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post #31 of 41 Old 04-24-2013
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Re: Insurance and cruising...

Brian - Legacy was freed....it also is a perfect demonstration of why insurance is a scam. a boat like that is un-insurable or have ridiculous out policies for losses. Most people with yachts like that are forced to self insure. Insurance premiums, especially in proverbial high loss areas like florida, are not trivial. In my neck of the woods, premiums alone (not deductibles, co-pays, co-insurance, etc) are in the neighborhood of 2-3% of agreed value. Not to mention, they pay out in depreciated value.

If one is smart and has resources, they should think about self insurance! Put aside the money paid in premiums and have a catastrophe fund that can help bring the boat back. But then again, I would also carry a umbrella liability policy for $1-$2MM. A common "gotcha" of an umbrella policy is that they require you to have $300k of liability coverage on the underlying asset before they begin coverage.

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post #32 of 41 Old 04-24-2013 Thread Starter
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Re: Insurance and cruising...

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Originally Posted by night0wl View Post
Brian - Legacy was freed....it also is a perfect demonstration of why insurance is a scam. a boat like that is un-insurable or have ridiculous out policies for losses. Most people with yachts like that are forced to self insure. Insurance premiums, especially in proverbial high loss areas like florida, are not trivial. In my neck of the woods, premiums alone (not deductibles, co-pays, co-insurance, etc) are in the neighborhood of 2-3% of agreed value. Not to mention, they pay out in depreciated value.

If one is smart and has resources, they should think about self insurance! Put aside the money paid in premiums and have a catastrophe fund that can help bring the boat back. But then again, I would also carry a umbrella liability policy for $1-$2MM. A common "gotcha" of an umbrella policy is that they require you to have $300k of liability coverage on the underlying asset before they begin coverage.
I disagree. That is a perfect point of why to have insurance. Crap happens. It may or may not be your fault. But don't risk your entire investment over a small outgo. Insurance companies make their money by spreading their risks everywhere. They are kept in check through competition. As individuals, we can't do that. If you had owned legacy, for example, what would you be looking at out of pocket? Can you really cover the costs of hitting a 2 million dollar hatteras? A diesel spill on the reef? Torn up sea grass in a environmentally sensitive area? The loss of your boat in a hurricane?

Here is another very recent case in point: Very good friends of ours lost their engines in Nassau. The Bahamian government refused to let Sea Tow or any US company in to tow them back to the US, where they had to go for a replace. They insisted that BASRA do it (as did BASRA). As such, their quote for tow was $125/mile until they were out of Bahamian waters... FROM NASSAU! I think that ended up being close to $15,000... but I don't remember now. How many years of premiums until you have paid $15,000?

I am not saying insurance does not have some scam aspect to it. I also think that everyone should have the right to have it or not as they see fit. I was on record as saying that earlier. However, you need to know the risks and be financially prepared for them.

By the way, I have your insurance too. I am currently in Marathon. I have paid for all of the US, from Texas, all of gulf coast, all of keys, Bahamas-Turks, Atlantic all the way up to Canada. If you don't like your insurance rate, you should take a gander at mine!!! $225k hull value.

But the whole discussion in some ways is pointless. I have seen a real predominance in insurance requirements. As I said, even Mantanzas Pass requires it to even tie up to their ball for a day??? I don't agree with that, but what other choices do I have? Harborage requires being listed on the insurance. It is not up for discussion. Marathon Marina, Snook Bight Marina, etc, etc. It seems the number of marinas that do not require insurance are dropping, while the number that do are growing. What choices do you have as boaters? You can either anchor everywhere (not really reasonable), search for the dwindling marinas that don't require insurance, buy a house on the water to park your boat behind, or give up boating. I really do see a day when pretty much everyone 'has' to carry it.

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post #33 of 41 Old 04-24-2013
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Re: Insurance and cruising...

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The worst for this is Australia where many marinas want $10 million in liability, most others want $5 million. Scarborough Marina in Brisbane accepted our Jackline policy with $500,000. They get a lot of foreign visitors. We stopped for one night at the marina in Airdrie Beach so we could touch base with an electronics tech. After thinking about it for an hour they said we could contact our insurance company to see about increasing our limit. I was going to point out the 11 hour time difference and the fact it was one night (at a high price), but thought I would leave well enough alone. Remarkably, in the morning when I took the key back to get my deposit they asked if I had talked to my insurer and I assured them that they were working on it. We used a marina in Darwin and the said they wanted $5 million but I could arrange a local supplement. When we got there they only wanted a copy of our insurance and did not mention the liability amount.
It seems like Australia tries their best to discourage sailboats, from their clearing in policies to insurance. I think when I finally set off to do the big loop, I will avoid it entirely. Australia has apparently gone from remote penal colony to the land of regulation and official nonsense.
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post #34 of 41 Old 04-24-2013
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Re: Insurance and cruising...

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But the whole discussion in some ways is pointless. I have seen a real predominance in insurance requirements. As I said, even Mantanzas Pass requires it to even tie up to their ball for a day??? I don't agree with that, but what other choices do I have? Harborage requires being listed on the insurance. It is not up for discussion. Marathon Marina, Snook Bight Marina, etc, etc. It seems the number of marinas that do not require insurance are dropping, while the number that do are growing. What choices do you have as boaters?
THIS is the real issue. When a so-called private for-pofit product (insurance) becomes mandated (or quasi-mandated in this case), the normal checks and balances of market economics breaks down. Add to this the opaque nature of how premiums are arrived at, and you get a dysfunctional market that has very little incentive to limit cost increases.

Remember, insurance is simply a tool for mitigating risk. It does this by pooling risk and sharing the cost amongst the pool (a lovely socialist solution BTW). But that's not the only way to mitigate risk, and in the case of sailors and cruisers, it may not be the best way.

Risk is proportional to likelihood of an Event happening TIMES the potential Impact of that event:
R E x I.

So, investing in good systems and maintenance, in training and gained experience ... stuff collectively know as good seamanship ... these will almost always be better, and more cost-effective, ways to reduce your real boating risk.

But the other thing I keep pointing out (whenever this discussion arises), is that the number of events are exceedingly small in boating. I don't have the analysis in front of me right now, but when I looked at USCG data for all types of incidents, from death to property damage, the numbers showed that boating is incredibly safe. Far safer than many things we routinely do like driving, eating processed food or walking in a city.

I get it ... demanding that everyone carry insurance is the simplest way to protect everyone's a$$. But in a case where resources are limited, and you have to chose between insurance or, good maintenance for example, then it becomes a false benefit.

I'm certainly not saying insurance is never a good idea. If you are involved in high-latitude sailing, or perhaps competitive racing, then insurance is probably a good idea. But for the vast majority of us, it is money poorly spent.

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post #35 of 41 Old 04-24-2013
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Re: Insurance and cruising...

Boats on reefs in the South Pacific simply become parts of the reef. The US government has been sinking ships as artificial reefs, greatly enhancing the local fish populations there. We have been doing that here in BC as well. Not all the world is as paranoid and hipocritical as the US , playing the game of " Aint I politically correct" while dumping huge amounts of pollutants per year into the finite atmosphere. Someone who drives a car daily, while preaching about pollution to someone with an environmental foot print less that 1/10th of their own, is like the pot calling the kettle black. Actuallty it is more like the pot calling the shiny stainless spoon black.

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post #36 of 41 Old 04-24-2013
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Re: Insurance and cruising...

If it gets bad enough perhaps we will see a collection of sailors ( like us on SN) forming a consortium and insuring ourselves. Believes Llyods started under similar demands and concerns. If done as a non profit consortium the costs could be qite reasonble.
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post #37 of 41 Old 04-24-2013
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Re: Insurance and cruising...

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It seems like Australia tries their best to discourage sailboats, from their clearing in policies to insurance. I think when I finally set off to do the big loop, I will avoid it entirely. Australia has apparently gone from remote penal colony to the land of regulation and official nonsense.
Increasing your public liability when in Australia is dollars not Hundreds. Where the 10Million came from started in Queensland due to the huge cost to the public for the clean up of beaches and marine parks from Maritime wrecks. They don't differentiate from the 12' tinny and the 49 foot trawler but if you are bigger than 50 foot then you have to take out a second insurance.
As far as discouraging cruisers from visiting our shores, Yes they are tough on what you can bring into our country, but no tougher than most other isolated country's, who are trying their best to protect our diverse fauna and flora. I see a lot of these complaints coming from US and EU folks. I can tell you that the US is the strictest and most controlling authoritative group I have seen. The US require a non resident (alien) Cruiser to inform them when ever the vessel is moved, even from one marina in San Francisco to another in San Francisco, Australia only needs you to report in when visiting a Customs port, so Leaving Sydney you only need to reports when passing Coff, Brisbane , Bundaburg, Mackay ect. that leaves a lot of cruising grounds in between where you do as you wish. I recommend all Cruisers come and see our country, and make sure you leave your boat at a marina, hire a RV and tour the inland as well. I have yet to meet a visitor complain about anything but the cost.
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post #38 of 41 Old 04-24-2013
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Re: Insurance and cruising...

In the age of international flights, millions of pieces of luggage, and international shipping of thousands of containers, in the free flow of goods, it seems like the clearance systems for boats like fumigation and food restrictions are quite absurd. They are more revenue producers than systems to actually protect anyone from anything. Most of these systems were put in place to inhibit the spread of Yellow Fever and Smallpox, not a big issue nowadays. I'm sure the US must be a real PITA to clear in, especially since 911. We citizens even need a Homeland Security sticker to go 70 miles to the Bahamas and get back in...silly. Treating all boats as if we are criminals is really an intrusive blanket solution to what amounts to a NON problem. The theory is: Let's inconvenience everyone so maybe once in a while we may stumble upon something bad. It's government out of control.

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post #39 of 41 Old 04-25-2013
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Re: Insurance and cruising...

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In the age of international flights, millions of pieces of luggage, and international shipping of thousands of containers, in the free flow of goods, it seems like the clearance systems for boats like fumigation and food restrictions are quite absurd. They are more revenue producers than systems to actually protect anyone from anything. Most of these systems were put in place to inhibit the spread of Yellow Fever and Smallpox, not a big issue nowadays. I'm sure the US must be a real PITA to clear in, especially since 911. We citizens even need a Homeland Security sticker to go 70 miles to the Bahamas and get back in...silly. Treating all boats as if we are criminals is really an intrusive blanket solution to what amounts to a NON problem. The theory is: Let's inconvenience everyone so maybe once in a while we may stumble upon something bad. It's government out of control.

Murphy, that's why we cruise far, far, far from your shore.


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post #40 of 41 Old 04-25-2013
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Re: Insurance and cruising...

I paid the extra for a policy last time I went cruising down south. It was $2000 I could have used for radar or something else, but it did feel good knowing that I wouldn't lose everything if something went wrong.

Nothing did, and I am still on the fence about whether I will carry it next time, though.

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