Insuring a 40 year old yacht

[KerryK]

I have been reading this forum and other places about the woes of marine insurance. I am in the process of buying a 40yo 55' solid grp ketch. and finding insurance "interesting". Whist having plenty of sailing experience it has been about 20 years since I last owned a yacht, and that was smaller and cheaper!



My question is, is it worth insuring a 40yo boat for full replacement value ($200K A$)? I am getting quoted for around A$4500/year.


Thanks for any advice on insurance.
Cheers!

[HankOnthewater]

I am with club marine, my cost is about 1.4% of agreed value, similar aged boat.

[chrisr]

bear in mind that you won't be able to use a marina or slipway unless you are insured

of course you may be able to get insurance for public liability only, but i'm not sure who offers that here or whether marinas etc will accept this.

as to whether "is it worth insuring a 40 yo boat for full replacement value", guess this depends upon your personal circumstances and your risk tolerance. i insure stuff i cannot afford to loose, but that's just me.

you do realise this would not be a problem for a younger boat (?), and i presume you considered this issue before deciding to buy such an old boat ?

cheers,

ps : our cat is worth a lot more than 200k, and insurance is under $2000 pa...but we are way less than 40yo !

[Bobby Lex]

Originally Posted by KerryK

My question is, is it worth insuring a 40yo boat for full replacement value ($200K A$)? I am getting quoted for around A$4500/year.

If you are financing your boat, your lender is going to tell you how much coverage you must have, whether you think it's "worth" it or not. You won't have a choice.

Otherwise (i.e. if you are not financing the boat), whether it's "worth" it really depends on two things:

1. Your budget: How much are you willing (or able) to pay for insurance? Because, of course, the higher the coverage, the higher your premium will be.

2. The impact of a total loss of your boat: If your $200K boat sinks, but you only insure it for $125K, are you willing (or able) to absorb a $75k loss?

As with most insurance decisions, it simply boils down to how much risk you are willing to take.

For me, personally, the agreed-upon insurance coverage on my boat is somewhat more than what I paid for it, but less than what it would cost to replace it in today's market. That's the amount of coverage that my wife and I have decided is "worth" it to us. But not everybody's situation is the same as ours.

And not everybody's situation is the same as yours.

Bob

[KerryK]

Originally Posted by chrisr

bear in mind that you won't be able to use a marina or slipway unless you are insured

of course you may be able to get insurance for public liability only, but i'm not sure who offers that here or whether marinas etc will accept this.

as to whether "is it worth insuring a 40 yo boat for full replacement value", guess this depends upon your personal circumstances and your risk tolerance. i insure stuff i cannot afford to loose, but that's just me.

you do realise this would not be a problem for a younger boat (?), and i presume you considered this issue before deciding to buy such an old boat ?

cheers,

ps : our cat is worth a lot more than 200k, and insurance is under $2000 pa...but we are way less than 40yo !

Thanks Chris for the input, I guess my question came about after reading so many stories of insurance companies not paying out, on minor and major claims.
As to the age of the boat - I appreciate that age does play a part but the boat is in great condition, and what I was after a medium displacement blue water capable yacht within my budget. The surveyor could find nothing amiss and was actually impressed!
Cheers Kerry - on land at Lake Mac

[KerryK]

Originally Posted by Bobby Lex

Otherwise (i.e. if you are not financing the boat), whether it's "worth" it really depends on two things:

1. Your budget: How much are you willing (or able) to pay for insurance? Because, of course, the higher the coverage, the higher your premium will be.

2. The impact of a total loss of your boat: If your $200K boat sinks, but you only insure it for $125K, are you willing (or able) to absorb a $75k loss?

As with most insurance decisions, it simply boils down to how much risk you are willing to take.

For me, personally, the agreed-upon insurance coverage on my boat is somewhat more than what I paid for it, but less than what it would cost to replace it in today's market. That's the amount of coverage that my wife and I have decided is "worth" it to us. But not everybody's situation is the same as ours.

And not everybody's situation is the same as yours.

Bob

Thanks Bob, These are the questions I am grappling with, and I with most things go the way you are, but there seems to be so much doubt and cynicism around marine insurers actually paying out.....

Cheers Kerry

[Fore and Aft]

Kerry K it really depends on if you want to stay at marina's and use certain slipways. I don't know any marina's that accept uninsured boats most now want comprehensive insurance. I only know two yards that take uninsured boats.
A few of my clients are not insured but I have no idea what will happen if they have an emergency family medical, etc and have to leave their yacht. The best they will be able to do is anchor and cross their fingers that the boat will be alright.
If you sink or damage an uninsured yacht I have no idea what would happen. Certainly most yards will not touch you.
Cheers

[Rucksta]

Find out what policy the vendor has and the premium.
Make your offer conditional on obtaining suitable insurance.
See if the Vendor can arrange a change of name of Insured.

Premium of $4500 on $200K cover is not the worst deal around nor the best.

[chrisr]

a further thought : you mentioned in yr query whether to insure for 'full replacement value'

i think you will find most (all) insurers will not insure for less. one of the first questions on the proposal will be 'how much did you pay for the boat', and the insurer will pretty much insist on insuring for this value

if you can persuade them to insure the boat for say $100k (ie 50% of the value), the fine print will say that they will pay any claim on that same share

as for insurers paying / not paying claims, it is a bit of a lottery. a lot comes down to the assessor's report...and how hard you are willing to fight. i once spent well over $150k taking one of the main aussie marine insurers to court (over a fairly small claim). we did not get all the claim, but we did get costs...which was highly satisfying !

is your prospective new boat on the lake ? be careful you can get her out the channel !!

cheers,

[Karanga]

ps : our cat is worth a lot more than 200k, and insurance is under $2000 pa...but we are way less than 40yo ![/QUOTE]

Just wondering who you are insured with?
Our boat 15yo is worth approx 3 times that value, and the premium is about 1%

[hpeer]

The other question is what does the insurer require in terms of inspection/survey?

I have had insurance companies require additional surveys unexpectedly and with little warning. I eventually went with liability only thinking I would avoid the survey issue. I am now being told I must have an out of water survey AND all rigging over 15 years old MUST be replace, period. $1,600US/year on a $100,000 boat, liability only. Caribbean cruising grounds, always stored inshore for hurricane season.

The damn surveys are a PITA and can be expensive and its hard to find a decent surveyor. I have had complete idiots who make me do all kinds of stupid stuff, not ABYC required.

I will gladly pay for a competent survey when required, and have done so even when not required but I felt it prudent. The last time I had a very competent surveyor he wanted to talk to the insurance company and argue with them about their requirement’s, that was a fight I wanted no part of.

Bottom line, check what their survey requirements are. They can apparently vary widely.

[roverhi]

My boat is 53 years old and have it insured by Markel for $35,000 with $500,000 Liability coverage required by marina. Over the last few years the premium has increased by more than a $100 a year and is now knocking on the door of a $1,000. We had a current survey when we first insured and had to do an in the water hull survey about 5 years into ownership. Haven't had any survey requirement for the last 7 years, wonder if they forgot about me?? Had to do a separate rig survey to get the mast, rig and sails insured but that was almost 10 years ago.

[KerryK]

Originally Posted by Fore and Aft

Kerry K it really depends on if you want to stay at marina's and use certain slipways. I don't know any marina's that accept uninsured boats most now want comprehensive insurance. I only know two yards that take uninsured boats.
A few of my clients are not insured but I have no idea what will happen if they have an emergency family medical, etc and have to leave their yacht. The best they will be able to do is anchor and cross their fingers that the boat will be alright.
If you sink or damage an uninsured yacht I have no idea what would happen. Certainly most yards will not touch you.
Cheers

Thanks, And I am aware of that and have no intention of not having insurance. just the insured value is what I am questioning.
Cheers

[KerryK]

Originally Posted by Rucksta

Find out what policy the vendor has and the premium.
Make your offer conditional on obtaining suitable insurance.
See if the Vendor can arrange a change of name of Insured.

Premium of $4500 on $200K cover is not the worst deal around nor the best.

Thanks, and I am starting to look at that possibility, think it may be possible for the short term whilst sailing in Oz waters only.
Cheers

[KerryK]

Originally Posted by Karanga

ps : our cat is worth a lot more than 200k, and insurance is under $2000 pa...but we are way less than 40yo !

Just wondering who you are insured with?
Our boat 15yo is worth approx 3 times that value, and the premium is about 1%[/QUOTE]


Thank you, at present I am not yet the owner, hence the questions on insurance Who are you with if I may ask?
cheers Kerry