Thoughts about going uninsured?

[Chotu]

Originally Posted by Benz

I carried liability when marinas/storage yards required I get it. It was not super-expensive, and I might carry it again when in litigious waters, though grudgingly. Thing is, I usually cruise where liability insurance wouldn't cover anyway: my last cruise to Greenland and the NWP was uninsured because no one would underwrite the trip.
Also, in 30+ years at sea, I've never dinged another boat nor incurred any damage that would warrant a claim; I keep my boat on a mooring away from other boats, and I know how to use it safely. I follow COLREGS, so the chances of something being my fault are slim. No doubt if I ever dinged someone, the underwriters would find a way to weasel out of paying anyway: it's their business model to do so.

I definitely agree with this one.

Who you are and what your experience is factors into this.

I’m approaching 35 years now of continuous boat ownership. I have been very active with my boats as well. Cruising up and down the East Coast of the United States basically. A little bit of Caribbean a little bit of Canada.

Many of those years have been spent full-time on the boats.

I have been required to carry insurance when I had loans on boats years ago. I have been required to carry insurance on boats recently as well, thanks to marina policies. So I’m currently insured still.

When I do my risk calculus, I have to factor in the fact that in 35 years I have had the same record as Benz. Zero contact with other boats, zero groundings, zero environmental catastrophes, nothing to bother an insurance company about.

Some of my worst losses other than hurricanes were theft. Dinghy and outboard. Bicycles. Anchor. Kayaks. All stolen. Gotta love Florida. All of this was it under what you would have as a deductible. They were all stolen at different times.

The boat I built got creamed by one of the hurricanes when the marina failed. That was a little rough. But I still think I came out ahead. Big mistake was trusting the system. Thinking that the marina would be safe enough in a hurricane. That is definitely nowhere near true. That’s the most dangerous place you can keep a boat.

But when I do my risk calculus I have to count some other stuff too.

Motor vehicles. I have been driving for 36 years. Zero accidents. I have avoided many. No insurance claims. No contact with other cars. Other than them plowing into my parked vehicle in Boston when I wasn’t in it. That was a beautiful one. Brand new car. They plowed right into the back of it and drove off. but I was inside sleeping so I didn’t know until the morning.

Anyway, no type of motor vehicle accident. Nothing.

Then we get to motorcycles. Zero accidents. Nothing.

Thanks to that driving record I’m not even required to carry motor vehicle insurance. I bet that’s going to stir up a hornets nest. Ha ha. But that’s how it works in my state.

So, I don’t find boat insurance to be very necessary at all. Other than fire, you can always fix whatever happens. For a lot less money than paying those premiums.

[rslifkin]

That low risk if you're a bit careful is exactly why liability coverage is fairly cheap in most cases. The potential payouts are large, but they happen pretty rarely. Definitely a very different game than hull insurance where events like hurricanes can lead to mass payouts.

[Mike OReilly]

Originally Posted by Bobby Lex

I'm not weighing in on the "who's a bigger idiot" scrum going on here....

I apologize. I was using the words of the previous poster to make a point. It's not my normal form of discourse.

Originally Posted by Bobby Lex

But I do want to point out that you left out one other important consideration, Mike. Social responsibility. There are many many folks out there who have been victimized by uninsured or underinsured persons. Persons who only considered the "risk and cost-benefit" to themselves. But didn't bother to consider what financial harm their actions might do to someone else.

Yes, it is a consideration. One should always strive to limit the harm one does to others, and to make another whole should your negligent actions be the cause of someone else's damage. I don't think anyone here has suggested otherwise.

The point I was trying to make with the "idiot" ricochet was that no one can cover all possibilities. All we can do is take reasonable precautions and actions.

[Mike OReilly]

Originally Posted by rslifkin

That low risk if you're a bit careful is exactly why liability coverage is fairly cheap in most cases. The potential payouts are large, but they happen pretty rarely. Definitely a very different game than hull insurance where events like hurricanes can lead to mass payouts.

Exactly right. Liability insurance is quite cheap because the risk is low. This is why I think it is generally a good deal for cruisers to have.

[wholybee]

Originally Posted by GreenWave

No in the case where you can’t even afford liability insurance you should keep your boat parked in your backyard. Or are you saying the more wealthy are obligated to pay for the shortfalls of the less wealthy?

This could go down a deep argumentative hole. Should wealthy people pay for medical care for those that can't afford it? Should poor people be deprived of rights enjoyed by wealthier people? That sort of questioning could go on forever without agreement or answer.

Accidents happen. Sometimes someone is a fault. But we can't be expected to carry insurance for every accident that might happen. Not for every action that we might take that might injure another party. We have car insurance because it is required by law. We have homeowner's insurance because lenders require it (to protect them not us). But renter's insurance is often not required. A guest gets injured in your home and wants you to pay the medical bills. Are you immoral because you didn't buy renters insurance to cover the medical claim? How many people in this forum have rented an apartment or house and not purchased insurance? Are we all immoral because of that? If we are too poor to pay for it, are we obligated to never invite guests over? What if you are riding your bike and run into someone, seriously injuring them. Did you have insurance for that? I've not even heard of bicycler's insurance before. Has ANYONE in this forum purchased insurance for riding a bicycle? Because I know someone with a painful lifetime disability because she was run over by a careless bicycler, she would sure like some compensation for her lifelong pain and 100's of thousands of dollars of medical bills. So, do we need to keep our bicycle in the backyard next to our boat?

Everyone has a choice of what insurance to purchase based on risks they are willing to take. It is unfortunate that not everyone can or will buy insurance. But I don't think it is fair or right to assign morality to it, because we simply can't insure against everything, nor does anyone really want to.

Wealthy people absolutely DO spend money and put effort into protecting their wealth that poor people do not. Much of that is in the form of insurance policies. If you are that worried about what an uninsured person might do to your boat, buy your own uninsured boater insurance. Simple as that.

FWIW, I *AM* currently fully insured, but I have not always been, and the time will come when I again will not be able to. I always would like it, but the reality is that it isn't always going to happen.

[GreenWave]

Originally Posted by wholybee

This could go down a deep argumentative hole. Should wealthy people pay for medical care for those that can't afford it? Should poor people be deprived of rights enjoyed by wealthier people? That sort of questioning could go on forever without agreement or answer.

Accidents happen. Sometimes someone is a fault. But we can't be expected to carry insurance for every accident that might happen. Not for every action that we might take that might injure another party. We have car insurance because it is required by law. We have homeowner's insurance because lenders require it (to protect them not us). But renter's insurance is often not required. A guest gets injured in your home and wants you to pay the medical bills. Are you immoral because you didn't buy renters insurance to cover the medical claim? How many people in this forum have rented an apartment or house and not purchased insurance? Are we all immoral because of that? If we are too poor to pay for it, are we obligated to never invite guests over? What if you are riding your bike and run into someone, seriously injuring them. Did you have insurance for that? I've not even heard of bicycler's insurance before. Has ANYONE in this forum purchased insurance for riding a bicycle? Because I know someone with a painful lifetime disability because she was run over by a careless bicycler, she would sure like some compensation for her lifelong pain and 100's of thousands of dollars of medical bills. So, do we need to keep our bicycle in the backyard next to our boat?

Everyone has a choice of what insurance to purchase based on risks they are willing to take. It is unfortunate that not everyone can or will buy insurance. But I don't think it is fair or right to assign morality to it, because we simply can't insure against everything, nor does anyone really want to.

Wealthy people absolutely DO spend money and put effort into protecting their wealth that poor people do not. Much of that is in the form of insurance policies. If you are that worried about what an uninsured person might do to your boat, buy your own uninsured boater insurance. Simple as that.

FWIW, I *AM* currently fully insured, but I have not always been, and the time will come when I again will not be able to. I always would like it, but the reality is that it isn't always going to happen.

I agree with much of what you wrote. There is a wee bit of a difference between house insurance (our home generally don’t drag anchor) and a boat. Yes one can and should have some umbrella liability policy lest they be sued by their money grabbing neighbor for tripping on a tree root… anyways, let’s just agree to be responsible for our own mistakes.

[Tedd]

I would keep the liability coverage.

I'd be nervous about not having hull coverage at my current boat's value relative to my net worth. But my last boat was uninsured and I was totally comfortable with that because I could easily absorb the loss.

As a reference point, I've been insuring motorcycles for forty years and I have always gotten the minimum legally allowable coverage. Every motorcycle I ever owned could have been stolen, crushed by a tree, lost in a fire, or written off in an accident and I'd still be ahead. It's all in the math.

[Dockhead]

Originally Posted by Benz

I carried liability when marinas/storage yards required I get it. It was not super-expensive, and I might carry it again when in litigious waters, though grudgingly. Thing is, I usually cruise where liability insurance wouldn't cover anyway: my last cruise to Greenland and the NWP was uninsured because no one would underwrite the trip.
Also, in 30+ years at sea, I've never dinged another boat nor incurred any damage that would warrant a claim; I keep my boat on a mooring away from other boats, and I know how to use it safely. I follow COLREGS, so the chances of something being my fault are slim. No doubt if I ever dinged someone, the underwriters would find a way to weasel out of paying anyway: it's their business model to do so.

My liability insurance with Pantaenius was valid in Northeast Greenland where my hull insurance was not (up to 200m above the Arctic Circle was the limit for that). But the liability insurance was not needed there -- there was literally no one up there you could be liable to, unless polar bears start suing people. Whereas the hull insurance -- rocks, no charts, ice . . . I really wished I had had it.


One remark, however: "I've never had an accident in x years, therefore it can't happen to me" is not a "risk calculation". It's a fallacy. In fact, "it can't happen to me" is probably the most famous of all famous last words. Accidents happen, and when you least expect it. Can you afford to compensate the other for damage you might cause? Can you afford to lose your house?


I wouldn't take even a very small risk of losing my house (or my business, or my retirement funds) for the sake of a hobby.


Nor is it true that insurance companies never pay out. They pay out billions of claims every year. Some of them, like Amica, are even cooperatives which operate on a non-profit basis. I had only one claim against my hull insurance in my decades of boating -- an uninsured fisherman smashed into my boat in the middle of the night while I was at anchor in the Solent. Pantaenius paid out in full, quickly, and cheerfully; in fact the boat was better off afterwards than before the accident. The Pantaenius claims people I dealt with were absolutely fair, reasonable, helpful, and pleasant.



My father's boat was struck by lightning. His insurance company, likewise, paid out without the slightest hassle, and my father ended up with a completely rewired boat with all new electronics.


Most of the problems with insurance payouts are with dodgy companies. If you go only with the cheapest, don't hope for the best outcomes.



Some people make the mistake of valuing insurance based on the calculation of risk as a percentage times the cost. That's not what insurance is for. Insurance doesn't magically reduce the cost of accidents. It spreads out the cost of disasters among the larger community so that the rare disaster doesn't bankrupt you, and spreads out the cost of less than disastrous accidents over time. Naturally, it is somewhat less beneficial for very careful boaters, who have few claims, and somewhat more for idiots, who have more, but that is the nature of the beast. It is still extremely valuable even for the most careful and skillful, and I would never go without it, unless we're talking about hull insurance on a boat I could afford to self-insure, like my lake boat, but I do have liability insurance even on that.

[Benz]

@dockhead I never said "It can't happen to me because it hasn't yet" Why do all the insurance enthusiasts go straight there? I say: it hasn't happened yet, and I'm comfortable with the odds that it won't. This is a far different mindset, and it's disingenuous to suppose that when we assess risk based on experience we're automatically thinking something completely different.

Think what you like, fear what you like, but don't ascribe thoughts to others who have their own thoughts based on their own experience.

If you've had good luck with insurance companies, I congratulate you--many have had miserable experiences with them. Our milegaes vary.

[Chotu]

Exactly. Nobody is saying it can’t happen to me. But there are certainly people it is less likely to happen to. And that does play into risk assessment.

If it didn’t, everyone’s insurance premiums would be exactly the same dollar amount per dollar insured. And they are not. There are many factors that go into determining the risk of an individual. Specifically, past accident history. That determines your rate.

[Mike OReilly]

Insurance is indeed a pooled risk approach. Part of the problem we face though, is that it's not just risk that drives rates for cruisers. It's the fact that insurance companies are profit-driven (as all for-profit entities are). But the bigger problem seems to be decreasing competition in our market.

True capitalism works well when consumers are fully informed, and there is sufficient competition and choice in the market. Neither of these things are true in today's boat insurance world.

Almost no one who owns a cruising-level boat cannot afford current insurance rates. What people are chafing over is the value-for-money calculation. As rates go up, and restrictions increase, boaters are rightly questioning the value of hull insurance.

This is one of the ways the system (the market) is supposed to work. Normally, this would send a signal to suppliers that their rates are too high. But the problem we face is there are so few underwriters, they can increasingly ignore this signal. In effect, the market is operating more like a monopoly.

All this is to say, it is entirely reasonable for people to question the value proposition when it comes to insurance. The value is measured against a personal risk assessment, and balanced against one's own risk tolerance.

[Fore and Aft]

I think it would be interesting to hear from a self-insured person that has had to pay out for repairs to another vessel and see if they still believe in self-insurance? I only ask as I have been involved with two self-insured claims where the uninsured owners have had to pay out for repairs on another vessel. Both times it got nasty as the damaged boat owners demanded and expected their boats to be returned to the same condition pre accident. Both uninsured owners had unrealistic ideas about the costs involved and had been trying to get out of the repair bill as cheaply as possible. One uninsured owner was even wanting to do the repairs himself. That idea was vetoed as bad idea all round.
Personally, I don't have a lump sum in my bank to pay out any damage I cause to another vessel, so I pay insurance to cover me.
Here's a Meme for all the perfect boaties chipping in on this thread.

Cheers

[Simi 60]

Originally Posted by Dockhead

The Pantaenius claims people I dealt with were absolutely fair, reasonable, helpful, and pleasant.



My father's boat was struck by lightning. His insurance company, likewise, paid out without the slightest hassle, and my father ended up with a completely rewired boat with all new electronics.

Never happens with pantaneus here

I had a lightning strike on a previous boat, absolute shitfight with them getting a reasonable result

This from there current PDS

4. Deductions for New For Old:
The insurer’s liability for Partial Loss is always limited to that set out at §3.3. The Insurer shall not be liable under This Insurance for
the cost of new parts if reasonable second hand or reconditioned replacement parts are available to reinstate the Vessel as nearly
as is reasonably possible to its pre-incident condition. If reasonable second hand or reconditioned replacement parts are available
then a new for old deduction will not be made in respect of those parts.
For Partial Loss claims, the Insured has the option to select cover either with or without a deduction due to the age of any part
repaired or replaced with a new part.

4.1. New for Old Cover not stated on the Schedule
If New for Old Cover is not stated on the Schedule, in the event of Partial loss, the following deductions will be made
from the claim settlement in respect of parts or materials where the part which is repaired or replaced was - at the time
of the incident, more than: 2 years old – 30% deduction
10 years old – an amount proportional to the reasonable consumed service life of the part taking into account the age
and condition of the part. The deduction will not be applied to labour costs, or to the repair of the basic Hull and deck
structures of the Vessel. The Insured may provide documentary evidence to prove the age of the part. If the Insured is
not able to do so the part will be deemed to be at least 10 years old.

4.2. New for Old Cover stated on the Schedule
If New for Old Cover is stated on the Schedule, no deductions will be made in respect of parts or materials replaced
with new parts when no reasonable second hand or reconditioned replacement parts are available.

[RaymondR]

After about fifteen years of investigating claims as a consultant my sympathies shifted from the insured to the insurer.

Latest incident on the coast I cruise. Skipper travelling south in strong SE winds in a cat loses one engine and instead of going back 7 nm to a perfectly secure anchorage drops an anchor on a scoured bottom, screams for help and is helicoptered off. Boat drags anchor onto shore and becomes a total loss. Owner now trying for agreed value compensation.

[boatpoker]

Originally Posted by RaymondR

After about fifteen years of investigating claims as a consultant my sympathies shifted from the insured to the insurer.

Latest incident on the coast I cruise. Skipper travelling south in strong SE winds in a cat loses one engine and instead of going back 7 nm to a perfectly secure anchorage drops an anchor on a scoured bottom, screams for help and is helicoptered off. Boat drags anchor onto shore and becomes a total loss. Owner now trying for agreed value compensation.

I quit that work in disgust years ago as the majority of claims were either false or greatly exaggerated and the majority were paid out if it looked like the claimant might get a lawyer even when I proved the claim was faked. Up to a certain dollar level its cheaper for them to pay than to fight.

Insurance is no different than going to a casino, You bet you will have a bigger claim than the cost of insurance and they bet you won't.