Join Date: Feb 2010
Location: Narragansett Bay
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Re: Boat Insurance Rate Increase
The insurance carriers drive me absolutely crazy. I have named storm haul out coverage, which pays half the cost when a warning is issued. I asked them what the new rule was going to be, now that they won't necessarily be issuing warnings in the northeast any longer. They said they would make a case by case decision. Ridiculous. Which way would one expect them to decide, if there didn't turn out to be a direct hit?
Anyway, unlike the insinuation that they always win, insurance companies can and do go out of business after large losses. It happens all the time. That's why there is a profit, as they risk losing it all.
The concept is purely a sharing of exposure. The collective always pays the sum total of the loss. Its just distributed equally, rather than only to those that suffer the loss. This goes up and down and I've been around long enough to see my premiums go both directions.
Where the consumer gets screwed is when they are paying for a loss exposure that they don't have themselves. For example, if you live far from the coast, you are probably still paying part of that coastal exposure. But, before there is a cry for further restricting how insurance companies can pool these things, just take a look at the highest regulated insurance states. They have the fewest insurance companies willing to write a policy there at all and the lack of competition drives rates way up.
Finally, not all insurance companies are the same on claims. Indeed, some keep their premiums low with the intention of restricting payouts. Others charge more and pay more. Its simple. You need a pro to help know which is which.
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In the harsh marine environment, something is always in need of repair. Margaritas fix everything.