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post #71 of 137 Old 09-21-2019
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Re: Cruising vs. Passages

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I don't think I can agree with that. Insurance being a statistical business can't tell me what the specific risk of my boat is. They can group me in a risk category, and they are quite clear and upfront on what category that is (I am regularly presented with policy and price options around navigation areas, layup times, types of passages, value of boat and equipment, etc), but they cannot know the individual risk of our specific boat and how we use it.
Sure, but whatís your groupís risk? Itís a statistical (actuarial) analysis that is easily communicated. Iíve never seen anything close to that kind of detail provided by insurance companies. Your policy price does communicate this, but in very gross terms. Itís a piss poor way of getting an answer to this basic question.

Insurance is always marketed based on fear and loss. Itís certainly not based on rational risk assessment. It could be IF customers were provided a full explanation of their actual risk profile, but that never happens.

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... If a seller leaves the market completely because they cannot make money at prices the buyers will pay, then that is a broken market - not a scam. This seems to be the case recently.
My scam comment was meant as a joke, but whether you say the market is broken or call it a scam, the result is the same. You have a market failure where one side holds virtually all the information cards, and worse, the other side is increasingly forced to buy due to legal or commercial demands.

If your boat is owned by the bank, then you are forced to buy insurance. Increasingly it seems that marinas are demanding insurance just so boats can tie up to their dock. And if you want to haul out or get some work done, it is also mandated. So buyers are not acting freely, nor are they acting with full knowledge. Iíd call this a market failure ó at least from the customersí persepective.

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post #72 of 137 Old 09-21-2019
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Re: Cruising vs. Passages

IDK, It seems like the market works the way all markets do. The Marina, the Bank and the Insurance Company all have risks that they need to hedge against. An owner has choices, albeit limited ones. One can own their boat outright and keep it on a mooring and haul it themselves. Once you ask others to share in your risk and cover your losses, there is going to be a cost involved. How fair that cost is pretty much what the market will bear.

I have a vanishing deductible ( Zero, now) for having made no claims, in X # of years.
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post #73 of 137 Old 09-21-2019
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Re: Cruising vs. Passages

It seems boat owners certainly have some control over insurance costs. My current trailer sailer isn't insured. No need, paid cash for it, not a significant loss if something happens to it and I don't use marinas.

My previous boat was insured (sold 3-4 years ago, so my info is a bit out of date, but not too out of date). I had no choice but to insure it, no yard or club around here would let me use their facilities without it. The boat was my full time home and cruising boat, so fits into this discussion. Insured value about $40k. Regular insurance was about $600/year, plus I was charged $500 Live Aboard premium for being a full time liveaboard. The region covered by my regular rate was the Great Lakes and St Lawrence river including NYS Canals. So, really a pretty big area about equal in size to the US East coast and covering two countries.

The insurance shot way up as soon as I left that region. As soon as I went East of Quebec city I was looking at about $several hundred/month plus the live aboard premium. However, I was only charged the increased rate for as long as I was outside my home region, a 1 month trip would result in a 1 month increase in insurance. So, say a 4 week trip to Gaspe and back would cost me an extra $ few hundred in insurance.

So its clear to me, my insurance company perceived a lot more risk with offshore travel, than they did with living aboard, less than $100/month in live aboard premiums vs roughly $300/ month in premiums for cruising beyond my home region.

Having sailed the Florida Gulf Coast shortly after Irma and seeing the number of wrecked cruising style boats abandoned in the mangroves, I can kind of understand why.

Last edited by Arcb; 09-21-2019 at 01:34 PM.
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post #74 of 137 Old 09-21-2019
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Re: Cruising vs. Passages

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It seems boat owners certainly have some control over insurance costs. My current trailer sailer isn't insured. No need, paid cash for it, not a significant loss if something happens to it and I don't use marinas.

My previous boat was insured (sold 3-4 years ago, so my info is a bit out of date, but not too out of date). I had no choice but to insure it, no yard or club around here would let me use their facilities without it. The boat was my full time home and cruising boat, so fits into this discussion. Insured value about $40k. Regular insurance was about $600/year, plus I was charged $500 Live Aboard premium for being a full time liveaboard. The region covered by my regular rate was the Great Lakes and St Lawrence river including NYS Canals. So, really a pretty big area about equal in size to the US East coast and covering two countries.

The insurance shot way up as soon as I left that region. As soon as I went East of Quebec city I was looking at about $several hundred/month plus the live aboard premium. However, I was only charged the increased rate for as long as I was outside my home region, a 1 month trip would result in a 1 month increase in insurance. So, say a 4 week trip to Gaspe and back would cost me an extra $a few hundred in insurance.

So its clear to me, my insurance company perceived a lot more risk with offshore travel, than they did with living aboard, less than $100/month in live aboard premiums vs $300/ month in premiums for cruising beyond my home region.

Having sailed the Florida Gulf Coast shortly after Irma and seeing the number of wrecked cruising style boats abandoned in the mangroves, I can kind of understand why.
So this is interesting, and illustrative of how variable and loosely connected insurance rates are to reality.

I was cruising the same area as you during the same period in a very similar boat. Our insurance rates for our $60,000 boat was less than yours (somewhere around $500). This coverage extended all the way through Atlantic Canada, with no additional charges east of Quebec City. I think our only limitation was to be 100 miles tostados shore, and I think we couldnít go above 50 degrees North.

Iíve cruised Newfoundland this past three years. I was with my old insurer up until this year. No change in coverage, and I think the price actually notched down a bit with them. But I switched broker and underwriter (b/c they made me get a new survey, so I decided to shop around), and now pay even less for the same comprehensive coverage. But arguably I cruise in much more challenging waters now.

So Ö two brokers accessing underwriters who cover the same turf with apparently access to the same risk data. Yet we get significantly different prices. I think this supports OBís thesis that this market is closer to boutique, which means the price is rather disconnected from reality.

Further evidence; when I conducted a rather extensive insurance survey a few years ago here (some of you may remember), I found the rate people were paying ranged widely from a fraction of a percent to over 6 percent of insured value.
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post #75 of 137 Old 09-21-2019
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Re: Cruising vs. Passages

I'm not sure why you would expect all companies/underwriters to have the same price for the same product. I don't see that as a sign of a broken or boutique market. It is this way for everything, else nobody would be shopping around for anything they wanted - just head to the nearest store.

In the case of insurance, some underwriters have larger customer pools, larger reserves/investments, larger tolerance of risk, etc. Some might be trying to build more business and pricing more aggressively on the risk scale than another. Some might be over-extended and raising prices to shrink their customer pool, or mitigate risk. There are lots of reasons.

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Re: Cruising vs. Passages

I was caught off guard by the increased cost east of Quebec. I called just to let them know that's where I was going and they said, I by the way, we are going to charge extra for that. But it wasn't a ton of money and they didn't bug me for up to date surveys, which is a process that makes my blood boil, so I was happy to stay with them.

I didn't think $1100/year was bad for a year round in water live aboard on the great lakes with the risk of ice damage etc.
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Re: Cruising vs. Passages

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Pretty standard they pay 1/2 for a haul. September is hurricane month. Issue has always been is it worth the money to relaunch after the storm goes by. The hassle for the yard is to move boats around after the storm to get those staying on the hard in one bunch and the others wet again.
Not an issue on the Chessie where the season goes much longer


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post #78 of 137 Old 09-21-2019
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Re: Cruising vs. Passages

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What continues to burn my butt is my boat is at greater risk in RI than the southern bays of Grenada during hurricane season. But my premium doesnít reflect that fact.
Similarly believe my boat is more likely to generate a claim coastal cruising than on passage and again my premium doesnít reflect that.
I know my boat is safer (less likely to develop a claim) in my hands then when crew is on watch. I know my boat is safer when being run by me than a delivery captain. All damage on passages has occurred from crew or on the one occasion I used a paid captain. My premium doesnít reflect that and the next policy requires three on board. Just not congruent to reality.
In short insurance vendors know if I want to live my life the way I want to I have no choice. Facts donít matter in spite of what some of the above posts say. To say itís Adam Smith just isnít true. Itís whatever the market will bear and the market is distorted.
Is your boat safer in your hands for a lightening strike ?

Donít you think because you as a cruiser travel more miles a year that your are more at risk for an insurance company than say a weekend warrior like me?

Donít you think you are more of a risk with all the mechanical gadgets and electronics on your boat you are a greater risk than most?

It is to your advantage that weekend warriors like myself with less expensive boats are in the same pool as you are, we basically subsidize your insurance. At least with cars the differentiate the use in miles.


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post #79 of 137 Old 09-21-2019
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Re: Cruising vs. Passages

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I was caught off guard by the increased cost east of Quebec. I called just to let them know that's where I was going and they said, I by the way, we are going to charge extra for that. But it wasn't a ton of money and they didn't bug me for up to date surveys, which is a process that makes my blood boil, so I was happy to stay with them.

I didn't think $1100/year was bad for a year round in water live aboard on the great lakes with the risk of ice damage etc.
SeeÖ nary a peep from my insurance company when we told them we were not only sailing to Newfoundland via the St. Lawrence, but that we planned to stay there for many seasons. I never wintered in the water, but I looked into it, and again, our plan covered us without additions. And we were paying something like $535 if I remember correctly.

Not trying to one-up Arcb. Just pointing out how disconnected boating insurance rates are from any actual reality. Certainly reinforces the need to shop around. But companies donít make it easy. Of course, why would they? It benefits them to keep insurance looking like a black box for most boaters.
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post #80 of 137 Old 09-21-2019
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Re: Cruising vs. Passages

Iím guessing most arenít very knowledgeable of statistics and math, even when they are pretty smart on other matters. One company's risk will be different from the next, solely based upon their predicted risk pool. Ie. How many policies they think they will sell, based upon a given premium calculation. Whether they win or lose that prediction is what business is all about. No guarantees. Insurance companies go bankrupt, just like any other business. They all guess differently and certainly arenít going to let their competition know what there assumptions might be.

Some are even perfectly willing to expect losses, while they build statistical mass, giving a false sense of economy. Some lure in their clients will a losing premium, hoping to raise it later. Itís more complicated than it looks to the consumer. I doubt very much many of them are making a killing on recreational marine insurance.


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