Boat Insurers: Cartel or not? Time to leave BoatUS?

[Wallaby]

For 30 years I have insured my boats with BoatUS, now Geico. During those years I have had one claim, a lightning strike. Yesterday, my insurance went up by 20%. After calling Geico, I was told the increase was because of "A policy rewrite." I posted about it on an older thread--the responses suggest this is an industry-wide increase. Any lawyers interested in a class-action anti-trust suit?

Today, I tried to email BoatUS to bring this to their attention. They are supposed to represent their members, and I've been a member for 30 years. The website is highly restricted, all email contact is controlled, and non-conforming topics are never addressed. Calling the 800 number gives a polite person--rather like talking to a call-bank in the Philippines. I think boaters are being 'screwed' down with caulking.

[Shrew]

The premium increase has nothing to do with your lightening strike. This is how mutual insurance works. The total premiums collected cover the policy payouts. When the payouts increase, cost is distributed equally amongst it's members. Rather than paying for an entire boat, everyone pays just a little bit.

Look at the weather events over the last 18 months. The marine insurance industry has paid out Billions.

You have two choices:

1) Self-Insure
2) pay premiums

Calling it a Cartel and rallying for civil action is simply ridiculous and unreasonable.

[NaClyDog]

Originally Posted by Shrew

The premium increase has nothing to do with your lightening strike. This is how mutual insurance works. The total premiums collected cover the policy payouts. When the payouts increase, cost is distributed equally amongst it's members. Rather than paying for an entire boat, everyone pays just a little bit.

Look at the weather events over the last 18 months. The marine insurance industry has paid out Billions.

You have two choices:

1) Self-Insure
2) pay premiums

Calling it a Cartel and rallying for civil action is simply ridiculous and unreasonable.

Three choices actually:


3) Sell boat.

[Wallaby]

I did not mean to imply that the strike was responsible--it was 10 years ago.

It's been my experience that insurance works based on expected risk level and expected payout. The accumulation of 'members' merely consolidates (averages)_ individual risk and expected payouts into more-or-less-known quantities. eg. 0.5% of vessels will have lightning strikes with an average payout of $50K.

That said, have the increase in payouts from 'weather events' over the last 18 months been sufficient to justify a 20% increase in the premium. If so, than an industry-wide increase would be justified, and could be stated as the reason for higher rates. However, I was informed the reason was 'policy was re-written' with no other explanation. This would not be the first time that an industry has taken advantage of a situation to dramatically increase its profits by operating in a non-competitive manner--which is the reason why there are anti-trust laws.

'Rewritten' to me, is a red flag. Customers can ask for more information--I tried.


As for options,

4) looking for companies offering lower premiums
5) consumers reacting to high costs by uniting and complaining

[Shrew]

First off, BoatUS/Geico, Progressive, etc would be the LAST place that I would look for marine insurance. Start with a multi-line agency that specializes in marine insurance. Maritime Insurance International is one, however there are several around. Typical Home and Auto agencies don't have as much to offer.

A multi-line agency represents a variety of insurance companies. They will be able to give you comparable quotes from a variety of companies. A Marine specific agency will represent a variety of underwriters that also specialize in marine insurance. Rather than a company that writes mostly home and auto policies with a small marine division that tends to write paper for trailer boats.

[CoryW]

Being rewritten is telling me that your prior term was written on Boatus paper and the increase comes from moving over to Geicos.
Your best bet to stop thinking "clubs" will find you the best rate. Their not. Find yourself an insurance broker that specializes in boat/ marine insurance.

[sailorboy1]

we all know the game

if you have a claim your policy cost increases

if you don't have a claim, but others do, your policy cost increases

[Stewie12]

Yes, this is probably the only time a broker can save you money.

[Russ]

FYI my BoatUS $2,500 premium DROPPED $250 for 2021 season. Go figure ?

[SeeMonstrEd]

For those of us in the Caribbean BoatUS/Geico is dropping all policies. We are forced to look elsewhere.

I have found several quotes from other companies. All requiring an out of water survey and costing up to double of what I paid this year.

I found one from a company out of Costa Rica called ION that is offering better coverage for 1/2 what I paid this year. I have never heard of them and am not sure I should trust this.

Has anyone else heard of ION Insurance or Edward Williams SL out of Spain?

[sepharad]

I understand that several insurers have been slammed, and I mean slammed, but weather. They spread the loss to remain in business and maintain their profit margin, or go out of business.

I understand this is why Pantaenius left the US market after hurricane Irma.

This also is a result of another and probably the most important role of insurance companies. Loss analysis for the purpose of underwriting.

I am not interested in anyones opinion about global warming, nor their politics. We are talking dollars and loss vs profits, and so do insurers. They give a hoot about my opinion or my politics. What they care about is profits and losses. They ARE the model for loss prevention analysis. No matter what YOUR or MY opinion is on global warming, THEIR opinion, based on hard, scientific professional analysis is that it is warming faster than ever recorded before. It is causing a steadily increasing of severity and regularity of climactic disruption and storms. It will continue and INCREASE In the future.

Irma ALONE damaged or destroyed 50,000 vessels and approximately $500 million in recreational boat damage. Harvey inflicted $155 million Damage on about 13,500 boats.

Now project that as increasing in frequency, regularity and severity.

20% is tough. I know it. Insurance is drying up for ANY increase in liability...age, experience, area of operation...you name it. If they can identify it, they will. It's how they survive. I am slowly but surely being shut out as well. Eventually they will say, "nope".

[sepharad]

Originally Posted by Russ

FYI my BoatUS $2,500 premium DROPPED $250 for 2021 season. Go figure ?

Area of operation. Had reduced loss...is only my guess. It's all pretty heartless, based on dollars and cents.

[rmlarson1098]

Originally Posted by Shrew

The premium increase has nothing to do with your lightening strike. This is how mutual insurance works. The total premiums collected cover the policy payouts. When the payouts increase, cost is distributed equally amongst it's members. Rather than paying for an entire boat, everyone pays just a little bit.

Look at the weather events over the last 18 months. The marine insurance industry has paid out Billions.

You have two choices:

1) Self-Insure
2) pay premiums

Calling it a Cartel and rallying for civil action is simply ridiculous and unreasonable.

Self-insure. Good idea, if you can afford to take the loss of your boat.
We are fortunate in that we could handle the loss, not because we are wealthy but rather because we sail a (very) modest boat. Of course liability insurance is pretty much 'required' if you want to enter a marina - or pull up to a fuel dock -
but what honks us off is the insistence by more and more marinas/boat harbors that we insure our boat for 'loss', (hull coverage) which really is none of their damn business.
Insuring a vessel for salvage/wreckage removal should she sink in her slip or a channel makes sense, as there are certainly less than responsible owners out there that might abandon a sunken boat. But that's not the same as Hull coverage (loss( at least in our simple minds, and we resent - and refuse to be bullied into buying - hull insurance. To describe the insurance industry as a 'Cartel' may be unreasonable. It's also an insult to cartels everywhere.

[sail sfbay]

Time to go shopping.............BoatUS quotes for ALL my boats (motor yacht, motor boats, sailboats), have NOT been competitive for 10 years. Check with a marine insurance broker for a competitive quote. Same experience with my auto and home and fifth wheel trailer insurance rates last year that increased by 55%, 50% and 50%, respectively. So went shopping and have better coverage policies that are less than I was being charged PRIOR to the rate increases.

[Shrew]

Originally Posted by rmlarson1098

but what honks us off is the insistence by more and more marinas/boat harbors that we insure our boat for 'loss', (hull coverage) which really is none of their damn business.
Insuring a vessel for salvage/wreckage removal should she sink in her slip or a channel makes sense, as there are certainly less than responsible owners out there that might abandon a sunken boat. But that's not the same as Hull coverage (loss( at least in our simple minds..........

To my knowledge, liability insurance will only cover damage to the docks, surrounding boats and environmental clean-up. It will not cover the cost of the salvage itself. The marina doesn't want a boat sunk in a slip and the owner holding out empty pockets, or disappearing.

This would leave the liability of the salvage to the marina. The marina doesn't want to incur the salvage costs. No marina wants a sunken boat occupying a slip. This prevents use of the slip and makes the place look like a junk yard, ultimately driving down revenue.

The marina's only option is to insist on comprehensive insurance, which typically includes salvage.