Insurance Coverage amounts

[seapadrik]

Hello All,

I have just purchased an Ericson 29 after having researched sailboats all summer long. I am happy with my choice (this is my first sailboat).

I am wondering what is a decent amount of coverage to have. Here are some stats:

1. I paid cash for the Ericson (so no banks are controlling the amount of coverage)
2. My intended use is daysailing. Maybe some 3-4 day trips over the summers.
3. moored at a marina

I have initially insured for agreed Hull value, 100,000 liability and some towing insurance.

Does this seem to little for my intended use? or should i consider 300,000 and higher liability?

thanks

[FrankLanger]

Congratulations on your Ericson 29 purchase. As an owner of a 1984 Ericson 30+, I am a strong fan of Ericsons, I'm sure you'll love your boat!

However, I think you are very underinsured. My boat use is very similar to yours. I have insurance to cover the full cost/market value of my boat, plus replacement value for all electronics (not depreciated value which can be almost worthless), limited tow insurance and one Million dollars liability (all with a $500 deductible). I think having only 100,000 liability is way too little if you hole/sink a larger/newer boat or cause someone personal injury. Although I have never made a claim in my almost 15 years of boat ownership, I think having adequate insurance is wise and relatively inexpensive for the peace of mind.

As well, many marinas require that you have more insurance, so you may want to check with them as well. They may want to protect their other marina clients, and avoid a future lawsuit as well, if they let you in perhaps underinsured.

Good luck with your boat!

Frank.

[JEdwards]

seapadrik,

My knowledge of sailing is limited, but my knowledge of insurance isn't (I hold multiple licenses.) Here's how insurance generally works:

The policyholder wants to spend the least they can in premiums and just hope for the best.

Then, when something happens, they strap on the Pete Best self-a** kicking machine and wish they had paid the little bit more for extra coverage.

I advise my clients to purchase the most they can comfortably afford, especially liability. That doesn't always mean buying the highest coverage offered, but if you wreck a $300k boat and you have 100K in coverage..., well that's $200k out of your pocket and most of us don't have $200k in our pocket. Certainly not an extra $200k.

What's the price difference in the coverage, if you don't mind me asking?

[astraeus]

Don't forget to check with your marina. Many that I have priced require at least $300,000 liability.

[seapadrik]

Thanks for the advice.

By the way I am not trying to get by 'on the cheap' I just truly did not know what the norms were for coverage amounts. Based on your comments I called them back an upped it to 500,000 liability. Although that had to get approved by the supervisor based on the age of my boat (30 years old). This only increased the premium by $50. I will consider going higher but wonder if they have a cap for 30 year old boats.

Cheers

[FrankLanger]

Seapadrik, I think you are wise to increase it to at least 500,000. I think that's still too low, if you are at fault for a seriously disabling injury, as well as boat damage (hence my decision to go with at least one million). My Ericson is 22 years old, and they didn't question that, though they did want a copy of the survey. I am assuming you got a survey done before you bought the boat??
Good luck!
Frank.

[TejasSailer]

We have insurance that is called something like a personal liability umbrella policy. Our house, cars and boat are all insured with or via (boat) the same company at a prescribed level, and the umbrella policy at an additional premium provides liability insurance across all of the policies.

The premium does not seem terribly expensive versus a claimant winning the lottery at our expense.

[sailingdog]

I agree with frank and jedwards about $100,000 and $300,000 being a bit low, especially if your boat is in a marina. For instance, if your boat breaks free and hits two other boats, you could easily be looking at $500,000 damage to the two other boats, the docks and your own boat. Also, if your boat catches fire, and ignites the docks or other boats... same thing. The price difference isn't all the great, and the peace of mind is worth it.

Generally, the liability portion of the policy has very little to do with what is being covered, as it is different and separate from the hull value. The liability portion is mostly risk-based, and has more to do with where your boat is stored, and what your experience is, than it does with what kind of boat you have.