Originally Posted by MikeOReilly
Who is driving this increasing demand for higher liability coverage? Is it the marinas, or is it the insurance companies?
This issue frustrates me b/c the real risk involved in boating activities is exceedingly low. I've looked at the North America accident data, and the rates of recorded injury, damage and death are very low. Despite this, insurance demands seem to be climbing at a very steep rate.
It's all risk transfer (and a bit of insurance industry self-propogation, I think).
The company that insures the marina mandates that the marina require insurance from the individual boaters so that when Captain Knucklehead's propane stove blows up and torches six other boats it's Captain Knucklehead's insurance that's left paying the tab, not the marina's insurance. That allows the marina to buy isnurance at a lower rate than another that doesn't require insurance from the individual boaters. And, of course, this also requires individual boaters to buy policies, which means more revenue for the insurance industry to help offset other losses they've incurred, like, for example, damages from a hurricane.
The marina I'm in requires $300k in liability and needs to be named as an additional insured. The highest requirements that I encountered when I was looking at marinas in the area was $500k.