor: there is no substitute for competent and experienced seamanship.
“

My experience is mostly daysailing monohulls and is largely undocumented. So, when I buy my cruiser in the next few years, I am going to appear to be a totally inexperienced sailor for insurance purposes, even though I know I will not put myself or my partner at risk until I know exactly what I am doing. Does anyone have a sense of how much insurance companies will penalize an inexperienced cruiser? Do some deny insurance altogether for new cruisers? I plan on doing some bareboat charters with instruction between now and then but is that going to help? How do they evaluate experience? Do they look at sailing certifications?

[Maren]

Originally Posted by GordMay

* The most important factor: there is no substitute for competent and experienced seamanship.
“

Amen.

That was really interesting. Some of it was sort of common sense (e.g.,The yacht survey is generally inclined to reflect the view of the party paying for the survey) but there were some real suprises there too (e.g.,Charterers are no more likely to imperil the safety of a charter vessel than are members of the general boating public to imperil a private vessel.)

[Hud3]

Originally Posted by Jerry Woodward

My experience is mostly daysailing monohulls and is largely undocumented. So, when I buy my cruiser in the next few years, I am going to appear to be a totally inexperienced sailor for insurance purposes, even though I know I will not put myself or my partner at risk until I know exactly what I am doing. Does anyone have a sense of how much insurance companies will penalize an inexperienced cruiser? Do some deny insurance altogether for new cruisers? I plan on doing some bareboat charters with instruction between now and then but is that going to help? How do they evaluate experience? Do they look at sailing certifications?

Well, I do know that insurance brokers ask for a sailing resume from everyone who will be sailing the boat, but I have no idea how much weight they give to "schooling" and experience.

Maybe Susan, from TabbyCat, can help us out here.

[waterworldly]

I would be interested in that too, Hud. I have no documented experience as well and wonder if I could even get insurance on a cruiser. I would take classes if necessary, but would prefer to have them on my own vessel. But in the meantime, how could I secure insurance, especially here in "hit and run" south Florida?

[TabbyCat]

Most insurance companies like to see 3 years or more experience with a similar sized vessel before they will insure you. This of course, begs the question, how do I get the experience if you won't insure me to get my first boat?

By experience, they do not necessarily mean ownership experience, although that is preferred. I have written polices for people who have never owned a boat before but they did lots of charters and sailed other people's boats, and were able to put together a pretty long sailing resume. So start keeping a log of your sailing experience- dates, distance offshore, type of boat. There are lots of opportunities to crew for other people, if you just search on the net.

If you are contemplating a trans-Atlantic or Pacific crossing, it would be a good idea to see if you can sign up as crew for a similar passage on someone else's boat. Some insurance companies will require you to have "Blue water" crew on board for those kinds of passages. If you have already made an ocean crossing, you would be able count yourself as the Blue water crew, rather than being forced to have additional people on your boat just for insurance purposes. Plus you'll learn a lot on the trip. Mahina Tiare Expeditions also offers very through on-board courses.

By Similar Sized boat they are usually looking for a jump of not more than 10' or 30%. The underwriters also like to see requests for similar types of boats, for example power to power or sail to sail. Some companies even question moving from a monohull to a multihull if you don't have multihull experience of some kind. I find that last one pretty amusing, since in my personal view, I find our catamaran much easier to maneuver & dock than our previous monohull.

Don't be discouraged, and please don't organize your sailing around insurance! You can get insurance, it's just that if you take steps to build your sailing resume, you'll have more choices available to you, which generally means a lower cost.

[irwinsailor]

I was surprised that my insurance companies have not been to concerned about the size jump in my case. The biggest sailboat that I owned before Amanda Faye was a Cal 21 and the last boat I had was a 17' Wood Chris*Craft runabout that was holed and sunk and a total loss. I had Boat US first then National marine underwriters and now Freemont and each company has charged less than the past company with much more coverage.

[Alan Wheeler]

Can I ask for an English to English translation of this wording please.

are today generally poor insurance risks

Poor risk= it's kinda like two negatives make a positive. To me, it could mean the risk is low, or in other words there is little risk, or....
it could mean it's a high risk. Which is it???

[catty]

Originally Posted by GordMay

Excerpted from: ”Caribbean Compass” (January 2006) Caribbean Compass Homepage
VIEW FROM THE YACHT CLAIMS DESK ~ BY GUY MATTHEWS
Yacht Insurance Underwriting
Complete article at: Yacht Insurance Underwriting
* Notwithstanding their growing popularity, catamarans are more exposed to loss than monohulls. Experience indicates that the catamaran is more likely to sustain a lightning strike; the catamaran is more exposed to dismasting than other vessels; the beam of the catamaran makes secure mooring more difficult to obtain; catamarans present a significant capsizing risk. (Any vessel with an escape hatch in the hull bottom should be viewed with concern.); the stability of the catamaran makes it popular with those with less than extensive seagoing skills; ad infinitum

* Trimarans and vessels built of ferro-cement are generally very poor insurance risks.
“

Youv'e done it now Gordmay

[David_Old_Jersey]

Trimarans and vessels built of ferro-cement are generally very poor insurance risks.

Is that why no Ferro Tri's?

[Alan Wheeler]

Could you imagine the weight. I don't think I can ever say I have seen a steel tri.

[Therapy]

Originally Posted by Alan Wheeler

Can I ask for an English to English translation of this wording please.
Poor risk= it's kinda like two negatives make a positive. To me, it could mean the risk is low, or in other words there is little risk, or....
it could mean it's a high risk. Which is it???

I think it should read:

are today, generally poor insurance risks

Poor insurance risks means they ( the insurance companies) have to pay out too much (whatever that is).
So, poor for them.
Now if one has the "poor risk" boat and the same premium as the "low risk" neighbor, the view might change.

I hope this clears it up for you.

[TabbyCat]

Sounds like you've got it figured out. The "Opinions from the Insurance Industry" is definitely written from the insurance underwriter's viewpoint. So a "poor risk" is what you might call a "bad bet" - something to be avoided. The things that are considered a poor risk evolves over time. Many years ago, the new technology of fiberglass boats was considered a "poor risk" - underwriters wanted to stick with the tried and true wooden hulls. So we can only hope that Carbon Fiber and Trimarans will someday move into the "good risk" category.

[Alan Wheeler]

In our English, we would most likely have said, "Bad Insurance risk" or it is or has a "high risk".