How does Sea Tow operators make money?

[Shanachie]

The dicey part of this is if/when a tow operator can claim salvage. Then it's not a matter of paying for a couple of hours of time. A salvage claim can be hefty on an expensive boat.


At times like that, it's good to have an aggressive insurance company.



Over the years, I've heard occasional stories about tow operators claiming unwarranted salvage on simple sand groundings, as someone mentioned above. (I sail in Florida; most groundings are on sandbars.)


The worst was many years ago, when I kept my sailboat on a mooring at Crandon Park Marina, A young, inexperienced Canadian had bought an old sailboat for a few K and wanted to motor it back home up the ICW.


Well, the Atomic 4 didn't even make it to the Rickenbacker Causeway Bridge. He was drifting when a Sea Tow operator offered to haul him to a marina a short distance away for repairs.


Once tied up, the tow operator claimed salvage, saying the sailboat had been in imminent danger of crashing into the bridge.



The owner had no insurance and little money. Last anyone heard, the marina bill was larger than the boat's value. No idea how it all ended up. I suspect the Canadian just went back home, poorer but wiser.

[Cpt Mark]

I used to be a Towboat USA Captain. 50% of the tows we did on SF Bay were sailboats. A lot of sailors are afraid or don't know how to sail into a slip. It was a skill that was mandatory to be passed when I learned how to sail.

A lot of calls were out of fuel and dead batteries.

As a delivery Captain I required it on all vessels in addition to fuel polishing etc.

On my current boat I have 2 engines so am not concerned about towing.

[Shrew]

Salvage is where they make their real bread and butter. A boat on a sandbar might be a 'soft-tug' which is covered under a towing plan. However, you'd be surprised how many things that look like a soft tug, get coded as a salvage.

Boat not running = Tow

Taking on Water = salvage

Pulled of the rocks = salvage

Pulled of the beach = salvage

Unoccupied vessel dragging anchor = salvage

Unoccupied vessel adrift = salvage

(Heck sometimes even "Occupied" vessel dragging = salvage)

I would not at all be surprised to see a tow following a collision of allision as a salvage as well.

I had a vessel drag one night while I was in town having dinner. My boat dragged into the guy behind me. The local tow guy (not BoatUS or Seatow), moved me to a mooring and sent me a bill for $4,000.

[Cpt Mark]

Originally Posted by Shrew

Salvage is where they make their real bread and butter. A boat on a sandbar might be a 'soft-tug' which is covered under a towing plan. However, you'd be surprised how many things that look like a soft tug, get coded as a salvage.

Boat not running = Tow

Taking on Water = salvage

Pulled of the rocks = salvage

Pulled of the beach = salvage

Unoccupied vessel dragging anchor = salvage

Unoccupied vessel adrift = salvage

(Heck sometimes even "Occupied" vessel dragging = salvage)

I would not at all be surprised to see a tow following a collision of allision as a salvage as well.

I had a vessel drag one night while I was in town having dinner. My boat dragged into the guy behind me. The local tow guy (not BoatUS or Seatow), moved me to a mooring and sent me a bill for $4,000.

This is very true. Long story short we hit a reef off Pt Conception at night in the middle of a storm. Couldn't sail because of wind/wave direction and in the adrenalin fueled moment I failed to hesitate between forward/reverse and broke the 3 bolts on the V-drive connecting shaft. Hate v-drives.

Got 2 anchors out and miraculously they held us in just the right position to avoid all the rocks around us through the tide cycles. I watched the tide cycles and figured out how to get the boat out. CG rescued us and a few days later it was time to get the boat. This was a big deal, everyone knew about it including TowBoat USA headquarters. I went into the local Tow Boat franchise and met with the owner. Explained the situation and that I'd been a Captain etc. Headquarters said nope. It's a salvage, not paying. He argued that the boat was on anchor, not on the rocks, not taking on water, just can't power out due to mechanical malfunction. Headquarters didn't want to be stuck with that bill, he wanted to be paid for that bill. In the end, headquarters agreed it was a tow. 24 hours at $800 per hour.

[flightlead404]

Originally Posted by Rockinar

Surely Sea Tow is not giving them anything. Great kid, and I gave him a $100 tip. As good as he was, I felt a little bad and was not sure what to tip him or if that was too low.

Is tipping these guys generally expected?

I've used twice in 20 years, never felt I needed to tip, and tbh never was really given the opportunity to.

Not like the hotel bellhop standing around awkwardly after showing you where the toilet is.

[flightlead404]

Originally Posted by boat driver

You get what you paid fir. at 500 plus hours a year operation, it is cheap organized insurance. no fuss

I'm curious how you calculate your # hours of cruising.

Seems like an odd metric to me. Is that hours away from a dock? Time spent in motion?

[Rockinar]

Originally Posted by flightlead404

Is tipping these guys generally expected?

I've used twice in 20 years, never felt I needed to tip, and tbh never was really given the opportunity to.

Not like the hotel bellhop standing around awkwardly after showing you where the toilet is.

He had a sign on the boat that said "Tips appreciated, but not required".

I just know the dude took a whole lot of stress and worry out of my day and made it easy for me when I was up against the wall and time running out, so I gave him a tip when I had to sign for the tow.

He did a lot more for me than the three mechanics that promised to come fix my boat but never showed up and stopped answering my calls.

[Happ]

Originally Posted by Chotu

That’s how.

The average person never needs a tow at all.

After approximately 4.5 years, every person with a membership has paid for their $800 tow and the vast majority never even use it.

I don’t subscribe to these services and never will given I have a sailboat.

2 forms of propulsion on a monohull plus a dinghy.

On my catamaran, 3 forms of propulsion plus a dinghy.

I’ve had 2 different “call Sea Tow” events in the past decade. One was on the monohull I had for a bit. My hydraulic steering unexpectedly got too low to work and I didn’t have enough replacement fluid aboard. This happened with a ferry bearing down on me of course with all sails up. I found out I had no steering when I went to make a manual helm correction to avoid the ferry. Had to call a securite to avoid getting hit. The hydraulic pump of the autopilot was able to control the boat to a degree on what fluid was left and I balanced the sails to make my way to a spot that was reasonable to anchor about an hour and a half away. Dropped anchor and took the dinghy in to secure some fluid. Poured it in, bled the system and went on my way the next day.

The other was a fuel pump that went bad on my catamaran. I did not have a spare aboard and didn’t know this was an unreliable model. This killed the engines in the ICW around Galilee in Florida if I remember correctly. No rig on the boat yet, so that was that. However, it was a very windy day and (get this) we did 3-4 knots with no rig and no engines, just steering the boat downwind through all the bridges until we got to a suitable anchorage an hour or so later. My boat has very little resistance in the water with the engines withdrawn into the hull. It was hard to “sail” over to the side of the icw with the spot I wanted to anchor, so I launched the dinghy and pushed the boat over to where I wanted it to be for anchoring. Went ashore and got a new fuel pump.

Sea tow? No thanks.

Unless you have a single engine powerboat, there is always a way.

PS: sea tow isn’t in the towing business. It’s in the insurance business.

Sea Tow is in the Insurance business for sure. A good friend was going down the East Coast when he ended up on a shoal. He called Sea Tow to have him pulled off. When they showed up he was handed a “Salvage Contract” which he refused to sign. After a bit of a discussion they pulled him off the shoal and he went on. A year later he received a letter from his insurance company that they settled for $5,000 for the Salvage Claim that had been put on his boat! They are 21st century pirates. The problem is its to cheap not to have them but you run the risk of an insurance claim which could lead to insurance issues in the future!

[Chotu]

Originally Posted by Happ

Sea Tow is in the Insurance business for sure. A good friend was going down the East Coast when he ended up on a shoal. He called Sea Tow to have him pulled off. When they showed up he was handed a “Salvage Contract” which he refused to sign. After a bit of a discussion they pulled him off the shoal and he went on. A year later he received a letter from his insurance company that they settled for $5,000 for the Salvage Claim that had been put on his boat! They are 21st century pirates. The problem is its to cheap not to have them but you run the risk of an insurance claim which could lead to insurance issues in the future!

True.

I guess it all comes down to a complex formula that factors in your appetite for risk, your individual skills, your prior history sailing, etc. It’s the same for auto and motorcycle insurance. Sea Tow is definitely just another type of insurance.

Me? I will stick with my track record as an indicator of what risk I pose.

Boats: 30 consecutive years of ownership and sailing, having slept about an equal number of nights at anchor as on land. No situation I couldn’t get out of myself. So, not much risk. No need for Sea Tow insurance.

Cars: 34 years of driving without a single accident of any kind, though I have avoided a few. Also low risk. No need for that insurance.

Motorcycles: 40 years of riding (with some big gaps) and no accidents at all. Again, low risk and not in need of insurance.

I have a hyper vigilance when I’m in control of a moving vehicle. A 360 degree continuous scanning. I’m a perfectionist when it comes to this stuff and that includes conservative navigation on boats that makes sure I don’t touch the bottom. Otherwise, there is nothing that can happen that sails, an engine and an anchor/dinghy can’t get you out of. (Other than sinking or fire)

So I don’t worry about towing insurance.

I think most people just don’t want to deal with the challenging situation of having something go wrong while underway. I just deal with it. Much easier to call sea tow though.

[hpeer]

I have heard that Sea Tow and Boat US have different methods to compensate the service provider.

One gets a fixed amount per year while the other gets paid for each service call.

We have Boat US and have used it a few times. One tow was 10 hours, another was 4 hours.

I will never be without again.

[rslifkin]

I carry BoatUS. My insurance also has a tow endorsement, but without paying extra, the cap on it is pretty low (something like $1000). No SeaTow in this area.

Realistically, in its 36 year life (including previous owners), my boat has been towed exactly once. And it was for an electrical issue that could no longer readily occur based on electrical changes that have been made. I carry the membership anyway, as some places give discounts to BoatUS members, it gets me the West Marine rewards (for what little shopping I do there), and it's pretty cheap.

And honestly, I don't mind paying for it even if I never need it. It helps make sure there's a tow boat in the area for all of the idiots with poorly maintained small boats, meaning I'm less likely to have to deal with towing one of them in (which has happened occasionally anyway), and it keeps the local sheriffs and USCG boats freed up for more important stuff.

[01kiwijohn]

Originally Posted by Rockinar

Got my first Seat Tow cause a bad transmission. Was thinking of risking it and making a run for the boat yard with the malfunctioning tranny and was super stressed. I had to be out of the marina in 24 hours with no idea how I was gonna make it. Decided to call Sea Tow and have them pull me over there. Best decision and $175 investment I ever made. Took 100% the stress off me. I was bow into a tight slip in a tight marina and he got me out no problem and into the tight boat yard into the haulout sling no problem and no stress at all. I just sat there and he did 95% of the work. I just had to steer a little on the way over.

He said that 40 minute tow without the membership would have cost me almost $800. Got me thinking. Do they just make money on people without the membership? They're a franchisee as I understand. Surely Sea Tow is not giving them anything. Great kid, and I gave him a $100 tip. As good as he was, I felt a little bad and was not sure what to tip him or if that was too low.

As long as you get towed once every 4 years, it's a good deal.probably not for most of us.

[Shanachie]

Originally Posted by Chotu

Me? I will stick with my track record as an indicator of what risk I pose.

Boats: 30 consecutive years of ownership and sailing, having slept about an equal number of nights at anchor as on land. No situation I couldn’t get out of myself. So, not much risk. No need for Sea Tow insurance.

Cars: 34 years of driving without a single accident of any kind, though I have avoided a few. Also low risk. No need for that insurance.

Motorcycles: 40 years of riding (with some big gaps) and no accidents at all. Again, low risk and not in need of insurance.

No insurance at all is a bad idea, no matter how careful you are, unless you are judgment-proof because you have no assets.


From the numbers in your post, you are close to my age. That increases the chance of a senior moment, a brief lapse that can be enough to cause big problems. Face it, we aren't immortal.



Where I live in Florida, you wouldn't be able to drive a car or motorcycle without at least minimal insurance. But even those policies are junk. One unlucky day and you're living in a cardboard box or trailer home for the rest of your life.

[capt jgw]

Don't know about SeaTow, but I worked part time for a TowBoatUS operator for a while. For non-members, we took a CC number and billed them just like any other business would. For members, we submitted the bill to Boat US. I wasn't involved in the business end, I just drove the boat on occasion, so I don't know if the pay was the same.

[R Hutcheson]

What I have been told is it varies greatly depending on the size of the area they are assigned. In San Francisco Bay where they have lots of members, they make most of their income off the membership fees. However in other areas where they have less members, Key West for instance, they have to make up for it by charging much higher fees when they actually perform a tow. This is completely third hand information, but was provided to me by a professional captain, who was warning me to avoid Sea Tow and use Tow Boat US in the event I needed help while in Key West.