Liability only or full coverage

[rmlarson1098]

Originally Posted by BobHorn

Getting ready to renew our boat policy and thinking about going with liability only. Lived aboard a sailboat for six years and cruised down to the Virgin Islands and up to Maine. Owned a aft cabin trawler for five years. Never had a claim on either one. So, do we need collision and comprehensive?


Do you have liability only or full coverage?



Bob

Liability only for us, but I have to say it was difficult to find just liability on our older, early 80's sailboat. We'd like to find coverage for salvage also but have been a bit spooked over the struggle just to buy a modest policy.
We mostly stay out of marinas, carry strong ground tackle, and are all around conservative sailors. We even got rid of the propane and went with kerosene, to the distress of pretty much whoever is cooking. To say that we can 'afford to lose the boat' is true, I guess; she's a modest yacht. But we think that attitude is a little cavalier. We could live with the loss, I know, and of course saving lives comes first, (the rest is just stuff as they say) but our sailboat is our baby, and we would do all that we could, short of dying, to save her. IMHO fully-insured folks are more likely to 'let the insurance company take care of it' when things get really tough. And I know I'll probably catch hell for saying that!
You might find a 'liability only' policy more easily than we did, as you're clearly far more experienced mariners. I'm not sure why it's so tough to just pay for liability, when such a simple policy must greatly reduce the insurance company's risk. Good luck to you!

[jmastal70]

Let me begin by saying I am not a salesman or spokesperson for insurance. Ages ago I did sell life and health ins. Before figuring out I am not a salesman. Then I got into the commercial claims end of the business, eventually in the legal liability part, where we loved people like you. We thought the Murphy from “Murphy’s Law was an optimist. Just when all seems well is when crap happens. Relish the years that you didn’t “need” property damage coverage. The real question is can you afford a total loss without it? Remember that many policies depreciate valu of the hull to a “ constructive total loss” at about 80% of the current value of the boat: just another consideration. After you consider your deductible( maybe 10% or 5-10K), can you feel comfortable holding the rest of the bag? If not, and your wife doesn’t mind not having.dinner out as often as you do now, you’re good. If not, . . .well, you know

[barnakiel]

In our case the age is not the issue but the value is.


They ask me how much the boat is worth, to which I respond fully loaded 15k. Next thing I see is that look, you know, like I did not belong.


;-)


Last time I asked I got quoted 5% boat insured value but only if I insured to 25k minimum. (Is asking your potential client to insure higher NOT a crime?)



I think 5% is a rip off. Every 20th boat sinks or what?

b.

[Paul L]

Originally Posted by Mike OReilly

Actually, my perception is solely based on actual data on accident rates. I don’t put much stock in anecdotal evidence, mine included.

Actual data for all sailboats, for all cruising boats, for boats cruising in your area, for cruisers that cover large areas, ..... ??? None of these are the same. Your chance of being hit by lightning in the Maritimes is extremely low. The chance of being it by lightning in Panama is very significant. So overall averages, aka actual data, tells you little about a particular cruisers risk.

[waterman46]

Originally Posted by Paul L

Not sure how a survey of other peoples insurance coverage is going to help you make a decision. The risk of loosing your boat is there. Only you can decide if you want to own the entire risk or if you want to pay an insurance company to take on most of the risk.

The amount of risk is far less if you only sail around your home waters vs cruising to distant, unknown waters.

Roger rhat. But it is interesting to read others thoughts on the subjecf. I guess if you have a loan on the boat then the lender will always require full comprehensive. In my case I have no loan and can afford a complefe loss (though it would be painful) since the boat value is lower than most of the nice newer boats I see out actively cruising.
With full coverage I was quoted about $4K. 1M liability only was $1200.

Guess I will spend the savings on beer!

[bobnlesley]

Originally Posted by Mike OReilly

...people report not being able to get insurance for older boats, while others of us have never had a problem. My boat was built in 1977. My previous boat dated back to 1974. I’ve never had any problems getting insurance here in Canada. It has never been an issue.

What gives? What’s the reason for the difference? Is it location-based? If so, which locations?

Most likely cruising 'range' when we crossed the Atlantic in 2012/12 we'd no problems with full coverage just two-handed but we have met/heard from several yachts subsequently who've been told their boats are 'too old' (usually over ten years from new) to get comprehensive cover on ocean crossings.

We're down to 3rd party/liability cover anyway: Sailing in the Mediterranean we were paying about 1.5% of insured value with a £250 excess/deductible but when we came to the Atlantic crossing, our insures wanted 3% and a £2500 deductible; given general perceptions (including our own at that point) as to the danger/risk in sailing across oceans, we thought the price hike was 'fair enough'. A year later just island-hopping up the Caribbean, we discovered that this 3% (and rising) with a huge deductible was going to be applied 'until you return to UK/Mediterranean waters'. Given the type of sailing we were now intending, we no longer thought the quoted premium and deductible were 'fair enough' - I can do an awful lot of repair work before I ever reach the £2500 excess! - and instead switched to a 3rd party liability policy. Our decision was aided by the fact that by then we'd discovered just how cheaply - compared to European prices - you could buy quite reasonable sailboats in the southern Caribbean; the quoted insurance premium whilst equating to 3% of our boat's UK value was probably nearer to 7 or even 8% of what we could buy a comparable replacement yacht for in Trinidad or Grenada, particularly if we were to arrive there with the intention of paying in US$ cash.

An early post on this thread covered it: "If you can take the hit of a total loss, then go for third party but if you can't then it really ought to be comprehensive cover.

Several things have intrigued me over the years with regard to yacht, or more accurately long term/long distance insurance:
Excluding the ocean crossing a European flagged/insured yacht will incur far higher premiums sailing in the Caribbean/Us east coast than they will in European waters, whereas the opposite will be the case for any North American yacht; OK the lateral buoyage is the opposite way around, but that's hardly sufficient reason for insurance brokers in both regions to suggest the other one's inherently more risky - what the market will stand methinks?
More applicable to European yachties, but we've met dozens who've got comprehensively insured yachts in the Caribbean/Bahamas/USA, but no emergency medical/repatriation insurance because it's 'too expensive'. A few years back had a major medical issue whilst in the Bahamas - the insurers flew me to the USA and back twice where the very nice hospital in Miami opened their eye-surgery department especially to treat me on the Easter weekend and eventually the insurers repatriated us to the UK. I have no idea what the final cost of all that was to our insurers, but whilst I could live with the loss of our boat, I know that the cost of that episode would've bankrupted us. Insure your health first and worry about the boat later, the out-turn cost of a medical claim could easily run to many times your boat's hull value.
My final bug-bear is with those yachts who carry no insurance whatsoever. Third party insurance is available at a reasonable price irrespective of your boats value or cruising region - it does surprise me given the litigious nature of the USA, how low the standard policy liability limits are on North American policies; ours is about $10 million dollars and that's pretty 'normal' for a European policy - and you owe it to your fellow yachties to be covered. Again we've met several yachties over the years who've suffered damage from uninsured fellow cruisers, after which the guilty party's pretty much shrugged their shoulders and said "I've no insurance, no money and how are you going to go about sueing me in wherever we are anyway?" That to me is unacceptable behaviour, risking the end of your own 'dream' by not comprehensively insuring your boat's a valid choice - we've made it - but what you're doing is risking everyone elses.

[Mike OReilly]

Originally Posted by Paul L

Actual data for all sailboats, for all cruising boats, for boats cruising in your area, for cruisers that cover large areas, ..... ??? None of these are the same. Your chance of being hit by lightning in the Maritimes is extremely low. The chance of being it by lightning in Panama is very significant. So overall averages, aka actual data, tells you little about a particular cruisers risk.

https://bard.knightpoint.systems/Pub...e/Report1.aspx

It’s a database maintained by the USGC. It purports to include ALL accidents in US waters which cause harm to persons, or result in more than a few $thousand in claims, going back for 15 years.

Accepting that no dataset is going to be perfect, any reasonable look at these numbers will show the risk is very low for cruising-types of boats. No… it’s not the world. But the USA has something like 14 million registered boats, and likely 10x as many unregistered. It’s a pretty good sampling of what goes on out there.

Play with it. It’s interesting, and fun (if you like data). You can drill down to specific states, or boat types, or accident causes.

Originally Posted by jmastal70

...The real question is can you afford a total loss without it? ….

This is what irks me about insurance, and how it is sold. This is the question you want the potential customer to focus on if you are selling the product. It is based on fear, and ignorance. This question only applies to people who have zero tolerance for risk. And none of us live like that — if we did we’d never leave the house.

In reality we all accept some level of risk in life. Your risk tolerance is not the same as mine, which is why this kind of insurance question can only be answered individually. But simply saying “can you afford the total loss” ignores the whole other aspect of risk assessment, which is the likelihood of an event occurring.

Being hit by a meteor would be very bad, but none of us buys meteor impact insurance, even though the risk is not zero.

[Mike OReilly]

Originally Posted by bobnlesley

Most likely cruising 'range' when we crossed the Atlantic in 2012/12 we'd no problems with full coverage just two-handed but we have met/heard from several yachts subsequently who've been told their boats are 'too old' (usually over ten years from new) to get comprehensive cover on ocean crossings.

I don’t doubt it is a real thing Bob. It’s just that I’ve never encountered such a thing, and don’t know anyone (personally) who has. Yet it is a common reality here on CF.

Originally Posted by bobnlesley

... what the market will stand methinks?

As with all other products or services sold in a market economy, I suspect THIS has more to do with setting the price than anything.

Originally Posted by bobnlesley

…Insure your health first and worry about the boat later, the out-turn cost of a medical claim could easily run to many times your boat's hull value.

Probably good advice, especially in areas where medical costs are very high. I would not think of stepping across the border to the USA without additional medial insurance. Risk is too high. But in many other places in the world, it can be quite affordable.

Originally Posted by bobnlesley

My final bug-bear is with those yachts who carry no insurance whatsoever. Third party insurance is available at a reasonable price irrespective of your boats value or cruising region - it does surprise me given the litigious nature of the USA, how low the standard policy liability limits are on North American policies; ours is about $10 million dollars and that's pretty 'normal' for a European policy

Yes, 3rd-party liability insurance is pretty cheap IF you can get it. I’ve not tried yet, but much like the “boat too old” category, I’ve heard from a lot of people who have had a hard time getting liability-only insurance. I suspect it’s b/c there’s not much profit for the insurance companies, or the brokers, to sell such a thing.

Funny think about the liability standard coverages. In the USA it seems very low; something like $300 to $500 thousand, yet as you say this is the place where if you stub your toe you’re encouraged to sue. In Canada the standard liability coverage is $3-5Million.

Another thing that is standard in Canada, and very cheap, is having coverage for uninsured boaters. If you really think the risk of being hit by an uninsured boater is high, then I recommend you make sure you have this additional coverage.

[Paul L]

Originally Posted by Mike OReilly

https://bard.knightpoint.systems/Pub...e/Report1.aspx

It’s a database maintained by the USGC. It purports to include ALL accidents in US waters which cause harm to persons, or result in more than a few $thousand in claims, going back for 15 years.

Accepting that no dataset is going to be perfect, any reasonable look at these numbers will show the risk is very low for cruising-types of boats. No… it’s not the world. But the USA has something like 14 million registered boats, and likely 10x as many unregistered. It’s a pretty good sampling of what goes on out there.

Play with it. It’s interesting, and fun (if you like data). You can drill down to specific states, or boat types, or accident causes.



.....

Interesting database. If I understand it correctly it only includes incidents that resulted in injury or death within the US. So it doesn't tell you much about financial issues that insurance is there to cover. Either way, the averages in the US really have very little to do with the risks on a distance cruising boat. If they did, then I doubt my insurance would cost 3-5x for Indian Ocean coverage vs US coastal.

[Mike OReilly]

Originally Posted by Paul L

Interesting database. If I understand it correctly it only includes incidents that resulted in injury or death within the US. So it doesn't tell you much about financial issues that insurance is there to cover. Either way, the averages in the US really have very little to do with the risks on a distance cruising boat. If they did, then I doubt my insurance would cost 3-5x for Indian Ocean coverage vs US coastal.

Of course it is directly related to financial issues … injury or financial loss is what triggers a compensatable loss. This is what the database tracks.

I’m not in any way saying insurance is not a good idea. Just judge it against the actual risk you’re trying to mitigate. Some of us do face greater risks than others. But for the vast majority, the risks are low.

[Paul L]

Originally Posted by Mike OReilly

Of course it is directly related to financial issues … injury or financial loss is what triggers a compensatable loss. This is what the database tracks.

I’m not in any way saying insurance is not a good idea. Just judge it against the actual risk you’re trying to mitigate. Some of us do face greater risks than others. But for the vast majority, the risks are low.

When I select the by accident event every category lists injury or death, so I assumed non-injury accidents were not in the database.

Yes, for the vast majority boats risks are low. My point is that the coastal US risks are not very useful for other types of cruising. Cruisers are not the vast majority

[Mike OReilly]

Originally Posted by Paul L

When I select the by accident event every category lists injury or death, so I assumed non-injury accidents were not in the database.

Yes, for the vast majority boats risks are low. My point is that the coastal US risks are not very useful for other types of cruising. Cruisers are not the vast majority

Paul, you can drill into boat types and sizes to get to “cruisers” only. Cruisers are not the majority almost anywhere.

I’d encourage you to provide additional datasets. I’ve never found a better one, but I’d welcome others. Anecdotal evidence is useful, but far too biased and skewed to base much on.

[Greg K]

Third party liability is not necessarily a "personal choice" In the EU, for example, it is compulsory. It is also relatively inexpensive. For example, my annual cost is 0.3% of the declared value of the boat. Being compulsory and inexpensive makes sense on both counts to me, and I am happy to oblige and pay the small annual cost with the knowledge that if another boater causes damage to my boat through no fault of mine, I will be compensated for the damage or loss without having to go through the hassle of legal proceedings. That is as it should be I believe, and anything extra is simply a bet as others have mentioned already. For some individuals that bet on full coverage does pay out but, as in all organized gambling, the insurers stay in business because generally the house wins.


My completely unsubstantiated gut feeling is that most individual full coverage policies are grossly overpriced for the actual risk associated with full coverage because underwriters need the bigger margins to subsidize their charter business policies in which volume generally makes up for the lower margin spreads.... until the next major hurricane hits ( and YOUR insurance goes up).


Greg

[boatman61]

I generally opt for Liability Only to stay within the minimum legal requirements required by the vast majority of Ports and Marinas around the EU and places I may sail to.
On top of this I add Injury and Illness Cover for myself and crew and Theft Insurance, all with Panteanius.
Total is less than £250/yr.

[valhalla360]

Originally Posted by Mike OReilly

It’s interesting how some people report not being able to get insurance for older boats, while others of us have never had a problem. My boat was built in 1977. My previous boat dated back to 1974. I’ve never had any problems getting insurance here in Canada. It has never been an issue.

What gives? What’s the reason for the difference? Is it location-based? If so, which locations?

Particularly for older inexpensive boats...there just isn't enough profit for them to bother fine tuning the rates.

Result:
- Some just don't service the market segment.
- Others it's such a small part of their business, they put in a hefty premium and take the risk...even if they are wrong, it's small enough that it doesn't matter much to the larger company but not enough statistical data to show one way or the other.