Cruising without insurance, how tough?

[dkall]

Not boat related but insurance related. I live in a condo. My R/O unit blew up when I was at work. Water everywhere and dripping down to the floor below. Water was shut off sometime in the day while I was at work but there was much damage. I called my insurance company and informed them. They sent an adjuster over and I told them about the damage most likely to the floor below. The insurance company rep said "their" insurance would cover it; since it was an "act of god" they weren't responsible. Maybe had I turned the water on on purpose and let it run I or my insurance company would have been liable. I don't know. However; I gave my neighbors the claims number that I had been given by my insurance if they were going to contact them, but I never heard who paid or what had happened.


Fair Winds

[psteele235]

Dkall - I believe the insurance company rep was not totally correct - more likely yes, their insurer would have paid for their damages but then subrogated against your insurer as it was caused by your unit. Sounds as if your neighbour was satisfied otherwise he would have been banging on your door again?

[viking69]

I still do not understand how people say they can not afford it. my cover is for 10 million third party and 60 grand for my little 30 footer. all that for just $500ish a year, seems like there no question about having it or not. if you cant afford that you should not be on the water.

[Holding Pattern]

Originally Posted by viking69

I still do not understand how people say they can not afford it. my cover is for 10 million third party and 60 grand for my little 30 footer. all that for just $500ish a year, seems like there no question about having it or not. if you cant afford that you should not be on the water.

Viking, I would LOVE to know who you're with for 10 mil/$500/yr. Do you live aboard and cruise? Trying to switch up and wondering your "basic info."

[viking69]

mate i am with club marine here in Aus. Does not cover international travel but does cover 250 miles of coast of Australia and new zeland. yes live aboard and cruise within those limits. just had a claim for $15000 grand worth of damage due to storm and no problems with them at all.

[donradcliffe]

Viking,

For the same coverage which cost me $600/yr in Australia, they want $1200/yr in the Med, $3500/yr in the Caribbean, and $7500/yr in Florida. Knowing that Club Marine isn't losing money on the $600/yr policy, would you be willing to pay these pirates 6 or 10 times that amount?

[Holding Pattern]

Unbelievable! The price difference for the same insurance is highway robbery. Oh to be in OZ! We were quoted near 8k for a similar policy... that's just sick.

[donradcliffe]

Those quoting international maritime law should be familiar with its unusual limits of liability--the following is from Wikipedia

Limitation of shipowner's liability

One of the unique aspects of maritime law is the ability of a shipowner to limit its liability to the value of a ship after a major accident. An example of the use of the Limitation Act is the sinking of the RMS Titanic in 1912. Even though the Titanic had never been to the United States, upon her sinking the owners rushed into the federal courts in New York to file a limitation of liability proceeding. The Limitation Act provides that if an accident happens due to a circumstance which is beyond the "privity and knowledge" of the ship's owners, the owners can limit their liability to the value of the ship after it sinks.
After the Titanic sank, the only portion of the ship remaining were the 14 life boats, which had a collective value of about $3000, and the "pending freight" bringing the total to about $91,000. The cost of a first-class, parlor suite, ticket was over $4,350. The owners of the Titanic were successful in showing that the sinking occurred without their privity and knowledge, and therefore, the families of the deceased passengers, as well as the surviving passengers who lost their personal belongings, were entitled to split the $91,000 value of the remaining lifeboats and pending freight.
In the era of modern communications, continued need for the Limitation Act is questionable. The theory behind the Act was that a shipowner who properly equipped and crewed a ship shouldn't be liable for something that happens when the ship is out of his control. Modern ships are seldom out of the control of their shoreside owners, but the Act remains a viable protection to them.
The Limitation Act doesn't just apply to large ships. It can be used to insulate a motorboat owner from liability when he loans his boat to another who then has an accident. Even jet ski owners have been able to successfully utilize the Limitation Act to insulate themselves from liability.

[viking69]

Originally Posted by donradcliffe

Viking,

For the same coverage which cost me $600/yr in Australia, they want $1200/yr in the Med, $3500/yr in the Caribbean, and $7500/yr in Florida. Knowing that Club Marine isn't losing money on the $600/yr policy, would you be willing to pay these pirates 6 or 10 times that amount?

wow the price difference is radiculous. but i would still have at least 3rd party no matter where i was. makes you wonder why the different countries have so different prices. i think it would be interesting to see a policy to claim ratio for each of the countries and see if that reflects the price differences.

[Mike Banks]

The same sort of law which applied to the Titanic is the one I think is being tried on by the owners of the Exxon Valdez--who knowingly hired a captain with a known propensity for alcohol. Apparently he left the vessel under the command of a junior officer with no experience of the area, after diverting the vessel from the usual shipping channel because there was allegedly ice floes there. The junior officer then ran her aground. They want to stop paying for the remaining mess and clean-up costs it seems.

I hope the court decides to screw 'em some more. The company want to dump liability on to the negligent captain, their employee. If they get away with this the taxpayer might be liable to refund them the money they have spent thus far. Lets hope not!!

In Oz there are several companies offering cover. Club Marine do not insure trimarans. They have a good reputation in Oz. My comprehensive cover costs me $1500 per year for an agreed write off value of Sixty five thousand which is what I paid for the vessel originally--although I have spent more than ten thousand on her since then.

I was also offered cover for two thousand from another marine specialist insurer. The two policies were similar. I do not live aboard all the time--but I do have extended stays aboard. I notify the company whenever I change the home berth of the vessel such as when I move to another locale or type of berth.

It sounds as though some sort of mutual insurance cover ought to be set up in America if the premuims are so absurdly high. Such a group could co-ordinate the rental of cover on behalf of its members. Since it is only arranging cover and not providing it directly it might be able to be seen as a non-profit organisation for tax purposes--

Just had a thought. Maybe the premiums are high because of the Exxon Valdez--you guys might be footing the insurance bill indirectly--

[donradcliffe]

In the Exxon Valdez case, Exxon has paid for the damages caused by the oil spill, but the US Supreme Court is going to decide whether they can use the maritime liability limits to avoid 'punitive damages'. Punitiive damages is something thought up by the US legal system to make lawyers rich, and I hope it has not spread to OZ, which also has too many lawyers.

Punitive damages means that if I scratch your boat, not only do I pay for fixing it, I pay maybe 2 to 5 times as much because I was a bad boy and need to be punished(and the lawyers get their 40%)

[Mike Banks]

In Oz Cover increases by a goodly margin once a vessel exceeds thirty feet in length. Some companies will not insure vessels over this length. The best insurance bet seems to be a steel monohull thirty feet in length having kerosine or metho galley stoves and a diesel inboard engine.

I was quoted three hundred bucks third party property damage before I told them I was over thirty feet. Maybe my next tub will be a thrty foot steel Hanna or Archer design ketch--travel by mal-de-mer is much cheaper.

[Mike Banks]

Thanks for clearing that up Donna.

[Pblais]

US Supreme Court is going to decide whether they can use the maritime liability limits to avoid 'punitive damages'.

Even though they are calling it punitive damages this is money to pay the fishermen that were damaged by loss of income. The issue of maritime law is if the capt is only an employee under maritime law or the manager of a division of the Exxon corporation. The ship itself is listed as a division of the corporation. Under a corporate liability claim there can be punitive damages if the captain is not just an employee. The maritime liability is in a sense already settled with the 4 billion or so already paid and spent.

This case goes beyond just maritime law into US Corporate liability law. There are no punitive damages under maritime law. Nothing about it applies to cruisers or changes maritime case law at least so far.

[GordMay]

Supreme Court Weighs Exxon Valdez Damages ~ by Nina Totenberg
NPR: Supreme Court Weighs Exxon Valdez Damages

Justices Take Up Battle Over Exxon Valdez ~ By Linda Greenhouse
http://www.nytimes.com/2008/02/28/wa...yw&oref=slogin

"... The federal government indicted Exxon on five criminal charges, with potential penalties totaling $5 billion. The company soon agreed to plead guilty to three counts with a fine of $25 million, or less than 1 percent of the total potential criminal fine, plus $900 million in civil fines to be paid over a 10-year period. In addition, the company paid $2.1 billion in cleanup costs, and several hundred million dollars more to fishermen for their lost summer catch. In all, the company would pay $3.4 billion. But the fishing industry, plus businesses affected by the spill, and the native Alaskans whose very way of life had been ruined, contended that Exxon had not paid enough ..."