Insurance, what can you afford to lose?

[daletournier]

Originally Posted by 44'cruisingcat

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

I'm not saying life insurance doesn't have a result if you die, my point is you can't circumvent your death, there is no insurance can take the risk of death away, but we cruise and except that risk the potential price being extremely high.

[daletournier]

Originally Posted by Paul L

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.

The risks are very hard to measure, don't really know if they can be measured.

As cruisers, surely we are more exposed to the likelihood of an accident purely because we are out there, more time on the water, more miles and in not as well known environments.

On the other hand generally speaking our boats are better prepared and we are more experienced which should decrease risk in our favour to some degree.

It's also impossible to understand the risks without understanding what has caused some of those accidents. An eg in the Indian ocean article Paul mentioned, some of those boats that came to grief took unnecessary risks, the catamaran lost was passage making in Cyclone season, the Chagos yacht tied to a mooring I would tie to (I've been there) etc. I remember reading that article prior to my crossing and was like "wow", I talked to some guys that crossed that year and knew some of the people that had the incidents and they clarified that all were true BUT also added more info that slightly changed the way that article could be interpreted.

[Dooglas]

Originally Posted by Paul L

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.

This was a very good post, and rightly points out that there is cruising and then there is cruising. Not all of us are doing the San Juans or the BVI. Averages are often misleading.

[Mike OReilly]

Originally Posted by Paul L

...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.

Obviously specificty and locality matters when defining risk. Some cruising areas and some cruising activities are riskier than others. No one is suggesting otherwise. It’s what I’ve written… so I’m not really clear what it is you seem to be taking umbrage over in my posts.

My simple point is that risk is a two-factor consideration, and as per the OP’s initial posts, all too often people focus on the potential impact of an event, and downplay or even ignore the odds of the event ever happening.

[Paul L]

Originally Posted by daletournier

The risks are very hard to measure, don't really know if they can be measured.

As cruisers, surely we are more exposed to the likelihood of an accident purely because we are out there, more time on the water, more miles and in not as well known environments.

On the other hand generally speaking our boats are better prepared and we are more experienced which should decrease risk in our favour to some degree.

It's also impossible to understand the risks without understanding what has caused some of those accidents. An eg in the Indian ocean article Paul mentioned, some of those boats that came to grief took unnecessary risks, the catamaran lost was passage making in Cyclone season, the Chagos yacht tied to a mooring I would tie to (I've been there) etc. I remember reading that article prior to my crossing and was like "wow", I talked to some guys that crossed that year and knew some of the people that had the incidents and they clarified that all were true BUT also added more info that slightly changed the way that article could be interpreted.

Dale
At first read I just shake my head in agreement ------ but. When your mind is pretty much set its pretty easy to fall into some dubious reasoning. One of the things that I dislike most on CF is when an accident is reported and the crowd jumps on with what the skipper did wrong and explicitly or implicitly says so this could never happen to me. If I'm good I skip the thread, if I'm grumpy I jump in. Sometimes its enough for me to stay away from CF for awhile.
Your arguments indicate why the risk is really less for you, or for the experienced cruiser or? In my comments above I did the same rationalization by saying that I don't include the in season hurricane disasters in the Carib as part of my risk. Basically implying this will never happen to me because I'm a better skipper and will not be in the the Carib in the off season. Which is basically a true statement. It just doesn't include the unknowns, like perhaps we are passing through and have a medical issue that puts us at home for two months, ending up having to deal with hurricane season.

Before I did Central America I really had no appreciation how bad the lightning situation can be. The second time I went I was more careful to show up latter in the year to reduce tbe risk , but that's all it did; reduce. So now I can be smug with my knowledge. Hard to be smug when you are doing passages to new places, with new weather systems and new levels of different types of dangers.

I have a friend who goes without insurance on a philosophical rational. He finally got hit by lightning. He continued the rational by proudly saying he fixed his boat back up for less than the cumulative annual fees would have been for insurance over his cruising time. Sure, but to me lots didn't get done that surely would have gotten completed if the boat was insured.

It only takes a few minutes or milliseconds to make a bad decision. I've made a few of those over my cruising career. Never paid too dearly, but as they saybut by the grace of god go I and I'm not religous.

[Paul L]

Originally Posted by Mike OReilly

Obviously specificty and locality matters when defining risk. Some cruising areas and some cruising activities are riskier than others. No one is suggesting otherwise. It’s what I’ve written… so I’m not really clear what it is you seem to be taking umbrage over in my posts.

.....

No umbrage at all. Just gently disagreeing with the blanket statement that cruising is very low risk statement, which then encourages the lack of need for comprehensive insurance. It's more nuanced and sometimes your current experience might not apply as well to the next unknown location.

[Mike OReilly]

Originally Posted by Paul L

No umbrage at all. Just gently disagreeing with the blanket statement that cruising is very low risk statement, which then encourages the lack of need for comprehensive insurance. It's more nuanced and sometimes your current experience might not apply as well to the next unknown location.

Point taken. Some areas and some practices are riskier than others. Cruising in an area with a lot of lighting activity would be less safe than a place without (all else being equal). And since none of us can know the unknown, recognizing this reality is part of any rational risk assessment.

But unless you can point to something more than anecdotal data, I stand by my assessment that cruising is generally a very safe activity. And by safe I the mean in comparison to other common activities many of us routinely undertake: driving, walking, swimming, flying, eating various foods, etc…

[valhalla360]

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.

The cost of the insurance should correlate to the full risk (likelihood * impact), so the likelihood is already incorporated.

So would you say, health insurance is a silly thing to get because you eat healthy and exercise, so you aren't worried about getting a heart attack (I've seen you post how great it is to have insurance via the Canadian govt)? What's different about this?

[daletournier]

Originally Posted by Paul L

Dale
At first read I just shake my head in agreement ------ but. When your mind is pretty much set its pretty easy to fall into some dubious reasoning. One of the things that I dislike most on CF is when an accident is reported and the crowd jumps on with what the skipper did wrong and explicitly or implicitly says so this could never happen to me. If I'm good I skip the thread, if I'm grumpy I jump in. Sometimes its enough for me to stay away from CF for awhile.
Your arguments indicate why the risk is really less for you, or for the experienced cruiser or? In my comments above I did the same rationalization by saying that I don't include the in season hurricane disasters in the Carib as part of my risk. Basically implying this will never happen to me because I'm a better skipper and will not be in the the Carib in the off season. Which is basically a true statement. It just doesn't include the unknowns, like perhaps we are passing through and have a medical issue that puts us at home for two months, ending up having to deal with hurricane season.

Before I did Central America I really had no appreciation how bad the lightning situation can be. The second time I went I was more careful to show up latter in the year to reduce tbe risk , but that's all it did; reduce. So now I can be smug with my knowledge. Hard to be smug when you are doing passages to new places, with new weather systems and new levels of different types of dangers.

I have a friend who goes without insurance on a philosophical rational. He finally got hit by lightning. He continued the rational by proudly saying he fixed his boat back up for less than the cumulative annual fees would have been for insurance over his cruising time. Sure, but to me lots didn't get done that surely would have gotten completed if the boat was insured.

It only takes a few minutes or milliseconds to make a bad decision. I've made a few of those over my cruising career. Never paid too dearly, but as they saybut by the grace of god go I and I'm not religous.

After spending time around Singapore with a carbon fibre mast (my last boat) I understand the lighting concerns.

Interesting thought, maybe the owners of all the yachts that don't go anywhere subsidise us guys that go far and wide, maybe we are quite a risky bunch.

[valhalla360]

Originally Posted by daletournier

I'm not saying life insurance doesn't have a result if you die, my point is you can't circumvent your death, there is no insurance can take the risk of death away, but we cruise and except that risk the potential price being extremely high.

Life insurance is not there to keep you alive. It is there to protect your family if you die. It's a red herring to imply otherwise.

Reality is once you have enough net worth that they can survive comfortably if you die (very typical for retired couples who've planned well and who's kids are working adults), life insurance doesn't have much point.

Where life insurance makes a lot of sense is a young family with one parent being the primary bread winner...if they die, the family is likely to be destitute.

[daletournier]

Hey guys, just like thank everyone for a thought provoking thread that has stayed very civil.

There's been some very good arguments by respected posters. Well done.

[daletournier]

Originally Posted by valhalla360

Life insurance is not there to keep you alive. It is there to protect your family if you die. It's a red herring to imply otherwise.

Reality is once you have enough net worth that they can survive comfortably if you die (very typical for retired couples who've planned well and who's kids are working adults), life insurance doesn't have much point.

Where life insurance makes a lot of sense is a young family with one parent being the primary bread winner...if they die, the family is likely to be destitute.

I get that, I understand life insurance, I'm obviously not expressing myself well.

We go to sea knowing we could die and no way to hedge around that, we accept that we could lose the most important thing, life BUT we may not go to sea knowing we could lose the yacht, we insure against that.

[44'cruisingcat]

Originally Posted by daletournier

I'm not saying life insurance doesn't have a result if you die, my point is you can't circumvent your death, there is no insurance can take the risk of death away, but we cruise and except that risk the potential price being extremely high.

I guess that's the point. Insurance doesn't stop bad things from happening. It just lessens the financial impact of them.

[Paul L]

Originally Posted by daletournier

After spending time around Singapore with a carbon fibre mast (my last boat) I understand the lighting concerns.

Interesting thought, maybe the owners of all the yachts that don't go anywhere subsidise us guys that go far and wide, maybe we are quite a risky bunch.

Argh, are you telling me I'm headed back to another lightning capital? My wife hates when she sees me huddled up in a ball at the end of the settee whimpering.

Real men don't take subsidies - just honest tax deduction entitlements.

[Paul L]

Originally Posted by Mike OReilly

Point taken. Some areas and some practices are riskier than others. Cruising in an area with a lot of lighting activity would be less safe than a place without (all else being equal). And since none of us can know the unknown, recognizing this reality is part of any rational risk assessment.

But unless you can point to something more than anecdotal data, I stand by my assessment that cruising is generally a very safe activity. And by safe I the mean in comparison to other common activities many of us routinely undertake: driving, walking, swimming, flying, eating various foods, etc…

The last 30,000 miles of cruising that I have done was far more risky than driving in the US when home but not as risky as a Central American cab, walking in most places except perhaps Colon, swimming except perhaps in Australia, flying on any major airline although I wondered about some of the discount ones, eating in the first world but I got some carrots in Panama that I thought were gonna kill me.

You can run with exceedly low risk and I'll run with risky but worth it.