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Old 31-01-2024, 13:12   #1
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Has boat insurance become so hard to find?

I sold my 1994 Caliber 40 to a couple with a lot of sailing education and experience but no prior boat ownership. They have been unable to find any insurance that is reasonably priced with realistic terms.

They are in their early 50s, a pair of professionals who own a well established and successful business/consultancy. They own their own home. They have taken all the ASA classes thru offshore cruising and have chartered large boats several times for a week or 10-days in the Virgin Islands.

They paid to have a very through out of the water insurance survey done. It listed no priority one (Safety & Regulatory) defects, It found 53 priority two defects which are deemed "important maintenance items."

The overall condition was "average" with a fair market value about 40% above the purchase price.

They were told by several insurance brokers that it was almost impossible to get boat insurance for anything over 32' or35' with no prior boat ownership experience.

The best deal they could find was $50,000 coverage with a $7,500 deductible for annual rate of $3,000. AND...the insurance would not cover any damage due to any of the maintenance items listed in the survey.

Those items were things line:
bilge shows some dirty standing water
raw water intake shows signs of barnacles
wash down pump not working
running rigging is frayed
halyards show some wear
cockpit GPS is not permanently mounted
spade anchor shows some corrosion
dock lines show some wear
knot meter transducer not installed (I keep it out to prevent growth)
genoa furling line shows wear
serial number on Yanmar is not readable

The buyers are broken hearted. We have been working on this deal for over six-months. They had a written quote from one of the big marine insurance companies prior to the survey. They put their home on the rental market and planned to live on the boat full time by mid-April.


Now - they and I have to start all over again.
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Old 31-01-2024, 13:31   #2
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Re: Has boat insurance become so hard to find?

I bought a 1982 Morgan 321 last August. I have a lot of sailing experience in small boats solo and other peoples boats. My wife has none.

We got a policy for full current value of boat (based on purchase price), $500K liability, and a $250 deductible. Got it in 15 minutes on the phone, no survey required. Same company I have Homeowners and Auto insurance. State Farm.

I paid $177 for 12 months coverage.
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Old 31-01-2024, 13:31   #3
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Re: Has boat insurance become so hard to find?

It's a bit surprising to me that some of those items are a priority 2.

Anyway, "reasonable" means different things to different people. I would not worry about no coverage for damage related to survey items, because they such damage would probably be under the deductible and those will all be addressed anyway. New buyers need to plan to make some repairs to a new to them boat. Most of those items a new owner could take care of themselves in the first weekend, so shouldn't be any concern, just take care of them.

Is a $3000 premium on a $50,000 asset really a deal killer? I feel bad for them, but maybe their expectations were just misaligned. It's a bit expensive, but EVERYTHING is more than it was a few years ago. They are probably getting substantially more rent than they would have a few years ago too.
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Old 31-01-2024, 13:47   #4
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Re: Has boat insurance become so hard to find?

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Originally Posted by TacomaSailor View Post
I
They were told by several insurance brokers that it was almost impossible to get boat insurance for anything over 32' or35' with no prior boat ownership experience.

This is increasingly the case. It is worse in Florida. It is worse with older boats (20 years).
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Old 31-01-2024, 13:49   #5
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Re: Has boat insurance become so hard to find?

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Is a $3000 premium on a $50,000 asset really a deal killer?

The boat is surely worth more than that.


On a percentage of insured value, a $3000 premium is six times what I pay.
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Old 31-01-2024, 13:53   #6
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Re: Has boat insurance become so hard to find?

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Originally Posted by Redboat View Post
I bought a 1982 Morgan 321 last August. I have a lot of sailing experience in small boats solo and other peoples boats. My wife has none.

We got a policy for full current value of boat (based on purchase price), $500K liability, and a $250 deductible. Got it in 15 minutes on the phone, no survey required. Same company I have Homeowners and Auto insurance. State Farm.

I paid $177 for 12 months coverage.

I may be mistaken but I believe that State Farm has very different underwriting requirements for boats in Florida, compared to boats in the midwest. If I recall correctly they also have a threshold value beyond which underwriting becomes more complex -- around $100,000.



I previously used State Farm for a boat similar to yours, under similar circumstances, in Minnesota.
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Old 31-01-2024, 14:02   #7
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Re: Has boat insurance become so hard to find?

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Originally Posted by TacomaSailor View Post
I sold my 1994 Caliber 40 to a couple with a lot of sailing education and experience but no prior boat ownership. They have been unable to find any insurance that is reasonably priced with realistic terms.

.........


Now - they and I have to start all over again.

Which insurer do you have on the boat now, and what cover and premium do you have on it, phone them up and ask if they will cover it for new owners (phone the insurer not a broker)
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Old 31-01-2024, 14:10   #8
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Re: Has boat insurance become so hard to find?

The boat is in SW Florida (90-miles south of Tampa) but they will sail her up to Wilmington, NC and keep her there for a couple years.

I have been with GEICO/BoatUS for over 20-years. I did call them and they did say they would insure it and sent a quote to the new owners. But, when it came time to transfer the title and pay the premium the insurance offer was rescinded.

My back-up purchaser (we all had a complicated arrangement to cancel the initial purchase and let the 2nd guy buy it) has been able to get insurance thru State Farm for less than I am paying GEICO.

Florida insurance is a real problem now. We live on the water at 11' but the new FEMA maps put us in the most expensive flood zone. Out homeowners insurance has tripled in seven years and FEMA flood insurance has doubled.
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Old 31-01-2024, 16:21   #9
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Re: Has boat insurance become so hard to find?

In my area around Sarasota, everyone seems to have no problem obtaining insurance including new boat owners but it isn’t cheap. I infer, perhaps, incorrectly, that this person simply didn’t look that thoroughly or suffered sticker shock when faced with the cost which understandably is expensive in places like Florida.
Never heard insurance being a show-stopper to purchase.
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Old 31-01-2024, 16:56   #10
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Re: Has boat insurance become so hard to find?

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The boat is surely worth more than that.


On a percentage of insured value, a $3000 premium is six times what I pay.
I need a new broker, but I guess most people do nowadays. It is twice what I pay as a percentage, but I am an existing customer, with lots of experience. My boat is also insured for much less than it's value, that is a common scenario.

But if making a purchase of over 50,000, which would have annual maintenance of thousands of dollars, I might be upset about insurance coming in high, but I wouldn't kill the deal. Another boat will face the same issue.
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Old 31-01-2024, 17:32   #11
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Re: Has boat insurance become so hard to find?

Quote:
Originally Posted by TacomaSailor View Post
.
.
.
They were told by several insurance brokers that it was almost impossible to get boat insurance for anything over 32' or35' with no prior boat ownership experience.

The best deal they could find was $50,000 coverage with a $7,500 deductible for annual rate of $3,000. AND...the insurance would not cover any damage due to any of the maintenance items listed in the survey.
.
.
The main issue is that they have never owned a boat, not the age or location. Insurance companies like you to start small and step up in size gradually, not jumping straight into a large, fancy boat.

Their options include paying the high insurance rate to start, and it would presumably decrease as time passed without issues / claims. Or starting in a smaller boat, say 22' to 25', and start working their way up in size. (You probably don't want to wait for them with this option.)
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Old 31-01-2024, 17:41   #12
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Re: Has boat insurance become so hard to find?

As a recently retired boat broker, I had counseled my clients to check on insurance early in their search. Nationwide, the game has changed in terms of limited availability for those without prior ownership experience. Period.

Now, add into the mix higher premiums for Florida - and this is what happens. It's a reality. I recommend they either pay the higher premium for a year and hopefully have no claims. Then shop for something more reasonable, or buy a smaller vessel and then trade up.
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Old 31-01-2024, 17:42   #13
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Re: Has boat insurance become so hard to find?

Nonsense.

I have worked with several boat owners with a background in sailing, but no previous ownership, who purchased boats 50+ feet. As a licensed Captain I had to sign off their skills for the underwriter before they were allowed to sail off on their own. It was not hard or complicated, and they were all competent sailors who needed a bit of training on the specifics of the boat, but I was more than happy to put my signature on the line.

I would never sign off on somebody who would generate an insurance claim the first time they took the boat out.

Assuming you actually are competent, there ARE options out there.
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Old 31-01-2024, 18:05   #14
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Re: Has boat insurance become so hard to find?

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Nonsense.

I have worked with several boat owners with a background in sailing, but no previous ownership, who purchased boats 50+ feet. As a licensed Captain I had to sign off their skills for the underwriter before they were allowed to sail off on their own. It was not hard or complicated, and they were all competent sailors who needed a bit of training on the specifics of the boat, but I was more than happy to put my signature on the line.

I would never sign off on somebody who would generate an insurance claim the first time they took the boat out.

Assuming you actually are competent, there ARE options out there.
Yes, high insurance premiums.

If you know a way around that, OP would like to know the details.
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Old 01-02-2024, 10:56   #15
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Re: Has boat insurance become so hard to find?

Call me cavalier, but I would self insure if faced with a $3K premium on a $50K boat and just get liability coverage. As a point of reference, my Alerion 28 is probably worth $60K and my premium with Allstate is $372. I had one claim several years ago for over $20K in damages that resulted from a mark rounding (I was on starboard) so probably the other guy's insurance paid most of it.
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