Liability only or full coverage

[Mike OReilly]

Originally Posted by atlroofman

Thats a good question . What percentage of your net worth IS a (significant)
portion.
And what portion of your net worth should you spend on a livaboard cruiser? I know it will very a lot.

Obviously this is a purely personal question, but one thing to realize is that despite all the horror stories, the accident rates with cruising-level boats are very small. So the real risk is generally pretty small.

… although perhaps the recent spat of nasty hurricanes will start changing this equation, at least over on the east coast.

[valhalla360]

It's largely a math question:
- If you have a boat worth $250k (and the insurance agrees they would pay out $250k in a loss), paying $2500/yr for full coverage can make sense.
- If you have a boat that would totaled result in a $5k payout and you are paying $2000/yr, it probably doesn't make much sense. Better to bank that money and just pay for a new boat if you total it. (they won't be paying even minor repairs as it's cheaper and easier for them to total it).

What you do need to do is sit down with your insurance agent and have them confirm what the real payout would be. If you have a $250k policy but the adjuster says it was only worth $100k, the exact language will be critical. Most policies will only pay out the actual value ($100k). You ca get an agreed value ($250k) policy where they will pay out $250k but it can cost significantly more and they refuse if you ask for too high of a value.

[Mike OReilly]

Originally Posted by valhalla360

It's largely a math question:
- If you have a boat worth $250k (and the insurance agrees they would pay out $250k in a loss), paying $2500/yr for full coverage can make sense.
- If you have a boat that would totaled result in a $5k payout and you are paying $2000/yr, it probably doesn't make much sense. Better to bank that money and just pay for a new boat if you total it. (they won't be paying even minor repairs as it's cheaper and easier for them to total it).

Yes, but I would add it should be both a cost-benefit analysis (as you’ve stated here) along with a risk assessment. It can still be a poor choice to spend $2500/yr to mitigate a risk that is well below one’s threshold of tolerance, regardless of the potential payout.

[barnakiel]

Unfortunately, liability only.


Full cover offers too expensive for us. The offers are made for big boats and our sub standard craft is 'below their profitability threshold'. Whatever they meant by that.


b.

[sailorboy1]

poll says only 18 people even have insurance

I have full insurance, but that may change next year depending on the cost for it in the caribbean. On other hand I may renew current and be covered part of year and not the rest.

Only I can decide based on the cost and my risk tolerance

[Hudson Force]

I shifted to liability only after the 2004 hurricane season in Florida when my rates for full hull coverage jumped to an annual premium of 8% of my old boat's book value.

[TrentePieds]

BobHorn:

Do understand that "insurance" is a bet - a wager, no more, no less. You bet with someone (the underwriter) that during some specified length of time, a year usually, you WILL have something happen to you that is specified under the "coverages" of the policy. The underwriter bets that no such thing will happen to you.

So whether you enter into the bet depends on how much ready cash you are willing to hazard on the odds that something WILL happen to you. That in turn must depend on your personal economic strength. Remember that, as always, the people that have the greatest need of insurance are the people that can least afford it.

So for a benchmark consider this: For a standard yacht policy with a declared hull value ("Replacement value") of Can$39K, valid in the Salish Sea and having both Liability and "Own Damage" coverage, I pay Can$730 a year, and I pay it gladly. First year in this boat I had a "no start" in an awkward place and had to call for help. Remediation necessitated a 20NM tow in addition to work on the engine. The bill was Can$1,200 appr. and the underwriter paid up promptly, i.e. I won the bet that year, and then some!

Liability is absolutely imperative because it covers damage you may do to OTHER people's property, and for instance in a sinking involving fuel contamination of the location, the clean-up cost would ruin most of us if it were not covered by insurance.

Hull Insurance, on the other hand, covers damage you may do to your own property and whether you carry Hull Insurance must therefore depend on how much of a betting man you are. We can't really help you much in determining that.

Just what "coverages" and "exclusions" are stated in the "wordings" of your policy defines just what it is you are making bets about. Policies vary from location to location because of different locations having different risk regimes. Only your broker can answer questions about that, and only you can answer questions about how much you are willing to bet.

TrentePieds

[tarian]

Full insurance , the boat is a large net worth to me and the family and to lose it I would not afford another one,
Got insurance on a 1979 boat no problems so to some on here with older boats look around,
Full cover also protects my outboard and dinghy, and electronics, my last outboard got stolen and it was worth $3000 and I was only on liability at the time , lesson learnt.
My insurance cover for the year is less than $800 so if my outboard , my dinggy my electronics go , then to me it is a no brainer.
We only need insurance when the **** hits the fan , and trust me it will some day , eveen to those that give their blood to neptune .
Yup there will be some on here that have sailed for 25 years and no issues and then there will be some that will tell you thankgod for insurance.
you roll the dice you hope for the best .

[Greg K]

Liability only, which is compulsory here in the EU. Cost is 63 euros annually. No insurance company here would offer comprehensive coverage ( not that I want it) on the basis that my boat is too old. The boat is a 1983 Shannon 28, and is stronger, better built and in better condition than mass manufactured cookie cutters 30 years younger which have no problem getting full coverage.


Why would I support any business that makes such poor decisions? Better to put the money into ground tackle, maintenance and navigation equipment than pay a premium which ends up going to owners of poorly made boats improperly handled.


Greg

[tarian]

Originally Posted by Greg K

Liability only, which is compulsory here in the EU. Cost is 63 euros annually. No insurance company here would offer comprehensive coverage ( not that I want it) on the basis that my boat is too old. The boat is a 1983 Shannon 28, and is stronger, better built and in better condition than mass manufactured cookie cutters 30 years younger which have no problem getting full coverage.


Why would I support any business that makes such poor decisions? Better to put the money into ground tackle, maintenance and navigation equipment than pay a premium which ends up going to owners of poorly made boats improperly handled.


Greg

Now thats worth a poke

[Mike OReilly]

It’s interesting how some people report not being able to get insurance for older boats, while others of us have never had a problem. My boat was built in 1977. My previous boat dated back to 1974. I’ve never had any problems getting insurance here in Canada. It has never been an issue.

What gives? What’s the reason for the difference? Is it location-based? If so, which locations?

[newhaul]

Originally Posted by Mike OReilly

It’s interesting how some people report not being able to get insurance for older boats, while others of us have never had a problem. My boat was built in 1977. My previous boat dated back to 1974. I’ve never had any problems getting insurance here in Canada. It has never been an issue.

What gives? What’s the reason for the difference? Is it location-based? If so, which locations?

its shopping around I find this issue all the time about half of the insurance companies won't cover even liability only on my defender . 1963. I suppose its due to how they are built. I know mine is a tank and won't suffer much if I hit a new benahuntalina but they will suffer a lot of damage from the contact.

[Paul L]

Originally Posted by Mike OReilly

Obviously this is a purely personal question, but one thing to realize is that despite all the horror stories, the accident rates with cruising-level boats are very small. So the real risk is generally pretty small.

… although perhaps the recent spat of nasty hurricanes will start changing this equation, at least over on the east coast.

Your preception of the risks to cruising boats is probably slanted a lot by the boats you know in your cruising area. We've been out cruising for a fair long time now over a large geographic area and have seen or know of friends who have put boats on reefs, hit rocks, lost rigs, abandoned boats offshore, had damaging knockdowns and that doesn't cover the many high damage lightning hits. Is cruising pretty safe - certainly. Unlike the accident reports you read on CF where the stream of responses explaining what the people did wrong with the underlying message that the writer would never do this so it wouldn't happen to them, when you know the people that these incidents happened to you realize that it is more of a But by the grace of god go I thing that it hasn't happened to you. Are these real risks that are often worth paying an insurance company to take on for you? That's up to each individual.

As far the posts about having to have liability but not needing full coverage, I don't see a big distinction between the two. They both cover potential financial risks that you can choose to offload onto an insurance company or not. Personal choice.

[Mike OReilly]

Originally Posted by Paul L

Your preception of the risks to cruising boats is probably slanted a lot by the boats you know in your cruising area. ...

Actually, my perception is solely based on actual data on accident rates. I don’t put much stock in anecdotal evidence, mine included.

[TrentePieds]

@ Mike O'Reilly, #26

Difficult to say just why there are these differences in "shopping" experience. It is clearly location driven to some degree. As I said, my policy covers in the Salish Sea, but were I to go out onto the Swiftsure and turn left, my coverage would cease because the RISK REGIME would be different. The risk of loss, and therefore of a claim, would be greater than it is while I'm hiding behind Vancouver Island. That's just the terms on which the Underwriter and I made our wager.

I get my insurance through my broker that I've used for years for my other insurances. Never a claim against my residential insurance, and over 60 years of claims-free driving in a major urban area. My marine underwriter knows that because my agent has told him so, and relying on that statement having been made in the "utmost good faith" that is the cornerstone of the insurance industry, he has considered those facts and they are reflected not in the amount of premium payable, i.e. in the odds of the wager, but in whether the underwriter will make the wager at all, i.e. in whether he will issue a policy.

Let's not forget that when you walk into a broker's office, you are saying: "D'ye know anyone who wants to bet with me?". Broker's job is to "shop" your offer to make a bet. Underwriter, the other party to the wager, is QUITE free to turn you down if he doesn't like the tie you are wearing, or if you have your baseball cap on back to front! And what's more - the broker is expected to do that part of the job for him.

TP