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Old 20-03-2020, 12:17   #61
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Re: Cruisers Forum Insurance ?

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Great! See, there's the information other CFers can use.

Simi, which pantaneius office is that through? I infer from many comments here that the US arm operates differently than the European.
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Old 22-03-2020, 06:56   #62
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Re: Cruisers Forum Insurance ?

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My harbor requires a policy with liability of $100K/$300k liability. In addition I have a $20k policy on my boatand had a claim for the full amount ten years ago when I had a boat fire while I was not aboard. After a bit of a battle I got a check for the full amount of the policy. My bill for a year is $396!
i have shopped it around and not come close to this deal. Am I the only one who has found the right insurance? Foufou

I have a 500K policy in SF Bay and a few years back incurred a 25K loss in a racing incident. I held my breath waiting for a cancellation notice or a substantial premium increase. Pleasantly surprised that Allstate still insures me for $372/yr.
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Old 23-03-2020, 09:56   #63
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Re: Cruisers Forum Insurance ?

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Because we know more about boat values and actuarial concerns than the insurance companies?


I don't think so.
I agree. I am a retired executive of a non profit insurance operation. There is a common feeling that insurance companies are scam operations with highly paid executives who cheat folks for corporate profit when they hv a claim. They may have some highly paid executives in some operations, but the real problem is that insurance is mostly about predicting and sharing real risks (not just careless folks or scamming customers trying to upgrade or dump a boat) over a population of customers. It is science and a marketplace issue to make it work. Folks who are undertaking risky ventures are more likely to want more insurance but having affordable insurance rates relies on spreading the costs of a few unlucky or careless folks over the premiums of many customers who are careful and don't go out much. So most folks think rates are too high. Until they have a claim. Associations for the purpose of obtaining insurance are illegal in most states because they are generally not viable--in the insurance business association plans generally fail in a process called a "death spiral" of claims causing higher premiums, causing fewer folks to participate in buying and sharing the risk, followed by still higher premiums, etc. until the enterprise goes out of business in bankruptcy. Liability insurance is cheap. I bought some very expensive insurance for a two year cruise through Central America--the insurance company could not really know the risks I was taking. They just had to gamble that I had an interest in getting back and they would have written off my boat $75K if I had had much of any damage in a foreign port. If I was doing it again, I would have only bought liability coverage as I paid about $4K a year.
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Old 23-03-2020, 10:17   #64
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Re: Cruisers Forum Insurance ?

I've read through this entire thread, and found several posts worth replying to--but didn't quote them.


* First, a boat, insured or otherwise, breaking free and hitting your boat, doesn't pay. It's called "act of God" and he isn't liable. It's the same as your tree falling on your neighbor's roof -- his insurance pays. A buddy of mine was one of a half dozen or so boats that broke free in a freak storm at his marina, and his insurance wouldn't pay the damage to the boat he hit. Not because they were jerks -- but because they only cover damage he is liable for, and he wasn't liable.


* Consequential damage is a HUGE issue, and was one of a very small number of "deciding factors" as I selected my insurance for this boat. I had insurance through USAA a few years back, and left because it didn't have consequential damage. The issue is that if an item isn't "fit for service," it's not covered (and shouldn't be). A consequential damage exclusion also won't cover any following damage. I can't imagine a sinking or dismasting that doesn't start with something not "fit for service." A corroded through hull or chainplate, a worn hose, etc. BoatUS is the only company I found that doesn't specifically exclude consequential damage.


* When it comes to cost, remember that in insurance, "the house always wins." They will bring in more in premiums than they pay out. Or go broke. So, at the end of your life, you are probably going to pay more in insurance premiums than you ever got back. If you can afford the risk, don't buy insurance. Sure, a $20K car wreck hurts, but can you absolutely, positively, pull it out of your investments? If so, you are playing a losing game by insuring it! Liability is a different story -- the "maximum loss" is sort of an unknown, and far higher than most of us could write a check for.



* I do know of at least one major insurance company that is a true mutual insurance company, with no share holders and no profit (well, no profit that is distributed outside the pool of insureds). USAA. They make it work -- but they are HUGE and have the resources to cover the losses. Although, like BoatUS, they gave up on mutual insurance on boats.
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Old 23-03-2020, 12:20   #65
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Re: Cruisers Forum Insurance ?

Even with recent increases to premiums, I’m surprised boat insurance doesn’t cost even more.

Thinking about a rough comparison between my house and boat, boat is worth about half of what my house is worth and I pay about 50% more for my boat insurance than I do my homeowners insurance. But it’s very unlikely that my house will hit a reef or spring a leak and sink, and even if I operate it drunk every night, it’s going to continue just sitting there on it’s lot. If my house somehow is damaged, repairs tend to require less specialized knowledge and are less expensive than similar repairs on a yacht. My house will always stay in one place so all risk factors can be carefully calculated, but a boat travels so is subject to various weather conditions and may even unintentionally find itself in a ‘bad neighborhood’ that has much different risk factors than the boats home port does. Then, there’s the uncertainty regarding the competency of the boats skipper and crew but even a novice homeowner can usually be assumed to know how to operate his home without putting it at excessive risk. Sometimes homeowners do stupid things that result in damage to their house, but nowhere near as likely as with a boat.

Regarding the OP’s idea that CF might be a big enough group to start a insurance co-op, we’re not even close to big enough to adequately spread the risk around. Don’t worry about an insurance company making a few bucks off your policy with them. Instead, try to enjoy the peace of mind you buy from them for a pretty small percentage of the cost of your boat and the risks it could be subject to. You’ll be happier that way. But this thread has been valuable in the sense that several different insurance options have been discussed.
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Old 23-03-2020, 15:27   #66
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Re: Cruisers Forum Insurance ?

I am probably one of the most interested people you could find on the subject of insurance. I've posted before, so some of what I say may be a repeat.

First, I need to know why people think they need insurance.

I've owned my boat for 40 years and never had insurance until a couple years ago when my club suddenly required it to be hauled and stored on club property. This was something I never expected and it aggravates me, but I have not choice.

However, I have as limited policy as possible and it cost about $300 year. If it weren't for new club rules, I would never have insurance.

So back to "First": Why insure at all?

What you are talking about is creating a select group where the group experience results in an almost zero claim potential. That is fairly easy to achieve by identifying certain boating characteristics and then limiting the group to people who qualify.

Meanwhile, the term insurance has a profound meaning. You, the careful sailor are "insuring" the risky ones. And we all know who they are.

Enough said. I'd like to hear an answer to my "First" question.

Why insure at all?
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Old 23-03-2020, 17:11   #67
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Re: Cruisers Forum Insurance ?

Why insure at all?


Well, first is liability. That's what your club is requiring. Liability, for most of us, is critical. In this country, you can be sued for next to nothing. A friend's son hit a playmate in the head with a rolled up fake chamois, and the "lost hearing" was settled at $60K. OK, many of us could pay that and not be ruined. But how about an accidental gybe crippling a guest resulting in a $1M suit. I for one would be ruined. Or a fuel tank starts a slow leak, and your first clue is the EPA/USCG notifying you of the cleanup at $800K or so. Or your club's concern -- your boat spills oil all over the ground, you say "sorry dude, I'm broke," and they have to pay your bill. So liability, often talked about on this thread, is critical.


But then the hull. If you have a few hundred thousand in the bank, and a $20K boat (that could be a lot of CF readers), you could make a good argument that hull insurance is a waste. You could go a lifetime never making a claim, and if one day a tree fell on your boat, you are in a position to just go pay cash for another. But if you have $5K in the bank, a $50K annual income, and a $50K boat you spent a lot years saving up for, an accident (freak accident, or dumb move on your part) would be irreplaceable, and the "bad business decision" of buying insurance is worth a fortune in peace of mind.


Me? My cars are 6 and 18 years old, they have heavy liability and no comprehensive/collision -- I can afford to replace them. But, my house is insured (and would be even if it was paid off), and our boat -- representing a fair chunk of our net worth -- is insured even though we paid cash for it. A total loss on either of them would result in a significant change in my life situation.
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Old 23-03-2020, 18:33   #68
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Re: Cruisers Forum Insurance ?

Compulsory iability is such a BS concept. Whoever is afraid of my 40 year old boat hitting their newish boat should be spending the money themselves to aleviate their fears. Not saddling me to provide that soothing feeling. The compulsory nature of any insurance scam is abhorrent (or should be abhorrent) in a supposedly free market society.

If you're so afraid of the real world out there perhaps staying home is the best option.
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Old 23-03-2020, 18:58   #69
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Re: Cruisers Forum Insurance ?

To my knowledge, there isn't any compulsory liability for boats in the US (I can't speak for where ever you are from). There are some businesses that worry about boats that will leave them with a bill if the uninsured boat doesn't have the resources to pay a debt, but that's not compulsory -- in a free market, you can go elsewhere.


But for most of the US, it is compulsory for cars, and I like that. When I was hit from behind by a kid in a junker, I'm mighty glad his insurance paid up. The alternative? I get the work done, then I go see him in court, his lawyer and I argue about the amount, then agree, then he never gets around to saving up the money to pay off the dept, and I give up. Or in some states, "no fault" is the norm, and all drivers pay for the behavior of poor drivers (hey, it doesn't matter if I hit that car, his insurance will pay and mine doesn't go up).


Imagine this scenario. A 30 foot fishing boat, doing probably 30 kts, hits and rides over a J105(? I forget the exact model), doing severe damage (happened here in Annapolis this past summer). Let's assume it's a privately owned boat, without insurance. How many boat owners out there could pay the bill? What, $50K? Maybe $100K? Maybe they'd fight in court, so you could sue them.


Of course, I pay for the peace of mind to avoid that. I pay an extra premium for the chance that someone without insurance or the ability to pay for their mistakes hits me. Because I do have fears that some irresponsible, morally deficient over-extended unqualified drunk in a 40 year old boat will sink my retirement plan and tell me they are too poor to replace my boat. It kind of sucks that if I didn't pay for that, I could end up spending my retirement at home while the person who did it to me gets off scott free.

EDIT: After reading this, it almost sounds like I am attacking Island Time. NO, I am not specifically attacking him or implying that he is the kind of person I described above. I just wanted to make that clear.

But, hey, if you aren't worried about someone driving their boat through the side of your boat and not paying to fix it, you are a better man than I. And if you are prepared to pay $200K to fix the side of some super fancy mega yacht when your steering gear fails at just the wrong time, you are a MUCH better man than I!
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Old 23-03-2020, 19:36   #70
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Re: Cruisers Forum Insurance ?

Insurance is simply one way to mitigate risk. In some circumstances it is a wise tool, in others ... not so much. Comes down to individual risk assessment AND cost-benefit analysis.

So the answer to why have insurance is simple (in theory ): you determine it is the most cost effective way to mitigate the risk you are unwilling to live with.

As I've often pointed out, the real risk faced by most cruisers is very small. All the data for cruising-level boats that I've seen on accident rates and other hull losses indicate this to be so. And unless you believe insurance underwriters are financial and actuarial idiots, the real liability risk is also very small.

Given this, it's reasonable for some people to decide to go without insurance. An even easier calculus is to go with liability-only coverage -- if you can find a broker that will sell that product. But it's also reasonable for some people to decide that this money is better spent in other ways.

Unfortunately, while insurance is not legally mandatory, in many areas it is functionally required. An increasing number of marine facilities insist on customers carrying their own insurance. In some cases there are good reasons for this, but in too many cases it is a method for facilities to limit their own liability for their own potentially negligent actions.
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Old 23-03-2020, 21:03   #71
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Re: Cruisers Forum Insurance ?

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Originally Posted by robertmfranklin View Post
I am probably one of the most interested people you could find on the subject of insurance. I've posted before, so some of what I say may be a repeat.

First, I need to know why people think they need insurance.

I've owned my boat for 40 years and never had insurance until a couple years ago when my club suddenly required it to be hauled and stored on club property. This was something I never expected and it aggravates me, but I have not choice.

However, I have as limited policy as possible and it cost about $300 year. If it weren't for new club rules, I would never have insurance.

So back to "First": Why insure at all?

What you are talking about is creating a select group where the group experience results in an almost zero claim potential. That is fairly easy to achieve by identifying certain boating characteristics and then limiting the group to people who qualify.

Meanwhile, the term insurance has a profound meaning. You, the careful sailor are "insuring" the risky ones. And we all know who they are.

Enough said. I'd like to hear an answer to my "First" question.

Why insure at all?
fairly simple answer here and it's two-fold ;

1. we simply cannot afford to loose our home
2. all marinas or boatyards here require comprehensive insurance with $10-20 mill public liability

cheers,
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Old 24-03-2020, 02:52   #72
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Re: Cruisers Forum Insurance ?

The problem with trying to form a group to share risk with is that it’s so hard to tell who the individuals in that group should be. When I got my first cruising sailboat back in the late 80s, I was surprised by how inexpensive it was because I was so inexperienced and had admitted that to the insurance agent. So I asked him why so cheap and would rates go down once I had gained experience and had no claims. He said that the fact I was a professional pilot was the reason they’d insure me and at their lowest rate so no, the rate would not go down further. True to the insurance companies expectations I was very careful and had no claims.

But then one fall I made arrangements to have my boat hauled a day before leaving town for 4 days for work. So I delivered my boat to the yard the day before it was scheduled to be hauled and prepared it for hauling and winter storage. I had used this yard previously so we all knew that we needed high tide in order to haul out my 7’ draft boat. I planned to drive so waited aboard with radio on to get the word that they were ready but no call came. So, as high tide approached I called them and finally reached someone who told me the haulout crew had decided to go to lunch first and haul my boat afterwards. By the time they were ready to haul my boat high tide has passed and they had a little trouble with their Brownell trailer which made it impossible to haul my boat that tide. They told me they would haul it tomorrow and which mooring they wanted my boat on until then so I put my boat on that mooring and left the yard to start preparing to go to work. The next day I left town and noticed the wind was piping up more than predicted, enough so the yard couldn’t haul boats that day. That night the wind increased even more and dragged my boat into another boat on another of the yards moorings, doing about $10,000 damage to each of the boats. The yard took no responsibility and my insurance company paid. Obviously the yards moorings weren’t adequate for the boats on them but my insurance company made the pragmatic decision to not sue them. I was still the careful, responsible sailor I’d always been, but I had a claim and it easily could have been a much bigger claim if the boat that my boat dragged into has been more expensive or if the 2 boats had come together differently.

So, how do you decide who to let into your very low risk group and what happens when a confluence of events that couldn’t have been foreseen leads to serious damage? It seems to me that it’s much better to just write a check to my insurance company and let them do all the worrying about who’s low or high risk and why and what each should pay. From my experience, boat insurance is a good deal for the peace of mind it buys.
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Old 24-03-2020, 05:07   #73
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Re: Cruisers Forum Insurance ?

There's lots of reasons to have insurance. If you want to cruise long distance there are places adding insurance as a requirement for entry. I cleared into Langkawi, Malaysia a couple of weeks ago. The Port Authority, not the marina, requires insurance coverage and they check the paperwork carefully.
I also received a permit to transit Chagos an uninhibited island in the middle of the Indian Ocean. The BIOT was very picky on the specifics of the insurance you carry prior to issuing a permit.
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Old 24-03-2020, 06:15   #74
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Re: Cruisers Forum Insurance ?

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That night the wind increased even more and dragged my boat into another boat on another of the yards moorings, doing about $10,000 damage to each of the boats. The yard took no responsibility and my insurance company paid. Obviously the yards moorings weren’t adequate for the boats on them but my insurance company made the pragmatic decision to not sue them. I was still the careful, responsible sailor I’d always been, but I had a claim and it easily could have been a much bigger claim if the boat that my boat dragged into has been more expensive or if the 2 boats had come together differently.

This is a curious story, and contrary to what I have seen. The yard isn't responsible, unless the mooring was clearly unsuitable (and they probably used it on a regular basis and it seemed fine). So they don't pay. Your insurance covers you from the loss, same as if your own anchor had dragged.


The weird part is how the insurance company assumed the liability for YOU dragging. You are even less liable for the damage to the other boat than the yard. The second boat should have paid for their own damage.


One nice thing, normally, about insurance is they have a better understanding of who is liable, and don't quibble about it. If the yard were responsible, their insurance would have paid regardless of the yard's objections (and perhaps your insurance subrogated against theirs without your knowing). And if you weren't responsible, your insurance wouldn't have paid, no matter how bad you felt about hitting him.
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Old 24-03-2020, 16:49   #75
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Re: Cruisers Forum Insurance ?

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Originally Posted by Paul L View Post
There's lots of reasons to have insurance. If you want to cruise long distance there are places adding insurance as a requirement for entry. I cleared into Langkawi, Malaysia a couple of weeks ago. The Port Authority, not the marina, requires insurance coverage and they check the paperwork carefully.
I also received a permit to transit Chagos an uninhibited island in the middle of the Indian Ocean. The BIOT was very picky on the specifics of the insurance you carry prior to issuing a permit.
British Indian Ocean Territory (BIOT)?
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