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-   -   Boat Insurance Nuances - do I have it wrong? (http://www.sailnet.com/forums/cruising-liveaboard-forum/101395-boat-insurance-nuances-do-i-have-wrong.html)

Razcar 07-15-2013 02:48 PM

Boat Insurance Nuances - do I have it wrong?
 
Hey gang,

I recently read this post from Rode Trip who I have been following for some time:
When Life Deals Lemons? | Rode Trip

Their troubles in finding insurance doesn't surprise me with the older boat they have, but I suppose my question is more basic than that.

1. Why do you NEED insurance to sail?.... purely speaking... If you've got an old boat you're willing to take a loss on (say it sinks), then why insure it?

2. I understand you may need insurance for being in certain marinas, so why is it so hard to get coverage for basic marina stuff and that's it? There's tons of boats out there, why is it so hard to insure them?

3. Has the absence of insurance prevented anyone from cruising anywhere? If so, where?

4. They mention ways around insurance requirements, I've also heard of this from other sources. It no doubt works, but still.... is there no other option?

As someone who is looking to cruise a lot in the future, this is an issue i am not terribly well versed in and it caught me by surprise.

Thanks for the insights.

Scallywag2 07-15-2013 04:14 PM

Re: Boat Insurance Nuances - do I have it wrong?
 
Razcar,

Many marinas require liability insurance before you can moor or dock at their facility. It is not that your boat is worth nothing but what the other guys boat is worth. Can you cover the clean up if your boat leaks fuel when it sinks? What if you hit another vessel? If you want to gamble like the insurance companies do, then go with no liability insurance. Hull insurance covers your boat.

miatapaul 07-15-2013 09:08 PM

Re: Boat Insurance Nuances - do I have it wrong?
 
I think it depends a lot on where you are planning on sailing. If your boat does damage to a new 65 foot swan when you anchor drags? Ouch, there goes a few years cruising kitty. So your said boat sinks, if it is in US waters you are looking at up to a couple hundred thousand dollars in environmental clean up as all the diesel fuel perks up from the boat, oh they can trace the hull number to find who owns it. And your not BP so you will have to pay! Oh get dragged into the coral off the coast like the Navy did and you are looking at lots of fines, even it a storm drags you. I can't imagine a Philippine jail is very nice. Yes if you want to go into a Marina for maintenance of a nice shower then you will need insurance. But I guess it comes down to responsibility.

Minnewaska 07-16-2013 07:45 PM

Re: Boat Insurance Nuances - do I have it wrong?
 
Hull coverage is entirely up to the owner. If one can afford to lose it and is willing to chance it, that's a personal decision.

It's insane not to have liability in the US, which bears no relation to the value of your boat. You can do as much damage to others or the environment with a $5k boat as you can with a $500k boat.

The problem is that some insurance companies want a survey, even for liability, based upon certain factors such as: the specific age or model of the boat, the owners resume or the insurance company's policy.

A survey makes obvious sense when covering the hull, as they would want to know the hull is worth what they are insuring and not in a condition expected to drive an immediate claim. Liability, however, can also be a factor of the condition of the boat. I'm aware of two boat fires in the past year, both of which took out several others at the marina. Millions in liability. You bet that most insurance companies want to know your beloved isn't an accident waiting to happen.

RainDog 07-16-2013 08:08 PM

Re: Boat Insurance Nuances - do I have it wrong?
 
You also need insurance to get a loan on the boat. Not that I recommend ever doing such a thing, but the seem to be quite popular.

TQA 07-16-2013 08:12 PM

Re: Boat Insurance Nuances - do I have it wrong?
 
If all you are looking for is 3rd party liability then a survey is not usually required.

Many cruisers are not insured at all preferring to put the money into a bigger anchor and more chain.

It looks like it will be increasingly difficult to sail in Europe outside the UK without insurance. Countries like Croatia and Italy now demand this to be shown on entry and at marinas harbours. Photocopies are not being accepted as it is just too easy to doctor up one on a PC and print it out.

Razcar 07-17-2013 11:37 AM

Re: Boat Insurance Nuances - do I have it wrong?
 
Quote:

Originally Posted by TQA (Post 1060177)
It looks like it will be increasingly difficult to sail in Europe outside the UK without insurance. Countries like Croatia and Italy now demand this to be shown on entry and at marinas harbours. Photocopies are not being accepted as it is just too easy to doctor up one on a PC and print it out.

Would this be liability only at a minimum?

Also, for liability only, is it typically an exorbitant amount? A few thousand a year? or more than 10k per year for a 20 yr old sub-40 foot boat....? Just trying to get a handle on how ridiculous (or not) it may be. Of course, a new boat would likely cost more to insure, i get it.

Group9 07-17-2013 12:39 PM

Re: Boat Insurance Nuances - do I have it wrong?
 
Quote:

Originally Posted by Razcar (Post 1060488)
Would this be liability only at a minimum?

Also, for liability only, is it typically an exorbitant amount? A few thousand a year? or more than 10k per year for a 20 yr old sub-40 foot boat....? Just trying to get a handle on how ridiculous (or not) it may be. Of course, a new boat would likely cost more to insure, i get it.

Boat US quoted me a cost of $500 a year on a liability only policy for a 42 foot boat. Hull coverage from another insurer had been only $2500 for the complete Caribbean, except for the hurricane box.

SVTatia 07-17-2013 01:32 PM

Re: Boat Insurance Nuances - do I have it wrong?
 
Quote:

Originally Posted by Razcar (Post 1059466)
Hey gang,

...Their troubles in finding insurance doesn't surprise me with the older boat they have, but I suppose my question is more basic than that.

From the link: "USA companies won’t provide third-party liability only, they want to delve out full coverage policies (pricey policies) and they want an out of water survey within this year to identify exactly what they are insuring."

This is not related to your questions, but they could get insurance. I don't blame the insurance companies, all they are asking for is a survey. I wouldn't expect anyone to issue a policy without knowing what they are securing. Just my 2 cents.

KarlP 07-17-2013 03:50 PM

Re: Boat Insurance Nuances - do I have it wrong?
 
I don't have insurance on my sailboat or dinghy. My homeowners insurance covers liability on sailboats less than 26' with auxillary power up to 60hp and rowboats at no extra charge. I do pay something less than $1/mo extra to have them covered under my umbrella policy. From what I understand this coverage is common on homeowners policies. Your O'Day 20 might be already covered from a liability perspective. Read your policy.

I have agreed value insurance through BoatUS on my 13' Whaler because it is a pristine garage queen I've owned since new, and my homeowners doesn't cover liability on powerboats with more than 25 horsepower.


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