Buying insurance worth it?

[Red Sky]

Save a million dollars...hmmm.

[danielamartindm]

I want to find the marine insurance analog of Obamacare- so that I can wait to buy it until AFTER I have a problem. Do they have emergency rooms for yachts?

[thomasthetank]

I think having liability insurance is important. I have liability insurance on my cars and it is drastically less expensive than having full coverage.

I have not researched the insurance for boats but I imagine that liability is much less expensive than having full coverage?

How do insurance claims even work outside the United States?

I just have a feeling the insuranc company will try to screw me out of payment in the event my boat is destroyed even after paying them for many years.

Or they will take several years to pay out and aggressively try to avoid it and force me to jump through hoops to get them to pay out.

It is easier to just eat the cost and either buy a new boat or just abandon sailing and go back to the mainland. It would be unfortunate, but less stressful than fighting an insurance company for years.

[goat]

Everything I own is on my boat, so if it was ever lost for any reason, all my problems would be gone.

I'm in about $60,000 total and keep that much in the bank in case I need to buy another one.

I carry liability.

Bottom line if you can afford the loss, don't worry about insurance. If you can't, check which insurance companies came through after all those hurricanes hit the GOM last year and go with a good one.

goat

[thomasthetank]

Cheers to that.

Tons of sailboats were lost in BVI. I can just imagine the insurance inspectors finding as many loopholes as they can to avoid paying out.

Obviously I would be more careful if I had no insurance and not keep my boat in Tortola for hurricane season..

As far as liability insurance goes. How does that even work outside the United states? Could I still be sued in a foreign court even if I carry liability insurance?

would be interested in hearing from anyone who lost a boat in BVI during the recent hurricane and had insurance pay for it, or not pay...

[DotDun]

No boat in BVI, but I've never had a claim denied, be it boat, car, or house. I've actually profited on most claims doing some repairs myself.

I would guess if you are within the cruising area defined in your policy, the liability coverage would work the same in every country. If your cruising area includes the US, you may think about an umbrella policy to extend liability coverage to an amount at least equal to your net worth.

[JPA Cate]

Originally Posted by thomasthetank

I do the same thing with my cars, I have just liability insurance since I can use the other one if my main one is out of commission.

I do not plan to buy two million dollar sailboats, but if my sailboat is destroyed I would have to go back to the mainland and take a job. But if I had full coverage I could get a new sailboat and keep sailing.

Hello Thomas,

In the case above, you would have to consider how onerous, after taking up a cruising lifestyle for a few years, going back to "the mainland" and taking "a job" would be for you. Jim tried consulting for a while after he retired, and the longer we cruised, the less he seemed to like it. He made only 2 consulting trips back to the States.

Also, for info on my personal perspective (which of course may not apply to you), we sailed with no insurance for about 18 yrs., and since then have carried liability only. Instead of paying insurance premiums, we invested in refrigeration and radar, and bigger, better anchors, which increased comfort and decreased risk to ourselves and the boat. During that time, we suffered a dismasting, with some additional damage to hull, bow pulpit, stanchions and lifelines. When all was said and done, and all the standing and running rigging replaced, and the radar, and some antennas, we were ahead: what we paid out had not come equal to what our premiums would have been. It was a big hit at the time. Except, when we left, you couldn't buy insurance for crossing oceans for just two people. That didn't become available for a few years, and by then, we were used to cruising without insurance.

If all a person has is tied up in his boat, he or she is taking a fair risk anyway, because eventually one ages and is less capable as a sailor. And that's sort of starting at 100% risk, whether the investment is small or large, so I don't know that the $ value of the boat is even relevant, except to you. Something, is bothering you.

Sure, the job of the insurance company is to make a profit for the stockholders, and buying insurance is a bit like betting against your own skills, and you might have to jump through some hoops to get a pay out that you deserved, but if the unthinkable happened, would you rather have the start up money again or not?

There will be a lot of pressure on you from people who will write that you MUST have insurance, but afaik, only liability ins. is required in most (if not all) countries. Therefore, you are still on the horns of your dilemma.

I really don't think a forum can decide this one for you because how much financial risk you want to incur is a very personal thing.

Ann

[Dave Lochner]

The insurance discussion seems to happen with some regularity here.

One aspect seldom mentioned is the convenience of having insurance. When there is a problem, a good insurance company will help solve it. A few years back 2 boats broke free of their moorings, went up on some rocks and sank. One boat had a good insurance policy that specialized in yachts the other didn't. The one with a good policy arranged for salvage, the other simply said file a claim.

If another should damage your boat and you only have liability, your insurance company will likely do little to help you out. On the other hand, with hull insurance your company may pay for the damage and have you subrogate the claim. Their attorneys will chase after the other guy with their expensive lawyers. Without the insurance you have to chase after the other guy.

[EllesBelles]

There’s a whole other consideration too which is that you will have to have and show proof of insurance to bring your boat into most marinas and boatyards. Surely you’re going to want to haul your boat out periodically for new bottom paint and maintenance that you can only do in a boatyard- under waterline thru-hull maintenance, etc. And won’t you want the option to bring your boat into marinas now and then?

[goat]

You don't need hull insurance, just liability insurance for any marina I've been in.

[Dave22q]

I find BoatUS full coverage works well for me. Compared to most boat maintainance and add ons, insurance is cheap.

[foufou]

I have insurance. Had a fire that the insurance company said totaled the boat. It was a battle to get them to pay the full amount bug they did. And sold me back my boat for $1. Get insurance from a reputable company. And be prepared to argue. With help if need be

[kas_1611]

Ask yourself this

"Can I afford the cost of being sued if I hit someone else's boat?"

Trust me the cost of 3rd party liability insurance is nothing compared to having everything you have ever worked for taken from you for the sake of a few pennies in the pound. And many, if not all marinas will require insurance. Some countries even require it when you clear in. Italy recently asked me for my insurance certificate.

Would you drive a million dollar car down the highway without insurance? Would you have a million dollar home without insurance?

Insurance companies only refuse to pay out if you have been stupid enough to lie to them or not tell them everything when you take out the policy. The only thing you have to worry about is being double insured as they will then split the payout and charge you multiple excesses.

Get the damn insurance cheapskate

[Mike OReilly]

When considering insurance the FIRST question is not: “Can I afford to loose $X.” The question you first need to answer is: "What is the real risk involved in the activity?”

After you have assessed the real risk, which for most cruisers is very small, you can then balance this against your personal capacity for risk; your tolerance for risk. This is where you ask, “Can I afford to loose this boat?”

Once you’ve matched your risk level with your risk tolerance, then you apply a cost-benefit analysis to come up with your personal Right Answer.

Everyone is different in their capacity to live with risk, and how they measure the cost-benefit. Some of us are willing to accept a higher risk, some a low. Some will have greater financial resources, some lesser. This is why there is no single right answer for everyone.

Liability is usually considered a good deal b/c it is so cheap. It’s cheap b/c the real risk (for the insurance company) is small. It’s also becoming a defacto legal requirement in North America as more marinas are demanding it as the price of entry.

[akprb]

Well you won’t be docking in marinas without at least liability.

If you are “saving” for your million dollar cat (and the 50k-75k to maintain, operate and cruise) that seems a pretty large commitment to put at risk.

If your net worth is 10 million going into it not so much.

I would argue an individual who attains a degree of wealth might ask this question differently, it does sound a bit.........hum. You know ;-)

Side note I had a claim recently that was paid promptly by BoatUS, no complaints. Glad I had it, would have been a 25k hit. Policy is around 2,200/yr.