Cruisers, Where are You "Moored"?

[markpierce]

Originally Posted by Capt Phil

Personally, I do not want anyone providing info on any asset I own to the State of California. They are true blood suckers and even tried to nail me for sales tax on a boat ...

That's for sure. That's for dang sure. The CA Franchise Tax Board operates on the assumption everyone is a tax cheat and will use any minimal shred of "evidence" to claim its tithe.

Where one initially keeps one's boat in California can have a big effect on the sales/use tax because diffferent localities have different tax rates. For instance, by keeping my boat in Vallejo (8.375%) I will save $3,624 in use tax as compared to San Leandro (10.0%).

[markpierce]

My experience has been that the insurance rates depend largely on the value insured, the nature of the vessel and its use, and in what waters the vessel will be operated.

As far as imagined mooring port, I'd select one the most advantageous cost-wise if there is a difference.

[Capt Phil]

For the record, my insurance company was not as interested in where I was cruising unless I was out of country as they were in my experience, qualifications and licenses I held. I believe this was more from a liability risk assessment point of view because as a licensed captain, I assumed a higher level of operating responsibility than a weekend sailor if a mishap occurred. I kept my personal boats primarily in Canada, Washington State and Mexico although during hurricane season south of Ensenada, the insurance company required the boat to be 'moored' in an acceptable 'hurricane hole' like La Paz during the breezy season.
They issued a special personal liability rider for deliveries even though the the owners policy usually covered loss of the vessel. I did considerable research to make sure I had myself and my crew covered in the event an incident occurred that I was involved in even though it was not my fault.
This was brought home to me years ago when at anchor one night, a larger power boat dragged down on my vessel due to wind shift and insufficient scope out on the other vessel. Because I was a licensed captain, the attorney of the other owner claimed I had a primary duty to safeguard both vessels evn though the fault was clearly not mine. Three maritime court hearings later, I was absolved of all responsibilty in the incident but it brought home to me how exposed you are if you have qualifications and experience and the other party is an idiot. Capt Phil

[osirissail]

Originally Posted by gettinthere

Again, this is for insurance purposes. The agent wants to know the mooring port. The agent understands I will be full time cruising. Still wants to establish a mooring port.
...I don't understand why either.

If you talking about Florida as the place you keep the boat most often, the insurance wants to know as they then have add a State surcharge to the cost of the policy.

[gettinthere]

Originally Posted by osirissail

If you talking about Florida as the place you keep the boat most often, the insurance wants to know as they then have add a State surcharge to the cost of the policy.

"state surcharge"? different than hurricane season premiums?

It would be very hard to define where I'd be keeping the boat most of the time. Plans are to move north in the summer and thru Florida to the Bahamas in winter.

Lets try this a slightly different way.

Any issues of having a hailing port in some inland state, a domicile in Florida and a mooring port in Maryland?

[doug86]

http://frwebgate.access.gpo.gov/cgi-...2001&TYPE=TEXT

TITLE 46--
SHIPPING CHAPTER I--COAST GUARD, DEPARTMENT OF TRANSPORTATION--CONTINUED PART 67--
DOCUMENTATION OF VESSELS--Table of Contents Subpart H--Assignments and Designations Required for Vessel Documentation

Sec. 67.119 Hailing port designation.
(a) Upon application for any Certificate of Documentation in accordance with subpart K of this part, the owner of a vessel must designate a hailing port to be marked upon the vessel.
(b) The hailing port must be a place in the United States included in the U.S. Department of Commerce's Federal Information Processing Standards Publication 55DC.
(c) The hailing port must include the State, territory, or possession in which it is located.
(d) The Director, National Vessel Documentation Center has final authority to settle disputes as to the propriety of the hailing port designated.
(e) Until such time as the vessel owner elects to designate a new hailing port, the provisions of paragraph (c) of this section do not apply to vessels which were issued a Certificate of Documentation before July 1, 1982.

[Bash]

Originally Posted by gettinthere

Again, this is for insurance purposes. The agent wants to know the mooring port. The agent understands I will be full time cruising. Still wants to establish a mooring port.

...I don't understand why either.

It's not hard to figure out. You will allotted a certain area--maybe a hundred nm up and down the coast from your port--where you can cruise at no additional cost. When you go beyond that, however, you will be charged for the coverage, either in terms of an increased premium or a higher deductible. Depending on the area, you will probably also face restrictions in terms of where the boat can be during hurricane/typhoon seasons.

[CarlF]

I"m going to guess that the insurance company is trying to treat you as a coastal cruiser with a home port outside the hurricane triangle. This could save you money and will probably work well if you do plan to come north during the hurricane season. You can probably get a coastal policy that will give you coverage for the Bahamas and Caymans (but not the Caribbean) and require you to be north from June through November. "North" is sometimes as far south as southern Georgia.

I was under a policy like this some years ago. When I asked about pricing if I kept the boat in Florida during hurricane season they said that they'd have to then change my "home port" to Florida since I would not be returning to my policy home port during the year. They said the price of the policy would be much more expensive and would require a detailed cruising itinerary (as mentioned by others).

So my guess (and please this is all a guess based on somewhat outdated information) is that any home port north of the Carolinas will satisfy the rule. Maryland would seem fine. I would make an effort to visit your home port each year and pick up a receipt or two. I also am scrupulously honest with my insurance company but don't offer more information than is requested nor ask more questions than seems to be in my interest.

Carl

[osirissail]

Originally Posted by gettinthere

"state surcharge"? different than hurricane season premiums? . . . Any issues of having a hailing port in some inland state, a domicile in Florida and a mooring port in Maryland?

For cruising insurance the "hailing port," "mooring port," documentation port, whatever - does not - make any difference what-so-ever with regards to insurance. The insurance company has your home address and the boat registration/documentation information.
- - Only the areas/places that the boat is planned to be physically present during your cruising year is important to the insurance company. If most of the time your boat will be present in the "hailing/mooring port" then the rates will take that in consideration.
- - But actually rates are based on your "cruising areas." Examples are: "US East coast-Maine to Florida, Bahamas, Laid up June-Aug, Florida." The premium is based on the risks involved seasonally with being in those areas. If you put Caribbean June to Nov your premium would be very high whereas if you put Caribbean Dec-May it would be considerably lower.
- - Cruising regions weighed with the time of year you plan to be there makes the difference in your premiums.
- - Florida has a special insurance surcharge/tax on insurance polices written for boats that will be in the State for more than a specified length of time. I don't think other States have that yet, but may adopt it when the find out Florida is doing it. The insurance company will ask you - how long your boat will be in the Florida waters per year and assess you the surcharge whether you are actually there or not. Currently the surcharge is about 1.3% (figured by taking my surcharge divided into my premium) on the amount of money you will pay the insurance company. It has no relationship what-so-ever to registration/documentation/hailing ports.
- - As stated by others boat insurance written by your home/auto insurance company operate quite differently from cruising insurance. They will also want to know where the boat is being kept when you are not on it and will only probably restrict you to not cruising outside US territorial waters. Just like a car, your license plate/registration may be in Maryland, but you use the car all over the USA. So they base the premium on your home license/registration location. That is why insurance through your home/auto insurance companies are much lower than International cruising insurance.

[Capt Phil]

osirissail is correct IMO... although not sure of the Florida surcharge tax on insurance. That's a new one for me. There was always a difference in the premiums I paid on the west coast depending on where I was cruising. If I was on the hard in San Carlos, MX for maintenance for over a month I got a break on premiums.
I was with the same insurance agency for over 12 years and they really treated me well. Mind you, I had no claims but they were very accommodating.
The OP was curious about answering the question to his agent about where the boat was moored. If you do stay in a marina, you are probably stuck with that location as your 'mooring port'. Just be aware that the marina as well as your insurance co. may be required by law, state or local, to share that info with taxing authorities and you will have a difficult time convincing the tax man otherwise.
Keep meticulous records of your travels abroad to avoid a temporary passing through being construed as 'mooring' in a particular port for tax purposes. Unfortunately, you must prove your innocence not the other way around.
It is well known in San Diego County that County assessors walk the docks begining around Jan 1 each year and if you happen to be passing through north or south, you may well have to prove you have a 'home port' other than San Diego or pay an annual property tax of around 1% of vessel value. I've avoided stopping in CA except for fuel for that reason.
This is one of the reasons that berths are so expensive in Ensenada. Capt Phil

[rubyjean]

My Ins. Co. is State farm and all they want is a place to send the bill...
..Michael..skipper of the Ruby Jean...

PS they don't care where your at or where your going,or how far out to sea you sail....

[osirissail]

The Florida tax/surcharge on marine insurance premiums is real - I have to pay 1.3% this year above my premium. I stated on my itinerary that I would be spending 6 months in Florida. I am registered in Florida and it is my documentation home port. Florida puts all kinds of "extra" taxes/surcharges on a number of obscure things to try to raise money. Other years when I did not plan to be in Florida there was no FL surcharge/tax.
- - The big thing is to not lie or "fudge" on your information to the insurance company. As others have said, that could lead to a denial of a claim when you really need it. The insurance company knows and realizes that your cruising plans can change during a particular year, but when you fill out your itinerary it needs to be as honest as you can make it.
- - As stated, domestic auto/home insurance companies operate quite differently. But what a particular insurance agent tells you may or may not be the actual facts. You have to carefully go through the whole policy with a fine tooth comb to find out what is what. Additionally, Addendums attached at the back of the basic policy can negate and reverse stuff that is in the main body of the policy. Nobody said it was going to be easy.

[SuddenVibe]

This question is too important for opinions... No offense.

Yes, be totally upfront, even forthcoming with the insurance company.

They will ask several questions these days and call them qualifying questions or in the industry we called them black box questions. The agents on the phone just fill in the apps but many insurance programs with black box qualifications on the application deny many claims... Many... For innocent seeming embellishments on the application.

What's the largest boat that you have sailed?
Have you cruised these waters before?
How many years of experience do you have?
Have you had any moving violations?

Seems like an innocent rounding up might help your cause. Claims departments are really good at finding faults in your application when a big claim comes in. They are happy to assume that your statements are true and take your premium until that claim comes in... Then the application can be scrutinized and legally the policy is unwound as though it never existed when you need it most... When there is a claim on file!! At this point it is impossible to get coverage for that claim... You can apply for coverage elsewhere, get a certificate but they will not pay a claim that you had prior knowledge of... You will be on your own.

Rather than pay the claim they highlight the part(s) of your application that don't match their research... They say the app and policy are nullified and deny the claim... They do return your premium paid since the app even if it is 10 years worth if necessary.

There are many reasons why this is legal and happens every day... Too many to mention.

Before the black box phenomenon if you were paying premium and the incident was covered or sometimes even not specifically excluded from your policy the policy would cover up to the aggregate if necessary... Now they might pay...

I go into painstaking grimy details on insurance apps when I am applying... I'd rather pay a few bucks more for a policy that actually will pay rather than save a few bones on a policy that might pay.

Many times you will also see attractive premiums on insurance "coverage"... Note not "policy"... I would read the fine print very very carefully and only go with an insurance policy...

Some agents think the terms are the same... I would give an example or two of coverage scams but their websites are literally gone!!! Right before they disappeared they were offering unbelievably low rates for great COVERAGE... Not just fly by night shops either... I saw an annuity ad once from
A monstrous American financial company... Outrageous financial product for sale... $1000 minimum investment... Instead of the usual $5k... Lock in today!! They mopped up alot of Americans retirement money... They ran the ad everywhere possible for 30 days right up until they closed the doors and anyone who bought that product lost all. All. Yes all... $1000 minimum for the value was outrageous and the most aggressive campaign they had ever run and people trusted the name... It seemed as though this product was designed from the ground up for maximum acceptance with low barrier to entry and a 30 day lifecycle... The architects of the program must have known that the company was folding during that last 30 days... Dirty!

Choose a reputable company... Ask them what to put for permanent mooring, etc. We have no idea how the policy is written or what the exclusions are... No one can guess and in my small experience many many people who think they have insurance don't! They will find out when the claim comes in.

These points are WAY more important with Life policies, business ins and personal property is lower on the list...

Quick note on your life policy... Some policies exclude covering individuals that do certain activities... Scuba, paragliding, hang-gliding, bungee jumping, rock climbing... you need to disclose these "high risk" activities or all of that security for your heirs WON'T PAYOUT!

Is sailing and issue with your life policy?

If you are not certain if you are properly insured You should consult a professional and make sure that you are in the right policy.

One last quick note... Some states have this piece of law that might prevent a life policy from NOT paying out for errors ommissions on your app IF more that 2 years have passed since you made the faulty statement or omission and you are still alive without defaulting and continue to pay premium on time. so, under proper counsel, the best thing to do MIGHT be nothing but it is a good idea to make absolutely sure.

[doug86]

Originally Posted by rubyjean

My Ins. Co. is State farm and all they want is a place to send the bill...
..Michael..skipper of the Ruby Jean...

PS they don't care where your at or where your going,or how far out to sea you sail....

Until you make a claim.... suddenly, they care!

[Capt Phil]

Sudden Vibe... gret info, thanks.. Capt Phil