Buying insurance worth it?

[hellosailor]

"Save a million dollars...hmmm."
That's what I thought. I mean, even if I moved under a bridge, I couldn't sock away 100k per year for ten years, and ten years out is a bit to worry about insurance stuff. Then I realized, the OP could easily be in the drug import business. where socking away a quarter million or so every year was pocket change. So, sure, he could be for real. And able to put away a million dollars with no previous experience of financial risk and such.
Works for me.

[goodoldwoody]

Hi All

I can't help but comment as there are so many comments already.
I have comprehensive insurance here in Aust.
Because it's only slightly dearer than Third Party (Liability insurance).
You usually need to be insured to use a marina. (Imagine setting fire to a marina if you had no insurance)!
You need insurance if you race!

We have thousands of uninsured boats on moorings around Sydney which break off their unserviced apparatus every time there's a bit of a blow. They do millions of dollars of damage to other boats and if you can't provide a whitness you can't sue the owner. That's if you could find them. Even if the other boat is still tangled in your rigging there seems to be no grounds. They seem to get away with it.
See photo below of local mooring that caused around $150K damage. The owner got off, just walked away! How often?

Plus even if you are insured you still need a really good anchor!

Good one.
Happy cruising
Woody

[CarlF]

Insurance companies that compete for the $1 million yacht business rarely argue about a claim. It’s a small market where reputation counts more than price. And surprisigly, the price from a top company is not much more than the cut rate guys.

And in many cases the insurance company is doing more than sending you a check

Most liability claims don’t go to court. Your insurance company negotiates a settlement with the other side and pays for the lawyers. You really don’t want to do this yourself.

If you get towed off a rock there will likely be a salvage claim filed in admiralty court, for up to 100% of the boat’s value. The insurance company knows how to negotiate it down - you probably don’t.

If some diesel fuel escapes while you were on the rock, the insurance company will also argue with all the governmental agencies (federal, state, local) about the penalties.

If you need repairs, a good adjuster will make sure the boat yard does good work at a fair price. Boat yards like to do insurance jobs and are careful to keep a good reputation with the local adjusters.

[billknny]

Originally Posted by goat

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

Both marinas I used in San Francisco Bay required hull insurance. So it does happen...

[akprb]

Academic question.

Saving 1 million in say 10 years AND annual operating/maintenance/cruising expenses, nil.

A person in that position who has invested a decade to get there protects it, even if they “are careful of reefs and stuff.”

Someone with a 15-20m net worth? Maybe not. That wasn’t the question.

;-)

[akprb]

Academic question.

Saving 1 million in say 10 years AND annual operating/maintenance/cruising expenses, nil.

A person in that position who has invested a decade to get there protects it, even if they “are careful of reefs and stuff.”

Someone with a 15-20m net worth? Maybe not. That wasn’t the question.

;-)

[jmschmidt]

If you don't care about hull coverage, liability coverage only is relatively cheap and usually required by many countries where you might like to cruise and by most marinas where you might like to hang out. .

[Mike OReilly]

Originally Posted by jmschmidt

If you don't care about hull coverage, liability coverage only is relatively cheap and usually required by many countries where you might like to cruise and by most marinas where you might like to hang out. .

Which countries JM? I’ve heard this before, but never seen a list. Certainly not required in Canada/USA. Not sure about Mexico, but I don’t think it’s a legal requirement. Never heard of it needed in Caribbean countries.

Is it European countries? Or SA countries?

[JPA Cate]

I'm sure it's true of Italy, and I suspect, of France. Our first time ever we purchased liability insurance, it was for a short term, long enough for an off-season cyclone to scarper off from New Caledonia, part of French Outre-mer.

Ann

[IslandHopper]

On insurance here in Australia/Queensland, Bundaberg Port Marina are no longer accepting Northernreef/Edward William insurance, a number of boats that live here have been told to change insurers when renewal time comes. I have been told a number of other marinas up and down the Queensland coast have taken the same stance...

If travelling to Aus/Queensland and you have Northernreef/Edward William insurance i would check ahead to be sure, Northernreef/Edward William are well aware of the situation so you can check with them also...

[valhalla360]

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.

We only keep the basic liability on the truck and self insure for the truck itself. Of course, the truck only cost us $6k and we could easily buy another one at twice that price without significantly impacting our lifestyle.

Loss of a $100k boat (let alone a $1mil boat) would be a major hit to our lifestyle. Now if you are worth $50mil, self insuring for the boat itself can be an option as you are probably netting $3-5mil per year on average from your investments and could easily absorb the loss.

Given the way the question was phrased, I seriously doubt, you will be in a financial position to self insure the boat or you wouldn't be asking the question the way you did. People worth many millions already understand how insurance works.

Circling back:
- Just because you are that special really good sailor who would never run up on a reef...doesn't mean someone won't run a bow sprit thru the side of your boat and have zero cash to pay for the repairs (I could come up with many other examples where your skill and conservative approach won't save the boat)
- The only stories I've hear where people don't get paid, they didn't take the time to understand what they were buying. The obvious example is if you are in a hurricane zone during hurricane season and you don't have hurricane zone coverage...it's all clearly spelled out in the contract. That's not the insurance company taking advantage, that's you not taking the time to fully understand the contract. Sometimes insurance isn't as quick to pay as you would like and sometimes you have to argue but if you are covered, insurance companies pay out.
- As others have mentioned, the secondary benefits are often very significant as they know the legal process and can do a much better job negotiating a solution.

[goat]

Originally Posted by Mike OReilly

Which countries JM? I’ve heard this before, but never seen a list. Certainly not required in Canada/USA. Not sure about Mexico, but I don’t think it’s a legal requirement. Never heard of it needed in Caribbean countries.

Is it European countries? Or SA countries?

Mexico requires liability insurance in all marinas I've been in. Fortunately (or unfortunately) they require a Mexican insurance company to provide it. It's very reasonably priced and you can purchase it online.

goat

[goat]

Originally Posted by billknny

Both marinas I used in San Francisco Bay required hull insurance. So it does happen...

Very strange indeed. I can't get hull insurance as a single hander that goes offshore. I guess I'll have to avoid San Francisco. Not too big of a deal as I avoid places outside of the tropics anyway.

goat

[valhalla360]

Originally Posted by goat

Very strange indeed. I can't get hull insurance as a single hander that goes offshore. I guess I'll have to avoid San Francisco. Not too big of a deal as I avoid places outside of the tropics anyway.

goat

Not that strange. The insurance company likely assumes you are an unacceptable risk while single handing offshore. It may be right or wrong but they aren't obligated to take that risk.

Not really any different from them to refusing to give you car insurance if you are the listed driver but don't have a drivers license. You may be a world class rally driver but if you can't come up with a valid drivers license, they will likely turn you down.

Of course, boats are a little more complicated as you may be able to get local waters insurance while single handing that only covers you within X miles of shore, so the offshore part may have nothing to do with your ability to get insurance in San Fran (or maybe it does...I have no idea since I don't single hand)

[Capt Jerry]

As an attorney who has sued insurance companies over policy provisions and also worked for insurance companies, I can tell you they are not all the same. Some companies (and claims handlers) will go out of their way to make sure a claim is handled properly and the policy holder is happy. Others, not so much. If you can, check out real customer reviews, they can be eye-opening. Also, beware of the cheapest policy out there. Finally, get a good agent. Someone familiar with marine policies can be invaluable.