Insurance, what can you afford to lose?

[belizesailor]

Originally Posted by Elie

Many cruisers seems to be able to live with a liability coverage in US waters. Where to get liability only coverage only?. Curious to see who provide such coverage. Many thanks.

See discussion here:

https://r.tapatalk.com/shareLink?url...8&share_type=t

[Dooglas]

Originally Posted by Elie

Many cruisers seems to be able to live with a liability coverage in US waters. Where to get liability only coverage only?. Curious to see who provide such coverage. Many thanks.

The question might be "who doesn't". I think every one of the well known marine insurance companies offers liability coverage. BoatUS has popular insurance programs for boat owners - and they definitely offer separate liability coverage.
https://www.boatus.com/insurance/liability-policy.asp

[Simi 60]

Originally Posted by WanderingStar39

Interesting discussion. I carry full insurance on the boat, liability only on the car. .

Have you ran the numbers?
In oz, for us at least, 3rd party liability insurance on the car is only dollars cheaper than full comp.

Gotta get rid of the car, only drove it twice this year, far cheaper to uber and or rent one.

[Chotu]

Originally Posted by jimglasair3

I felt the same way for years about health insurance. Never had a claim other than preventive. Was about to drop my 21 year old daughter and let her get on some cut-rate plan for college kids, but kept it anyway for piece of mind. It's a Dad thing. Thank goodness! Two months ago she had a bad heart valve, and $240,000 worth of surgery and hospital time later, I am quite grateful it was a $4,000 cap.... insurance is just plain expensive, right up until you are the unfortunate 1% that really needs it...

True of all insurance.

[Mike OReilly]

I’m constantly bemused and annoyed that 3rd party liability is seemingly so difficult to get for cruising boaters. It is always part of a comprehensive policy, and usually costs very little. In other words, the risk to the underwriter is very low.

This certainly makes sense when you look at accident rates for cruising style boats. So why is it so hard to get?

My theory is that there’s so little money in liability-only policies that most brokers don’t bother, or try very hard to dissuade people. Their profit likely isn’t worth the processing cost.

[Paul L]

Dale
I look at it as not how much loss I would suffer but how it would change my life. I met a guy in Bundaburg who lost his C&C in a storm and had useless Northern Reef insurance with no payout. The boat was worth less than usd$70k or so. He picked up the pieces and bought another C&C in Annapolis and was preparing to sail back out. Definately a financial loss, but no real change in life style.
If I lost our boat on a reef sans insurance we would not buy another one. In other words we would be back on land. A significant life style change, but we wouldn't be in the poor house either.

Buying insurance is just paying someone to take on a portion of the risk that you do not want to take on. It makes no sense to talk about average boat losses or health insurance having high deductibles. It is the major risks you are insuring against. In the case of health insurance, at least US wise, a three quarter million dollar heart attack or a million dollar cancer treatment. In terms of boat insurance the biggest risk is liability in the millions ( although really a low risk) or total boat loss ( a not low risk).
It definately comes down to YMMV

[Paul L]

Originally Posted by Mike OReilly

I’m constantly bemused and annoyed that 3rd party liability is seemingly so difficult to get for cruising boaters. It is always part of a comprehensive policy, and usually costs very little. In other words, the risk to the underwriter is very low.

This certainly makes sense when you look at accident rates for cruising style boats. So why is it so hard to get?

My theory is that there’s so little money in liability-only policies that most brokers don’t bother, or try very hard to dissuade people. Their profit likely isn’t worth the processing cost.

The risk is low but the coverage amount for the liability side is generally far higher than the property side. Say a $100k boat vs a $1,000,000 liabilty.

[Mike OReilly]

Originally Posted by Paul L

The risk is low but the coverage amount for the liability side is generally far higher than the property side. Say a $100k boat vs a $1,000,000 liabilty.

True. Which reinforces the fact that the real risk is very low.

[Pelagic]

There is another factor which is whether you trust insurance companies to pay legitimate claims?
if you cruise in a remote, low density yachting area, my observation is that there is less incentive for those insurance companies to take a loss, if they can frustrate the claim process.

[Paul L]

Originally Posted by Mike OReilly

True. Which reinforces the fact that the real risk is very low.

The risk is low but the potential payout is high. In other words 10 small losses equals 1 big loss. In buying marine liability only you are in essence saying you will take the property loss risk and want to pay tbe insurance company to take the liability risk off your shoulders.

[belizesailor]

Originally Posted by Paul L

The risk is low but the potential payout is high. In other words 10 small losses equals 1 big loss. In buying marine liability only you are in essence saying you will take the property loss risk and want to pay tbe insurance company to take the liability risk off your shoulders.

...and the property loss amount is known...whereas a liability loss is not. So, someone can easily decide if they can take the property loss hit, but the liability loss is more worrisome.

[Paul L]

Originally Posted by belizesailor

...and the property loss amount is known...whereas a liability loss is not. So, someone can easily decide if they can take the property loss hit, but the liability loss is more worrisome.

Kind of, but from the insurance side both are capped. If the damage exceeded the cap on your liability policy the harmed can still go after the boat and you personally in most places. In the US they tend to go after the deep pockets, ie insurance first.

[Mike OReilly]

Originally Posted by Paul L

The risk is low but the potential payout is high. In other words 10 small losses equals 1 big loss.

Yes … but this doesn’t change the fact that the risk the underwriter is taking on is very low. This is why it is priced so low.

Originally Posted by Paul L

In buying marine liability only you are in essence saying you will take the property loss risk and want to pay tbe insurance company to take the liability risk off your shoulders.

Yes, that’s exactly what this means.

In looking at insurance costs my view is that liability-only policies are generally good value for money, mainly b/c they cost so little. Comprehensive or hull insurance seems less beneficially clear.

I ran a survey using CF and SN members a little over a year ago. The results shows that there is a rather large range of insurance costs (as expressed as a percentage of insured value). It ranged from 0.3% to over 6%.

The sample size was too small to be statistically sound, but it underscores the recommendation to always shop around.

Here’s the results (again), for anyone who may have missed it. I broke out the liability-only results into a separate report.

Probably time to run this again...

[sailcrazy]

following. We haul out and leave our boat in Puerto Rico during the summer season. This year, for the first time since we've owned ocean-going boats, now some 22 years, we have NOT been able to find named storms coverage.......except at a premium more than 250% on last years rate. Our marina requires ins, so now we have a decision to make-unless we can find a reasonably priced policy with named storm coverage between now and July.

[01kiwijohn]

That's exactly how I decided on the boat we have now. My brother was in the NZ Navy and involved in rescuing crew from the "famous "Queens Birthday storm. Apparently, insurance restrictions played a significant part in some sailor's decisions to leave when they did. Short version; Since I didn't have a lot of dough, I decided to buy half the boat I could then afford so that, if I lost it somehow, I could afford another one. Consequently, we don't have a boat show award winner, nor is she loaded with modern conveniences but, she's proven simple to own and maintain and seaworthy enough to go where we've wanted to. Actually, we're reluctantly thinking of replacing it with something a little more, shall we say, age appropriate?
Locally, we are insured. Offshore, or "out there", we have liability only to satisfy marinas etc.