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Old 10-09-2013, 15:36   #61
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Re: 2013 Insurance Premiums

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Originally Posted by RainDog View Post
Greatly decreasing your risk does not yield any savings and insurance companies do not try to push boaters into reducing risk.

.......


Another example. My boat is well kept. The boat next to me is a derelict. The dock lines are undersized, badly UV damaged, and have no chafe protection. The upper shroud is broken off at the chainplate (years ago). The shore power cord is severely UV damaged. It is only a matter of time before this boat catches on fire or the mast falls on another boat. Any kind of serious wind will part the dock lines and set it adrift. Yet they pay the same rates as me.
Not quite. Our costs go down considerably when we move out of hurricane zones at particular times of year. Also, our choice of cruising grounds has a correlation to cost. So does laying the boat up for periods of time. So does the number of crew on long passages. There are many other risk reducing practices that lower our insurance bill.

Most insurance companies require regular surveys to maintain coverage. When claims are made, they send an adjuster/surveyor who looks for damage reasons that are outside of policy coverage. Broken shrouds, UV damage, damaged power connections, etc are such reasons to deny claims.

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Old 10-09-2013, 16:02   #62
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Re: 2013 Insurance Premiums

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Originally Posted by Gelfling View Post
Is everyone else seen these "across the board" insurance increases?
Any suggestions on insurance companies that I can contact for simple coastal navigation in US waters?
Is there an insurance provider that will cover just inside the Chesapeake? (I don't have any plans to cruise outside of it in the coming year)

Our insurance did go up this year, I think by approx. $75/year. And then I added hurricane haul-out coverage, for an additional $25/year.

If it helps at this late date, our marine insurance broker is IMIS on Kent Island. Ask for Al, Gary, Heather... and our specific policy is with New Hampshire Ins. Co. (I've had no claims, so can't comment further.) Our current specific cruising grounds are essentially the Chesapeake and Delaware Bays; we've occasionally added riders for the ocean, but usually at very nominal cost (and one year it was free).



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We have been with Lloyds through Blue Water Insurance for 10+ years. Boat is US documented but has lived much of the past 12 years in St Martin. No hurricane box, coverage everywhere (including Cuba, Haiti and Columbia), $160,000 agreed on hull value, coverage on dinghy, $500m liability. We had no increase at this years renewal $3800/yr.

Geez, that's more than twice our annual premium.



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OK, this is the last time I'll whack this dead horse, I promise ... Once again all you're saying is that there are some claims, and some of those are big. This does not address the risk of boating. It only highlights the potential impact of an event, while ignoring the probability of the event.

I've been following your debate, and I can certainly agree the risk of event is generally low. In our case, FWIW, it's the potential impact that rings my chimes. I just don't see a way we could -- without complete insurance -- come up with a 7-figure payout, which could happen to us unexpectedly. Example in point, last month three boats burned to the water line and one of those sunk in a marina just up the river from us. Eventually determined to be caused by something electrical on one of the three apparently well-kept boats. I'm supposing insurance on the boat "at fault" will be covering all the damages, but the environmental damages alone (let alone replacement in kind or whatever for the boats themselves) would be way more than we could contemplate. Do I always inspect our electrical systems? Sure. Do I see a great risk of electrical fire? No. Could I stand it if something like that happened anyway? No. So we buy insurance. No fear, no pressure, just playing poker -- in a way we think of as "as prudent as gambling allows."

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Old 10-09-2013, 16:43   #63
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Re: 2013 Insurance Premiums

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I've been following your debate, and I can certainly agree the risk of event is generally low. In our case, FWIW, it's the potential impact that rings my chimes. I just don't see a way we could -- without complete insurance -- come up with a 7-figure payout, which could happen to us unexpectedly. Example in point, last month three boats burned to the water line and one of those sunk in a marina just up the river from us. Eventually determined to be caused by something electrical on one of the three apparently well-kept boats. I'm supposing insurance on the boat "at fault" will be covering all the damages, but the environmental damages alone (let alone replacement in kind or whatever for the boats themselves) would be way more than we could contemplate. Do I always inspect our electrical systems? Sure. Do I see a great risk of electrical fire? No. Could I stand it if something like that happened anyway? No. So we buy insurance. No fear, no pressure, just playing poker -- in a way we think of as "as prudent as gambling allows."
And I'm perfectly happy with this Chris. You've thought it through, and decided the risk is worth mitigating through insurance. I might make a different determination, or I might not. The real point is that, more and more, the choice is being removed from us. Unless we stay out of marinas and never use any marine facilities, we increasingly have no real choice in the matter.

I really don't care two hoots if someone buys insurance or not. As I say, it's a risk assessment, and if you can't live with the risk (the real risk), then insurance is one way to mitigate it. In many (perhaps most) cases I bet it's not the best way, but it may be the easiest way. And perhaps that cuts to the real reason for the rise in marinas that demand insurance; it's the easiest solution.
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Old 10-09-2013, 17:13   #64
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Re: 2013 Insurance Premiums

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......
I've been following your debate, and I can certainly agree the risk of event is generally low. In our case, FWIW, it's the potential impact that rings my chimes. I just don't see a way we could -- without complete insurance -- come up with a 7-figure payout.....
Exactly, calculating risks is fine for the insurance company who will lay those over a pool of insured and be right most of the time. For an individual there is no averaging. Over a 10 year period there are two possible outcomes - an event occurred or it did not. It never occurs .01% of the time. There are very small risks that I am just willing to take on myself - space aliens sabotaging my boat and making it seem like it is my fault. For real risks like going up on a reef, getting hit by lightening, a boat fire, I look at what the impact on me would be for me. For all those mentioned, I elect to have insurance and pool the risk.
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Old 10-09-2013, 18:10   #65
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Another option, if you are willing to accept some risk, is to under insure the hull value. This reduces your risk and can reduce your premium significantly.
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Old 11-09-2013, 05:14   #66
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Ok, I'll throw out another perspective....

Insurance companies make profit, check.
Their profit expends on not paying out, check.
The payout is critical to those that have an accident, check.
You personal comfort with being insured is based on your aversion, or not, to risk, check.

Personally, I am risk averse and want insurance, I have actually had two claims in the last three years without insurance I would have been hurting.

What mike seems to be objecting to is the requirement (and cost) to have insurance.

This, I think, is driven not by the boat insurance agency, but by the legal and health care systems. In America, if you are in an accident, your fault or not, you can potentially face eye-popping legal and medical bills. The list is long, and real, of people's lives and dreams have been destroyed under the weight of paying these.

Insurance unfortunately, has to mirror the very real costs in America of a dysfunctional health care and legal system. You can see this in play when you are from another country and get insurance. Regardless of its type, premiums jump sharply when your vacation passes through America.
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Old 11-09-2013, 05:32   #67
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Re: 2013 Insurance Premiums

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Ok, I'll throw out another perspective....

Their profit expends on not paying out, check.

Ironically, it's almost the opposite. Being highly regulated, if they cut payouts dramatically, the regulators will demand rate cuts.

If a company averages $100million in payouts and implements a program that cuts payouts to $80million without gaining or losing a single policy, the insurance company is looking at a 20% loss of profitability.

The exception is one off major events (ie: huricane sandy). In the short term, that can hurt but again in the long term it allows them to justify raising rates and they can pad that with extra profit margin as the regulators are hesitant to do anything that will slow insurance payouts during an emergency.

On a side note: I was at a conference recently that covered driverless cars. In talking to a couple of insurance safety guys between meetings, the industry is scared to death of driverless cars but can't openly say anything about it. If it works as predicted, 95% of payouts will go away and destroy the industry. While good for society, it will drive most insurance companies out of buisness.
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Old 11-09-2013, 06:42   #68
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Originally Posted by vtsailguy View Post
Ok, I'll throw out another perspective....
Insurance companies make profit, check.
Their profit expends on not paying out, check.
Ironically the second line isn't correct. Profit margins in insurance are not that great because they manage the risk through premiums. Over time insurance companies simply adjust premiums in proportion to claims. It's very nearly a cost plus type of business. The more claims the higher the premiums and thus the higher the profit. We see this in auto insurance all the time. In the US the more heavily regulated a state is the more willing insurance companies are to approve payouts. More payout means higher rates approved by the insurance commission and higher industry profits. Some profit comes from investing the money held in reserve too. But in general, the more claims paid the higher the industry profit will be over the long run.
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Old 11-09-2013, 06:52   #69
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Re: 2013 Insurance Premiums

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Originally Posted by vtsailguy View Post
Personally, I am risk averse and want insurance, I have actually had two claims in the last three years without insurance I would have been hurting.

This, I think, is driven not by the boat insurance agency, but by the legal and health care systems. In America, if you are in an accident, your fault or not, you can potentially face eye-popping legal and medical bills. The list is long, and real, of people's lives and dreams have been destroyed under the weight of paying these.
Thanks vtsailguy, I think your observations regarding the American situation is probably correct. From an outsider's perspective, it seems the adversarial (and opportunistic) legal system in the US is sometimes a substitute for the social welfare systems found in most other OECD countries. However, I would not let the insurance industry completely off the hook. The industry feeds your fear by focusing on impacts. Ads for insurance parallel those of casinos or lotteries; they focus on the rare events, and not the far more likely outcomes.

And why wouldn't they? It makes perfect sense for the insurance industry to do this. If people chose insurance based on the odds, rather than the impacts, then there would be far fewer clients.

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What mike seems to be objecting to is the requirement (and cost) to have insurance.
My objections are three-fold.

#1. Is the irrational way we are encouraged to make these decisions. Instead of providing real information about probabilities and actual risk, the industry focuses on the rare negative impacts. If we were to look at the actual risks associated with boating, and compare them to many of our daily actives, many more people may decide to simply accept the risk.

#2. Is the fact that insurance is becoming mandatory (either legally or functionally) in more and more areas of our lives. What choice we may have had to think for ourselves is being removed. If insurance is a public good, then it should be removed from for-profit businesses and made into a non-for-profit system (much like most OECD public health care systems, for example).

#3. Is the cost, especially when it is coupled with #2. If the cost were nominal, then the cost-benefit analysis is trivial. From the costs I've seen quoted here by many CFers, the price of insurance is rarely low (unless you have a big claim), and almost never seems to go down. Since money is rarely infinite for any of us, this cash be better spent on actually improving the boats. In the vast majority of cases, it could be a better way to reduce real risk.
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Old 11-09-2013, 07:59   #70
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Re: 2013 Insurance Premiums

This from the Insurance Information Institute, an industry body supported by insurance companies:

QUOTE:

RECREATIONAL BOATING ACCIDENT AND THEFTS

"Federal law requires owners of recreational boats to register them. In 2012 there were 12.1 million registered boats, down from 12.9 million in 2007. An accident occurring on a recreational boat must be reported to the Coast Guard if a person dies or is injured and requires medical treatment beyond first aid, if damage to the boat or other property exceeds $2,000, if the boat is lost or if a person disappears from the boat. Out of the 4,515 accidents reported in 2012."
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Old 11-09-2013, 09:02   #71
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But is hurricane damage to unoccupied boats an "accident" that must be reported? If so, then Sandy will skew these numbers quite a lot I would think. But I'm guessing the Coast Guard doesn't collect reports on hurricane damage. Does anyone know for sure?
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Old 11-09-2013, 09:42   #72
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Re: 2013 Insurance Premiums

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Pau Hana, I don't have a dog in this fight but Mike has asked a couple times for your "payout to policy ratio" and you keep ignoring the question. Does that smell funny to anyone else? To me, it is suspect at best.
Shouldn't be suspect, Jim- as in any business, some info is for public consumption, and some is not. I have no problem releasing info about my personal policy, but details of P&L (size of our book of business vs claims ratio) is privileged info.

As mentioned earlier, the loss ratio is small.
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Old 11-09-2013, 10:05   #73
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Re: 2013 Insurance Premiums

Back to the original question....

We finished a 33 month cruise from San Francisco to Florida this past May and bought a home in Southwest Florida.

While cruising our insurance rate was $2600 a year for $365k coverage with a stipulation we be above 30.5N from July1 to Nov 1 on the Caribbean side.

We notified the insurance company that we were living in South Florida and the boat would be kept at our dock behind the house. As a result the policy went up to $5100 per year for the same coverage.

I was a little bit shocked, but Markel did some comparisons and couldn't find anything cheaper...
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Old 11-09-2013, 10:06   #74
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Re: 2013 Insurance Premiums

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But is hurricane damage to unoccupied boats an "accident" that must be reported? If so, then Sandy will skew these numbers quite a lot I would think. But I'm guessing the Coast Guard doesn't collect reports on hurricane damage. Does anyone know for sure?
Good question. It would seem the definition covers this, but it is unclear. Sandy would certainly skew the numbers, although only for that one year.

Pau Hana, can you answer?
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Old 11-09-2013, 13:00   #75
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Re: 2013 Insurance Premiums

According to the USCG: Recreational Boats are required to report the below listed accidents or casualties to their local state authorities.

A person dies
A person disappears from the vessel under circumstances that indicate death or injury
A person is injured and requires medical treatment beyond first aid
Damage to vessels and other property totals $2,000 (lower amounts in some states and territories) or more
The boat is destroyed

Accident Reporting

All this changes if the vessel is operated by a USCG Licensed person and/or the vessel is subject to USCG Inspection....

Under those circumstance the Captain would be required to notify the USCG
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