Liability insurance

[sneuman]

I can't say enough negative things about insurance companies (or banks, but that's another subject).

The latest here in Asia is that brokers are refusing to cover boats - sight unseen - that are over 30 years old for Third-Party liability. Without explanation, several rejected me based on the age of the vessel. I inquired as to why that would make any difference for liability insurance, but received no reply. Without insurance, Hong Kong, for example, won't renew your license. It's incredibly frustrating.

[Alan Wheeler]

Having a Ferrocement boat is another problem with Insurance. When we first tried insuring, we rang everyone we could find. Every single one just said, Nope we don't insure Ferrocement boats. No one would give us a reason why, except parrot on that it was company policy. We finally found one company that said yes, but only because the boat was so new.
One thing that I did discover from a freind that is a Bank Loan/Mortgage manager, that with many insurance companies AND Banks, is that they often all have one underwriter. And it is the Underwriter that dictates the terms and conditions. So trying to argue a point to the imediate company you are trying to deal with is a waste of time, because it is someone else many places further up and out of reach that actually calls the shots.

[sneuman]

it's always the little guy that gets screwed. it hardly seems fair that this is a requirement for license, and then that the insurance companies can deny coverage. what a gravy train for the industry - govt. sanctioned cherry picking!

[Euro Cruiser]

Sam, it sounds to me like your gripe is with the local govt. rather than the insurance industry. If there was a thriving market for insurance where you are located, for insurance companies to be more competitive with one another AND more of them to seek licensing to operate in your area, you would have more choices. If there were no regulatory requirement that you carry liability insurance, you might not even be looking for it. Instead, both these issues exist because of the way the insurance industry is regulated where you choose to live and sail.

I too am not a keen supporter of the insurance industry. In my home state in the U.S. - Florida - the industry has been so quick to run away from their own customers that the State has had to install itself as a carrier. But at least the State has done that, realizing that otherwise its own interests and those of its citizens is protected, since it can continue to mandate insurance and so protect 'the OTHER little guy' who e.g. is hit in his/her car by an uninsured driver or has a home too old in the eyes of the private carriers.

I'm sorry to hear that nifty boat of yours is causing some problems for you; that's sure deflates the fun associated with your purchase. But as just one example of the benefits of liability insurance, I see a a large number of hulks, derelicts and other debris left by owners fo boats who are uninsured, suffer some kind of mechanical or navigational casualty, and then just walk away from their boats, assuming its 'all the other little guys' responsibility to clean up the shoreline. Liaibility insurance serves a useful purpose, it seems to be; I can understand a governmental entity requiring it, just as I can understand a private marina requiring it, in order to protect their own financial viability.

The irony in your case is that there "should" be a market for what you need because the govt. itself is mandating that it exist. Unfortunately, your govt. has disassociated its reglatory mandate from creating an environment where private industry provides the coverage it wants you to have. Again, it sounds to me like you have a gripe with your government, not an entire industry. Good luck on finding a resolution you can live with.

Jack

[sneuman]

Well, obviously it's a problem in both Hong Kong and Oz. It is a govt. problem, but more specifically the insurance companies I would guess have lobbied for this _ much as they did for mandatory auto insurance in the States _ under the guise of "protecting the little guy." sounds all well and good until the govt. actually hands them the keys

[BC Mike]

The main basis of insurance is to adequately share the risk, and apportion the correct premium.
Smokers pay more for life insurance than non smokers is an example.
With a socialist government plan such as health insurance, everyone pays the same, and it even gets cheaper when you get to 65.
It is possible an individual company has had a bad loss record with certain boats so they have decided to limit coverage. Another company may have a different policy.
Most companies use some type of reinsurance to adequately share the risk.
One company might feel vulnerable insuring all the houses in a known earthquake or flood area, so they use reinsurance. If a bunch of companies are using the same reinsurer you might get the same answer.
It can be frustrating. I do not sell boat or property insurance, but I have studied the subject as part of my ongoing education in the estate business.
Michael

[sneuman]

agreed. but when it defies common sense that an older boat would incur more liability and then agents refuse to explain their logic or offer an alternative, life gets very frustrating

[BC Mike]

Yes when we think in terms of causing damage to others, how would an older boat be worse than a new one.
But if the old boat sank, or had a mast fall down, or an explosion, and any of those injured someone, then that is a liability claim.
I agree it would be nice if they could provide some reasoning and that may be hard to find.
Boat replacement can be as little as say $25,000- but a liability claim for injuries and or death could be rather expensive.
My Yacht club requires us all to provide liability insurance.
Am wondering if you can get coverage from a company not in your area.

Michael

[Euro Cruiser]

I don't think I've yet to sail in an area where, when I walk the docks and look at ALL the boats, work & pleasure, where older boats haven't appeared to pose a bigger threat of loss & liability damage than newer boats. While this doesn't impeach older boats from coverage consideration - in fact, you could argue the reverse is true - it's easy to see how the increased risk as I imagine it can deter a carrier from offering the coverage. It's at this point - sorry for the broken record - where a govt'l entity can step in and mandate that carriers (e.g. in order to obtain a license to do biz as an insurer) provide coverage for liability protection to everyone who wants it. After all, is not providing mechanisms that provide a common level of protection for everyone (which would include the environment) one of govt's primary reasons for exsiting? OTOH what do we reasonably have a right to expect from a private business re: protection for the common good?

Jack

[GordMay]

We can expect nothing from private business, that we do not mandate as a condition (for all) of doing business in our market.
Private business may provide enhanced services, if it thinks* that they may be a [profitable[/u] enhancement of their competitive situation.
Hence, Government must set minimum service standards, where the public welfare is concerned.
We the people (in the body of our Gov’t), must look to our own welfare.

* Business is not nearly infallable - they may not recognize competative advantages, or profit opportunities.

Gord
PS: I admit it - I'm a pinko ...

Scott,
it is unfortunate, but true, there are some things that a democratic society provides that can not be found elsewhere. government regulation of private industry is one of those things. Granted, our current system here in the US seems to have strayed (right off a cliff), but that is what is supposed to happen. As for the insurance companies not explaining the reason for their decision, that is a customer service problem specific to the company, not to the industry. I happen to be in the insurance game, and when I deal with clients, I have answers. In the case I do not have the answer, I take it as my responsibility to get the answer. I do not have any thing to do with underwriting, so I do not know all of what goes into such decisions, but I can assure you that if one of my clients had a question regarding coverage, I would find an answer, or someone who could. Actuarial is a very complicated part of the industry, and factors that you as a responsible boat owner, would never even consider, do come into play.
That being said, when mandatory auto insurance regs were put into place in California, the state also made it very difficult for insurance companies to refuse to insure people. Many insurers simply had to stop doing business in California. And even then, they could not refuse to renew policies, they could only refuse new ones.
I will admit that insurance companies are in the business of making money. No surprise there, but to assume they have cart blanche to do as they please is inaccurate. It is in our company policy to "find coverage" This means that we will make every effort to find coverage, as opposed to finding reasons to deny it. This does not mean blindly paying out to everyone who demands a buck, but it does mean that if you have a policy with my company, and your property is damaged we will do everything within our power to indemnify you. The benefit of this willingness to payout brings us far more profit from retained clients then we could ever get from a constant influx of short term clients.
That is the key to the insurance business.
PM me some basics on your boat, and I will see if I can recommend someone in your area. My company does not do business overseas, but I have a friend who is a maritime attorney, and works with insurers world wide.
I can only provide a perspective from the US, as I have not dealt with foreign insurers, but I think the assessment that government plays a large part in the problem is accurate.

[BC Mike]

With the mention of Hong Kong in the original post it got me thinking about maybe a British company might do business there. Commercial Union is a General Insurance company, as well as a Life Insurance company. They do sell boat insurance in NZ.
Michael

[sneuman]

Thanks for all those who replied. I did finally find an insurer - at twice the price of the last premium.

Interestingly, I know two delivery skippers here in Asia, and the real horror stories of near disasters (including fried electronics, rudders falling off, etc.) have been on NEW boats. Not scientific, but interesting.

They just don't build them like they used to.

[CaptainK]

Maybe it has something to do with the deprication value of the boat. And what materials their made of? Maybe that has a factor involved with the age of the boat?

That's just me guessing!! I was reading all these posts. And it got me thinking about automobiles. Here in the USA. When it comes time to renew your registration stickers, for your license plates. If you look closely at how much it the price dropps each year.

Every year. Each state values each car. (Kelly's Blue Book) And then charges a price for a new sticker!! That's how it's done with autos. But, it seems boats a a pain in the you-know-what, to insure. Must be the invironment? And the underwriter that backs the money for the insurance company?

Regards,

Kevin
CaptainK