By the time I lost my first boat in Fiji, it would have cost me far more in insurance than it cost to replace it, and they would have forced me to put up with crew I didnt want, eliminating my reason for cruising in the first place. No thanks!
Don't want this to come out the wrong way Brent, but when you hit that reef, did you damage it? Did you have to pay a fine for damaging the reef? Did you have to pay a fine for any environmental problems, like fuel spilled? Did you have to pay to have the boat raised and hauled into a yard and disposed of properly?
Seems to me that the costs of that kind of mishap would be extraordinary. THe US Navy just got off easy with a $1.5M fine for hitting the reef in the pacific - and they disposed of their own vessel, tried to take immediate reactions to correct it, and eventually cut up and hauled it off themselves. I understand the magnitude of damage between a mine sweeper and a private yacht are quite a bit different, but there is still a lot of damage a private yacht can wield on a reef, and most of us do not have available the resources to take care of that ourselves.
And how would you like to be dealing with this without insurance: Mega-yacht Still Marooned off Key West | Terryorisms
That boat has reduced a multimillionaire to sleeping on a floating barge and years (and nearly a million later) it STILL is not off!! How would you like to tackle that one without insurance?
So, seems to me that your example is exactly a reason pay insurance and carry it. And the minuscule cost you might have incurred on premiums would dwarf the vast amount of money you might be facing for just an environmental disaster such as you mentioned. This doesn't even mention the costs incurred if you were to hit another vessel... especially with the steel sailboat you now sail that could cause considerable damage to (if not sink) a fiberglass or wooden boat.
Just an observation.