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Old 13-07-2016, 06:21   #1
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Why is it so?

Doing a bit of a budget on insurance and got a ball park quote on a $400K yacht (i'm hopeful)
The insurer said Australian waters approx $2-3K per year.
Med area approx $5K year.
Crossing the Atlantic $6K per year.
Crossing the Pacific $8K per year.
So it seems the ocean is a riskier place.
I was under the impression being close to land was the risky part??
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Old 13-07-2016, 07:01   #2
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Re: Why is it so?

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I was under the impression being close to land was the risky part??

Apparently not, you have to be careful with statistics, for example apparently majority of automobile accidents happen close to home, so being close to home is dangerous, right?
Well the other half of the story is that the vast majority of driving is done close to home, so therefore it stands to reason that is where most accidents occur.

I'd say that three weeks crossing the Pacific is more dangerous that three weeks Coastal cruising, seems a little more obvious when you think of it that way?
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Old 13-07-2016, 07:12   #3
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Re: Why is it so?

Being offshore and in trouble can mean that the boat can't be saved as easily. The closer you are to shore the higher chance the boat can towed in or stabilized so that damage doesn't continue. I would think that is part of the equation.
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Old 13-07-2016, 10:27   #4
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Re: Why is it so?

Insurance pricing also includes what the repair costs would be. There are very few places where repairs can be properly done in the SP. Hit a reef in the eastern Tuamotus, the costs to an insurance company to recover, tow, haul and bring in repair materal is way high. So high that many claims are write offs.
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Old 13-07-2016, 17:20   #5
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Re: Why is it so?

Balance,

I think you're right, but insurance companies need to pay dividends to their stockholders, and from that, all else follows.

I think you're far safer at sea than coastally, as well, but who makes the rules have a faith that you are safer near land. Now, it's true that there are islands and rocks out at sea, but those are well charted, and pretty easy to stay away from.

Mate, it's just how the world is!

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Old 13-07-2016, 18:11   #6
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Re: Why is it so?

Ann, that's true for you and Jim, but insurance companies don't insure you, they insure the average of their (and other company's) experience. They then charge a bit more than that experience (actuarial table) suggests to make a profit over several thousand policies. You're safer out there, but Joe Blow average cruiser (including the people on this forum who may not take the freely and considerately given advice that they not do what they propose with their level of experience) are not, so you pay for them. At least my company reads my log summary before deciding what to charge me for an adventure that stretches my envelope.
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Old 13-07-2016, 19:47   #7
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Re: Why is it so?

No matter your experience, the cost of repairing damage is much higher in areas where there are no facilities. A lightning strike in the Marquesas much more expensive to repair than in Florida.
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Old 13-07-2016, 19:50   #8
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Re: Why is it so?

My policy has a 200nm from shore geographical limit which appears to favour the cost of recovery hypothesis. Also, car hire companies in Australia have geographical limits for going inland, probably for the same reason.
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Old 14-07-2016, 19:19   #9
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Re: Why is it so?

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Ann, that's true for you and Jim, but insurance companies don't insure you, they insure the average of their (and other company's) experience. They then charge a bit more than that experience (actuarial table) suggests to make a profit over several thousand policies. You're safer out there, but Joe Blow average cruiser (including the people on this forum who may not take the freely and considerately given advice that they not do what they propose with their level of experience) are not, so you pay for them. At least my company reads my log summary before deciding what to charge me for an adventure that stretches my envelope.
That's actually quite reasonable, isn't it, them trying to factor in experience?

It's still not the whole thing, though, 'cause the 20 mi or so offshore is still less likely to produce claims than the close inshore.

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Old 14-07-2016, 19:39   #10
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Re: Why is it so?

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My policy has a 200nm from shore geographical limit which appears to favour the cost of recovery hypothesis. Also, car hire companies in Australia have geographical limits for going inland, probably for the same reason.
You'll probably find the 200nm takes you to the edge of the Australia's Exclusive Economic Zone. Any further and you're unambiguously in international waters. Some insurance policies limit you to a lot less distance offshore. IIRC I've had policies where the distance was limited to 60nm and others at 100nm.
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Old 14-07-2016, 21:27   #11
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Re: Why is it so?

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You'll probably find the 200nm takes you to the edge of the Australia's Exclusive Economic Zone. Any further and you're unambiguously in international waters. Some insurance policies limit you to a lot less distance offshore. IIRC I've had policies where the distance was limited to 60nm and others at 100nm.
Possibly, could be related to the limit of jurisdiction as perceived by the courts before they wander into the minefield of extraterritoriality.

I did insurance investigation for oilwell blowouts and the policy wording defined the end of an incident as when the flow ceased. Since the flow could cease but troublesome pressures, which needed to be handled and could be more troublesome than the original problem, often persisted it caused no end of bad relations when the insured became aware that all the costs related to the incident were not claimable.

My policy limits me to 24 hours single handing which could cause me problems as I will sometimes heave-to overnight rather than go into a strange harbour or anchorage in adverse conditions on dusk and this could take me over the 24 hour limit.
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