Insurance or not?

[daletournier]

Originally Posted by Benz

I never had insurance in all my cruising, and only got liability when a marina required it. Since all insurance companies I've ever dealt with lie, steal, or both, I do as little business with them as possible. I say you're better off on your own.

I hear this alot. I've paided alot of insurance over the years mainly due to business. My premiums at one stage were approx 16k per year.
My experience with insurance companies has been positive, not once have they been dishonorable.
While cruising in 2011 I was sued relating to a incident that took place in 1999(business). Although there was no proof of incident the insurance company settled and the guy recieved approximately 200k. Total cost to me was $100! Without the insurance company just defending myself could have cost more than 200k in legal fees, the epsisode if non insured potentially could have wiped me out (making the assumption he would not settle).
My point is there is a place for insurance.

Ive chosen a boat that I can afford and also afford to insure. If I lost my boat and weren't insured I could replace it with the equivalent but wouldn't as it would effect my financial future more than I would like, thus I insure ,as it's the only way I can guarantee this life style on a vessel of this value.

I only issured 3rd party on my last boat as I could afford to replace it if I lost it without to much stress.

Its a decision dependent on ones individual circumstances and finances.

[surf_sail]

Originally Posted by estarzinger

Dock, something odd here, help me understand it. Hobie is right that Marine insurance (of the sort we are talking about here) is typically in the 1% of hull value area (let's say in the .7 - 1.5% range typically). Beth works for a major marine insurer, so I am pretty sure of that.

You are suggesting you are paying something like a quarter of that rate. I certainly believe you but how does that circle get squared? Why you have such inexpensive insurance? Must be some information we are missing here.

+1 [emoji106]

I agree, hull insurance should run pretty close to 1% of hull value. I'd also love to hear the full story here...

[ranchero76]

Originally Posted by Paul L

This isn't a $60,000 boat, it's 700k. The posters saying save the 10k a year and put it into a personal insurance fund aren't doing the math. Loose the boat on a reef and your personal insurance fund would pay for the boat after 70 years. And that's only the boat, not any additional liability like wreck removal or attempted salvage.

It's all about education. There's probability theory which always works. How many small cruising boats are completely lost at sea worldwide every year, but cruisers survived (because if they didn't survive, there's no need for insurance anyway)? Do you feel to be lucky to win the "prize"? Then you better start buying lottery tickets and winning millions. Odds are similar.
If someone wins lottery, doesn't mean YOU, in particular, might win it. It simply won't happen. Never. Same with insurance.
People's stupidity and fear - best product in the world. Combination of two sells anything to anyone.

[daletournier]

Originally Posted by ranchero76

It's all about education. There's probability theory which always works. How many small cruising boats are completely lost at sea worldwide every year, but cruisers survived (because if they didn't survive, there's no need for insurance anyway)? Do you feel to be lucky to win the "prize"? Then you better start buying lottery tickets and winning millions. Odds are similar.
If someone wins lottery, doesn't mean YOU, in particular, might win it. It simply won't happen. Never. Same with insurance.
People's stupidity and fear - best product in the world. Combination of two sells anything to anyone.

Fear exists for a reason. Excess irrational fear is different from a rational fear. Just because someone fears a possible outcome and hedges his bets dosent make him stupid.
I recently sold a very profitable business after analyzing possible future paths the business or my life could take. I look at risk from a financial perspective like this, if the potential downside of the trade is equal to or greater than the potential upside, then i don't go there. I apply this to insurance regarding the boat as well. Fear is healthy if combined with a logical brain, its unhealthy when kept unchecked and dominates emotions.

[svseachange]

Boat insurance is probably a bargain for cruisers. In the boat insurance pool the vast majority of boat owners seldomly use their boats. For every cruising boat their must be at least a thousand boats sitting at marinas and mooring balls at a low risk of causing third party damage. We pay under AUD$1000 for $10000000 liability and $70000 replacement value. That's less than $3/day for a lot of peace of mind. Seems like a pretty good deal to me.

[daletournier]

Originally Posted by svseachange

Boat insurance is probably a bargain for cruisers. In the boat insurance pool the vast majority of boat owners seldomly use their boats. For every cruising boat their must be at least a thousand boats sitting at marinas and mooring balls at a low risk of causing third party damage. We pay under AUD$1000 for $10000000 liability and $70000 replacement value. That's less than $3/day for a lot of peace of mind. Seems like a pretty good deal to me.

When you break it down to a daily rate it does seem relatively good value for piece of mind. Mine comes in at $8.50/day for 250k, this is blue water coverage. When I was in the real world I spent that a day on coffee.

[Glenn C]

I have recently been quoted around 0.65 percent total value with 10 m 3rd party, 5k deductible, 200 miles off coast and some reasonable requirements around named storms.....seems we are getting reasonable value in oz.

[Hobiehobie]

I am not questioning the need for Liability insurance of at least US1MM. I would never proceed without that. Its hull and contents insurance that I am self-questioning.

As the boat is currently, temporarily in the hurricane belt, I think I will err on the side caution and take full insurance this year.

[ranger58sb]

Originally Posted by Hobiehobie

As the boat is currently, temporarily in the hurricane belt, I think I will err on the side caution and take full insurance this year.

The $10K still sounds way high to me.

FWIW, we use a broker, who in turn shops coverage/rates for us... If it helps, our broker is IMIS, and if you tell them I recommended you give them a call... it won't make any difference.

Heh... I joke a little. They do like word-of-mouth referrals. No benefit to me, though.

-Chris

[Hobiehobie]

Originally Posted by ranger42c

The $10K still sounds way high to me.

FWIW, we use a broker, who in turn shops coverage/rates for us... If it helps, our broker is IMIS, and if you tell them I recommended you give them a call... it won't make any difference.

Heh... I joke a little. They do like word-of-mouth referrals. No benefit to me, though.

-Chris

Yes I tried IMIS. They cam in between 9,800 and 11,000

[estarzinger]

Hobie,

The risks are very very low if you are going to be in a custom cradle in the bvi. You probably take many other risks in your life that are way bigger.

Personally, we mostly had liability and not hull coverage.

Hullwise I figured we were a vastly better risk than most, and I was not going to bet against that, and we could have handled a total loss and moved on.

Liability is required in situations, and can just get astronomical if things go wrong, and is relatively inexpensive, so (imho) a better deal.

But it all depends on your financial situation, and personal risk profile.

Ps I would still like to hear from Dock if he can explain why his rate is so very very very low?

Pps I follow incidents/accidents in the cruising fleet and would suggests that (roughly) 1% of boats crossing the pacific each year are total losses (e.g. 2 boats lost in a year 200 crossing). And then you have all the other potential claims less that total losses. Just something to think about for anyone complaining about 1-2% rates.

[ranger58sb]

Originally Posted by Hobiehobie

Yes I tried IMIS. They cam in between 9,800 and 11,000

Wow!

Guess that means your boat is WAY more expensive than ours...

Plus that pesky hurricane thing.

-Chris

[daletournier]

Originally Posted by estarzinger

Hobie,

The risks are very very low if you are going to be in a custom cradle in the bvi. You probably take many other risks in your life that are way bigger.

Personally, we mostly had liability and not hull coverage.

Hullwise I figured we were a vastly better risk than most, and I was not going to bet against that, and we could have handled a total loss and moved on.

Liability is required in situations, and can just get astronomical if things go wrong, and is relatively inexpensive, so (imho) a better deal.

But it all depends on your financial situation, and personal risk profile.

Ps I would still like to hear from Dock if he can explain why his rate is so very very very low?

Pps I follow incidents/accidents in the cruising fleet and would suggests that (roughly) 1% of boats crossing the pacific each year are total losses (e.g. 2 boats lost in a year 200 crossing). And then you have all the other potential claims less that total losses. Just something to think about for anyone complaining about 1-2% rates.

Hi, that 1% of boats lost crossing the pacific, do you know gow they are lost?, what im trying to ask is there a high percentage lost underway inbad weather etc or left unattended at anchor....any sort of breakdown on how there lost?

[estarzinger]

Originally Posted by daletournier

Hi, that 1% of boats lost crossing the pacific, do you know gow they are lost?, what im trying to ask is there a high percentage lost underway inbad weather etc or left unattended at anchor....any sort of breakdown on how there lost?

no not really, the statistics suck - the sample size is so low it is hard to say anything while slicing the data. I would imagine the causes of losses have changed significantly since gps, and then later since the french actually accurately charted their islands, and since cruising boats have gotten way way bigger. But I can remember all sorts of loss causes - not one stands out as dominant.

[RobPatterson]

...Just something to think about for anyone complaining about 1-2% rates...

What about coastal cruising in pacific central America and the Caribbean? I can't imagine losses get close to 2% per year but that is a common premium AND there is a hefty 2% deductible. This is for a stout boat that has already circumnavigated and had a problem free recent survey.

I wonder if there are very many fraudulent claims..