Insurance or not?

[Hobiehobie]

We are trying to think through the risk benefit equation here on whether to spend US$10,000 a year on insurance or to just take out US$1M liability insurance for about US$900 and cross our fingers, be conservative, and take best measures to avoid problems.

Wondering how many of you out there do the same, with similar boats (monohull sailing boat in Caribbean, worth say US$700K).

While a complete boat loss would be a bad thing, the likelihood of this seems very remote. For moderate damage, theft, etc it seems saving 10k a year can add up quickly to spend on minor damage and repairs without being out of pocket.

We know the ultimate risk decision is ours, just trying to get a feel of how many other people have weighed this issue, and what side of the decision they fell on.

As always looking forward to hearing your opinions.

[Drift Woods]

You need insurance to cover the damage irresponsible boaters without insurance cause. Last year a boat next to mine chafed through it's mooring line and drifted into my bow pulpit and lifelines. The repair was over $4,000 dollars with no structural damage.

[Livia]

Well, our boat was worth about 10% of yours, but our insurance cost about 10% of yours so I guess it is similar math. We chose to go liability most of the time. One year we had some damage, and happened to have comprehensive that year. Honestly after the pain in the ass of dealing with yards and the insurance company, I wish we had just fixed it ourselves. YMMV, and obviously if we had had a complete loss we would have been happy to have had comprehensive that year.

[JPA Cate]

When we first started cruising, a couple couldn't get insurance at all. So, we sailed without any whatsoever for quite a long time. We spent annually, on items to keep ourselves out of trouble: radar, more anchor and chain, new sails as needed, forward looking depth sounder, GPS, etc. Eventually, in '96, we were dismasted, and the total repair costs for everything, mast, standing and running rigging, radar, antennas, came to ~ 30k USD. That cost was still quite a bit less than 15 yrs.' worth of insurance premiums would have been.

Lots has changed since then, particularly, the cost of GPS, and now, for haulouts, liability insurance is required by the yards. So we have it.

So, if you can ignore the national propensity to insure everything, and you pay attention and are careful, imo, all you need is liability. However, there is a great deal of pressure from society to fully insure, so ymmv. Good on ya for considering the options.

Ann

[sailorboy1]

My insurance last year was a little less than $1300. IfI had a boat that was so valuable that it cost $10,000 to insure it, well ................

[Dockhead]

Originally Posted by Hobiehobie

We are trying to think through the risk benefit equation here on whether to spend US$10,000 a year on insurance or to just take out US$1M liability insurance for about US$900 and cross our fingers, be conservative, and take best measures to avoid problems.

Wondering how many of you out there do the same, with similar boats (monohull sailing boat in Caribbean, worth say US$700K).

While a complete boat loss would be a bad thing, the likelihood of this seems very remote. For moderate damage, theft, etc it seems saving 10k a year can add up quickly to spend on minor damage and repairs without being out of pocket.

We know the ultimate risk decision is ours, just trying to get a feel of how many other people have weighed this issue, and what side of the decision they fell on.

As always looking forward to hearing your opinions.

$10,000 per year? Wow, call Pantaenius. I pay less than 1600 pounds (something over $2,000) for very comprehensive insurance for a similar boat of similar value.

I can't even imagine how that could cost so much. We have something like 5 million POUNDS of liability coverage, personal injury, legal coverage, medical evacuation, dinghy, personal effects, the whole works -- for a bit more than $2000.

As to the question of WHETHER insurance or not --

I think it boils down to -- do you feel lucky? The smaller damage is something you might be willing to play around with, but could you afford to replace the whole boat if she sank? Burned up? Maybe as a result of being smashed into by an uninsured fisherman? Yep, I was smashed into by an uninsured fisherman while at anchor. My boat didn't sink, but the damage was nearly $20,000. That's nearly 10 years of my premiums.

[daletournier]

Im with dockhead, try Pantaenius. Im paying $3000aud which covers me for offshore ovean crossing, I was impressed with their competitive pricing.

[Island Time O25]

I'd get the absolute minimum liability (mostly for marinas' sake and probably wouldn't cost more than $1K) and just kitty up the rest of that $10K cost as a self-insurance fund. In 10 years either at mutual fund or regular stock market it should be at least $150K if not significantly more. At least that's what the insurance company will make of your premiums if you give them that $10K a year for 10 years.

PS If as prev. posters say you can get same coverage for $2-3K/yr then it is a different calculation and does make sense to get covered as it is less then or about 0.5% of your vessel's value.

[Hobiehobie]

To several above...the US$10,000 is Pantaenius! They generally charge as premium 1% of the boats insured value, plus this year we are keeping the boat in Tortola, BVI (in a Pantaenius-designed and approved, very expensive hurricane cradle). For that increased risk we are up to US$9500 with an 8% deductible. I got several other quotes, all similar or more than 10,000.

Dockhead, you have a deal. How can I get that. If my insurance was a couple of thousands I would do it, but 10,000 tips the risk reward balance for us.

[Hobiehobie]

Originally Posted by sailorboy1

My insurance last year was a little less than $1300. IfI had a boat that was so valuable that it cost $10,000 to insure it, well ................

Well what? not sure I understand where you fall on the pro vs con? Just trying to get opinions, not poking you!!

[Hobiehobie]

Originally Posted by Drift Woods

You need insurance to cover the damage irresponsible boaters without insurance cause. Last year a boat next to mine chafed through it's mooring line and drifted into my bow pulpit and lifelines. The repair was over $4,000 dollars with no structural damage.

That is kinda my point. Even with a $4000 uninsured repair, in that situation I will have still been US$6,000 ahead!

[Hobiehobie]

Originally Posted by JPA Cate

When we first started cruising, a couple couldn't get insurance at all. So, we sailed without any whatsoever for quite a long time. We spent annually, on items to keep ourselves out of trouble: radar, more anchor and chain, new sails as needed, forward looking depth sounder, GPS, etc. Eventually, in '96, we were dismasted, and the total repair costs for everything, mast, standing and running rigging, radar, antennas, came to ~ 30k USD. That cost was still quite a bit less than 15 yrs.' worth of insurance premiums would have been.

Lots has changed since then, particularly, the cost of GPS, and now, for haulouts, liability insurance is required by the yards. So we have it.

So, if you can ignore the national propensity to insure everything, and you pay attention and are careful, imo, all you need is liability. However, there is a great deal of pressure from society to fully insure, so ymmv. Good on ya for considering the options.

Ann

Thank you for that. Something to think about...

[surf_sail]

Dockhead and I had a lengthy debate on insurance in another thread:

http://www.cruisersforum.com/forums/...182789-15.html

The insurance discussion starts near the end of the thread - you may find it helpful.

You can consider self insuring, but without knowing what the rest of your financial portfolio looks like no one can say if it's a wise idea. It really comes down to what happens to your financial situation in the unlikely event you have a major/total loss. If you can survive that without insolvency or severe hardship then consider self insuring - statistically you'll come out on top. If not, either pay the insurance, find a lower cost policy (e.g. get out of the hurricane belt), or downsize to a boat you can self insure and/or afford the policy on.

[Paul L]

Even though the likely hood of losing the boat is low, that is one of the main things you are insuring against. If it was a high likelyhood then the insurance companies would walk away from it. You are adding to the risk by keeping the boat inside the hurricane zone during hurricane season. If you lost the boat would it be a significant hit to your financials, would it be life changing, would you be able to replace it and continue on cruising if you wanted to? Question s that only you can answer and evaluate.

I would check that the umbrella policy would actually cover damage caused by an uninsured vessel that you owned. Those policies tend to have wording that makes them secondary coverage, not primary.

[CaptJamesCook]

I would assume the high premium is because the location/hurricane zone.
I would talk to the locals and ask them how many boats damaged​ last hurricane season. How badly damaged.Then decided if you feel lucky and how much you could afford. $10,000-$20,000-$30,000-$80,000?
Fairly only you can judge that.
I would not leave my boat in hurricane zone if at all possible. I know not what you were looking for.