Insurance Basics

[edstill]

Hi All,

I've shopped for the boat, now I've got to shop for some 'accessories'. Could anyone help me out in putting together a list of features I should look for in a new insurance policy? If it matters, this would be on a 20-odd year old 35' coastal cruiser in the NorthEast.

Thanks,
Ed

[sailingdog]

On most boats over 26' you're required to get a Yacht policy, rather than a boat policy... there are basically two types of basic insurance policies for boats—ACV (actual cash value) and Agreed Value. The latter policies are generally very good if you've got a more expensive boat, but are generally more expensive to get. The difference is that an Agreed Value policy will pay you an "Agreed" amount in the case your boat is lost or stolen, where an actual cash value policy will only pay what your boat is worth.

Several things you will want on your policy, in addition to the basic loss, fire, etc, coverage, regardless of what type it is:

1) Salvage and towing
2) Environmental remediation
3) Liability (most marinas require at least $100,000, many, like mine require $300,000)
4) Theft, preferably with a lower deductible for the dinghy and electronics

For either type of policy, you're probably going to have to have a survey done for the insurance company. Be aware that many insurers will require 20-odd-year-old rigging to be replaced if they are going to insure the rigging.

One other thing to check is what kind of specific named storm coverage you have and what measures you need to take to be covered for a named storm. Also, check to see what geographic region coverage you are covered for. Some policies have relatively small geographic regions, others much wider coverage. The greater the area covered, the more expensive the policy. Finally, also check to see what your layup period and what the requirements for layup are. For instance, some policies will allow in-water layup, others will not.

Hope this helps.

[PalmettoSailor]

I'd be interested in what others opt for in the area of environmental remediation. I think I have $100,000 in liablity and $800,000 against wreck removal and environmental remediation which seems sensible to me, but I could be way off base.

[sailingdog]

Considering the costs of cleaning up an oil spill.. and that's exactly what happens when a sailboat with a tank full of diesel sinks.. having environmental remediation insurance is cheap... the fines are often in the tens of thousands of dollars...

[PalmettoSailor]

Originally Posted by sailingdog

Considering the costs of cleaning up an oil spill.. and that's exactly what happens when a sailboat with a tank full of diesel sinks.. having environmental remediation insurance is cheap... the fines are often in the tens of thousands of dollars...

Which is what I was thinking when I selected the policy I did. Anything is possible but the chances of a boat that moves at 8kts doing $100k worth of damage seems fairly remote. However, a worst case scenario with the boat, and its 30 or so gallons of diesel and some quarts of oil on the bottom in an environmentally sensitive area like the Chesapeake could get expensive quick.

I'm sure rasing a sunk sailboat is an expensive proposition, but would likely pale in comparison to the clean up costs.

[sailingdog]

MLS-

If your boat is stored next to a 40' boat, and yours catches on fire... your liability is going to be a bit short of coverage... or if your boat is stored in a row of boats and catches fire...what do you think will happen??? I'd highly recommend upping your coverage.

Liability coverage isn't just for on the water. This is why most marinas require at least $100,000 in liability minimum... As I said previously, my marina requires $300,000 liability.

[k1vsk]

For anyone considering environmental liability insurance, I'd check the difference in cost from minimal coverage compared with something like the $800k mentioned as I consider this too extensive.
The reality with both gasoline as well as diesel is that cleanup costs are typically not extravagant - it is impractical to clean up small diesel spills and borders on dangerous to try to contain gasoline spills and neither is typically done if for no other reason than quick dispersion by wind and waves. Unless you're boating on a reservoir, cleanup usually isn't a big ticket item.

The fine is a max of $25,000 and usually mitigated especially if no negligence is involved.

It is difficult to image anything approaching $800k in cleanup liability.

[sailingdog]

K1vsk-

There are also problems with recovering the sunken hulk... and if you've managed to damage coral... the costs shoot way up.

[k1vsk]

Originally Posted by sailingdog

K1vsk-

There are also problems with recovering the sunken hulk... and if you've managed to damage coral... the costs shoot way up.

Good point -I'm from Rhode Island - the only coral I see is in the fish tank

[GeorgeB]

If you don’t want to spend close to a million bucks salvaging your boat, for heaven’s sake, DON’T WRECK ON A NATIONAL SEASHORE! When Fast Forward came ashore (near the Pt. Bonita lighthouse in the Golden Gate National Recreation Area), the one tug that could have pulled her off the rocks was off the coast of Oregon at the time. The National Park Service would not allow anybody to rappel down the cliff side because of the site is a designated wildlife restoration area. Therefore the boat could not be secured and the resulting wave action ground a six foot hole in her port side destroying her. The salvage plan was worked with and approved by the Park Service, Insurance Company and the USCG. It took about a week to pull the plan together. The salvage team, and their equipment had to enter and leave the wreck site from seaward, requiring a salvage tug and high performance RIB. Once landed, the salvage crew cut down the mast, collected all wreck fragments and secured them to the boat. A sky crane helicopter was flown up from L.A. and lifted the wreck from the cove and set it on a lowboy trailer in the Pt. Bonita lighthouse parking lot and then returned to L.A. Then wreck was driven through the tunnel to the parking lot at Horseshoe Cove, where a Bigge crane lifted it off the lowboy and onto a regular load trailer and the wreck secured for the trip to the salvage company’s facility in Stockton. Meanwhile, the salvage crew removed the bottom paint that had rubbed onto the rocks, finished picking up debris and departed seaward. I don’t know the final price tag but I do know that the salvage was paid for from both the liability and wreck clean-up policies (the owners carried over $1m in their various policies). This may be an extreme example, but I have also heard of sailboats sinking in relatively deepwater of the Bay and having to be re-floated and removed. As I recall I don’t think I had a choice in the coverage (It might be tied to the liability policy and my marina requires $300k of coverage).