Insurance, what can you afford to lose?

[belizesailor]

Originally Posted by Mike OReilly

Yes, but my only point is that this is only 1/2 of the equation. It must also consider the likelihood of an event happening. A meteor impact is going to mean a very bad day for anyone nearby, but none of us take precautions (or buy insurance) against it. Why? Because the odds of this event are low.

The problem I see is that most people focus on the impact side of the equation, and fail to look at the likelihood factor. Look at any advertisement or marketing for insurance and it always focuses on Impact. So it’s not by accident that we focus on Impact — we’re directed there by those who benefit most from stoking our fears.

Scarem then Sellem...one of the oldest and most effective sales tactics in existence...just reference religion for its earliest uses.

[daletournier]

Originally Posted by belizesailor

Sure you can, its called "life insurance".

Its relatively cheap and makes sense for many....like the typical 2.5 kids, minimal savings, and a big mortgage folks.

Yer, but it dosent help you, your dead!

[belizesailor]

Originally Posted by daletournier

Interesting that we focus on the impact side of losing the boat so much yet theres probably just as much risk of us losing our life, yet we dont insure that in any way that benefits us, meaning we cant. My point is we cant hedge our life , yet we still go ,yet losing our life is much greater than losing the boat......im not sure ive expressed that very well.

I wonder how many of us would still cruise if there was no such thing as yacht insurance?

A lot more would buy much cheaper boats I suspect!

I suspect that the relative $ value of boats bought by cruisers has gone up more dramatically then LOA. Catamarans would contribute dramatically to increasing the average boat cost, while at the same time not increasing average LOA much.

[Mike OReilly]

Originally Posted by belizesailor

Scarem then Sellem...one of the oldest and most effective sales tactics in existence...just reference religion for its earliest uses.

Yup, the oldest game in the book. It’s well understood that fear and threats of loss are some of the strongest motivators. Marketers and politicians know it well.

Oh, and I think you’re going to hell for that remark .

[daletournier]

Originally Posted by belizesailor

A lot more would buy much cheaper boats I suspect!

I suspect that the relative $ value of boats bought by cruisers has gone up more dramatically then LOA. Catamarans would contribute dramatically to increasing the average boat cost, while at the same time not increasing average LOA much.

I agree. I probably would of purchased a less expensive boat by half if I thought I wasnt going to insure....maybe.

I know several large boats that only have liability but originally started with full comp, i doubt they would of purchased intially without full insurance yet their minds have changed along the way.

[belizesailor]

Originally Posted by Mike OReilly

Yup, the oldest game in the book. It’s well understood that fear and threats of loss are some of the strongest motivators. Marketers and politicians know it well.

Oh, and I think you’re going to hell for that remark .

I dont believe in hell...well, not for me anyway, but if religions get to fabricate their own versions of heaven...then so do I...its a wonderful place where no insurance is needed. [emoji41]

[Mike OReilly]

Looking at the insurance survey I ran last year shows that nearly 15% of respondents reported they had no coverage. The reasons ranged from “I just don’t want it” and “too expensive” to “I can’t find anyone to cover my old boat.”

It’s not a statistically sound survey, so I don’t trust the actual numbers, but it indicates there’s already a significant percentage of folks in this crowd who have no insurance.

[Dooglas]

Originally Posted by daletournier

Yes, but it doesn't help you, you're dead!

But the logic is still the same. You should consider insurance for risks you can't , or don't, choose to take. In that case the risk you don't choose to take is leaving your family with small children destitute. Likewise a liability claim of $500K for cleanup after a sinking and fuel spill, or a healthcare bill of $800K for a catastrophic injury or illness are examples of risks you may not choose to take.

[Paul L]

Originally Posted by daletournier

Interesting that we focus on the impact side of losing the boat so much yet theres probably just as much risk of us losing our life, yet we dont insure that in any way that benefits us, meaning we cant. My point is we cant hedge our life , yet we still go ,yet losing our life is much greater than losing the boat......im not sure ive expressed that very well.

I wonder how many of us would still cruise if there was no such thing as yacht insurance?

You need the boat insurance just in case that you or your partner survives the accident.

MikeO, you keep pointing out that the likelihood of a cruising boat having a claim is exceedly low, and you are right that we don't insure against meteor strikes. Going to the extreme, or as they say absurd, limits can make us feel better about our arguments, but not sure it really helps to understand them. You didn't happen to ask in your insurance survey if the respondent had ever made a marine claim, did you?

There's also talk here about scare advertising convincing people to buy insurance. Can't say I've ever paid any attention to marine insurance ads. Have paid attention to the wrecked yachts on reefs as I enter new places and the sunken Cat I helped salvage after an afternoon storm and the boats hit by lightning in tbe same anchorage I was in.

[44'cruisingcat]

Originally Posted by daletournier

Yer, but it dosent help you, your dead!

Doesn't it help while you're alive, to know that if you're killed your family will still have a home?

[Mike OReilly]

Originally Posted by Paul L

...MikeO, you keep pointing out that the likelihood of a cruising boat having a claim is exceedly low, and you are right that we don't insure against meteor strikes. Going to the extreme, or as they say absurd, limits can make us feel better about our arguments, but not sure it really helps to understand them. You didn't happen to ask in your insurance survey if the respondent had ever made a marine claim, did you?

Yes, it is an extreme example, but the stats are just as clear on accident data. I’ve posted it a number of times. Happy to do so again if you like.

I did ask about claims, but in an indirect way. In my survey, 76% had never made any claim.

[Paul L]

Originally Posted by Mike OReilly

Yes, it is an extreme example, but the stats are just as clear on accident data. I’ve posted it a number of times. Happy to do so again if you like.

I did ask about claims, but in an indirect way. In my survey, 76% had never made any claim.

So in the unofficial survey 1 in 4 people have made a claim. That's not exceedly low. Sure it is over many years, so in any one year your risk maybe exceedly low. You just don't know if its your year or not.

[Mike OReilly]

Originally Posted by Paul L

So in the unofficial survey 1 in 4 people have made a claim. That's not exceedly low. Sure it is over many years, so in any one year your risk maybe exceedly low. You just don't know if its your year or not.

No, it’s not. But it wasn’t a question about claims. It was a question about satisfaction. Besides, this tells us nothing about the type of claim. And as everyone is quick to point out (and as I keep repeating) this survey is not statistically sound.

But I’m confused … are you suggesting boating with a cruising level boat is not a very safe activity? We can look at the USCG official stats if you want to discuss it.

[belizesailor]

Originally Posted by belizesailor

A lot more would buy much cheaper boats I suspect!

I suspect that the relative $ value of boats bought by cruisers has gone up more dramatically then LOA. Catamarans would contribute dramatically to increasing the average boat cost, while at the same time not increasing average LOA much.

My first cruising boat was relatively very inexpensive. Enough so that when my insurance company wouldnt cover me to go to Cuba, it was an easy decision...I went anyway!

There is a certain freedom that comes with not being constrained by insurance considerations.

I was surprised that even for my liability-only coverage this year, the underwritter wanted a recent survey. Fortunaltely I already had one. I suppose it makes sense that they wouldnt want to cover some unseaworth hulk thats going to sink in a marina and create a big claim.

[Paul L]

Originally Posted by Mike OReilly

.....

But I’m confused … are you suggesting boating with a cruising level boat is not a very safe activity? We can look at the USCG official stats if you want to discuss it.

Its all in how you look at the wording. A cruising boat covers a really large range, anything from going up and down the US east coast to doing high latitude adventure sailing. Make the cohort large enough and you can comfortably say the risk is very low. Of course that begs the question what does comfortably low risk mean.
If I narrowed the definition of cruising to a smaller, more remote group then I'd say the risks are pretty real, certainly more significant than machismo, experience, or being an independent soul can or should deny.
I don't want to make up BS statistics that are in essence purely anecdotal, but those anecdotes influence my evaluation of risk significantly - cause I don't have access to hard numbers.
Doing the Pacific coast of Central America was really enlightening as to lightning. The number of boats I knew of who were hit by lightning vs the relatively few boats there makes it a significant and costly risk. Same goes for a large part of the year in the San Blas islands (Panama cruisers hangout spot).

Anyone who has spent time cruising in the San Blas has to be impressed with the number of really nice and some not so nice cruising boats up on the reefs. These aren't some decades long accumulation. Each time I went back there there were new ones already on the reefs and at least one or two added during the time we were cruising. How large is the group of boats? Its measured in hundreds, not thousands.

The total number of boats that cross the S Pacific each year is not that high, low few hundred. They definately don't all make it intact.

The Indian Ocean crossing does not get very many total boats each year. Every loss or significant damage materially changes the loss percentage. Some years it has been a bit of a demolition derby. Some years the insurance companies don't break even on this route
Crystal Blues: The 2015 Indian Ocean Crossing - Five Vessels Lost, A Very Tough Year

I'm deliberately ignoring the in season hurricane wipeouts in the Caribbean. To me those are not 'normal' cruisers risks, more like people making a choice to be in the impact zone in season and loosing the dice roll.

It all comes down to definitions and the group of boats you want to include as being similar to what you are doing to meaningfully evaluate your own risk. It does no good to evaluate your risk by comparing the risk of a large group of boats who not doing what you are doing. I'll also point out the risks involved in an area or passage are far higher the first time you do it, than after you've experienced the area. So a cruiser that is say circumnavigating is being continually exposed to new and fun risks.