2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase... - Page 3 - SailNet Community
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post #21 of 48 Old 06-05-2018
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

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Originally Posted by TakeFive View Post
Agreed, that's how the game works. I'm just wondering, in my 8 years with BoatUS and zero claims, why am I in the 26% increase pool while other Chesapeake sailors (some who have had claims) seem to be in the 0% increase pool?

We received increases both times the years after the incidents which was appropriate IMHO. ( last incident 5 years ago)

I don’t think I should be penalized for that when I already paid the price.

Not sure why yours went up this year and mine did not.

I am sure there is some kind of statistical algorithm that they use that makes a distinction between us. Even if we had the same risk factor .

That factor may be built into what we actually in real dollars pay. For all we know we pay the same real dollars.

If you feel comfortable we could share that figure off line in a PM.


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post #22 of 48 Old 06-06-2018
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

My understanding was that insurance companies make their money by INVESTING not from premiums. If this is the case... which makes sense to me... their premiums should not be driven my losses they pay out.... especially is their investments and the market are performing well. I believe that was the case.

'How Do Insurance Companies Make Money?
Insurance Q&A: “How do insurance companies make money?”

An insurance policy is a contract, or a promise, between the insured (you) and the insurer (insurance company). The insurance company collects a premium from you for the issued policy and agrees to pay for any covered losses you suffer. It sounds like a pretty simple business model for earning money, but can be quite complicated.

Insurance companies are like any other business in the world. They have to make a profit to stay in business. There are two basic ways this can be accomplished. They can earn underwriting income, investment income, or both.

Investment Income

This unique situation allows insurance companies to invest that money while it’s not being used. Huge profits can be reaped, or lost, as a result.

This is exactly why Warren Buffet formed the Berkshire Hathaway Insurance Company…so he could generate capital to invest in the stock market."

any comments?
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post #23 of 48 Old 06-06-2018
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

Their investment profits are gravy, the pooling-risk side still has to more than break even.

More susceptible boats and usage patterns carrying greater increases would be logical, but who knows, up to each company.

For sure, as extreme weather events become more frequent and less predictable, rates have to rise across the whole pool.

I believe certain risks will just become impractical to insure, so people will have to choose between stopping completely, or playing bareback, roll the dice with self-insuring.

Is the large-fleet chartering biz even coming back, say in the BVI?
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post #24 of 48 Old 06-06-2018
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

I agree with SanderO on this one.
It's just like the airlines continuing to charge a fuel surcharge even after the fuel prices dropped significantly. They, as are the insurance companies, are just trying to make exorbitant profits by screwing their customers, which has no alternative but to accept it.
Perhaps, if these companies can't survive w/o screwing their customers, then they should go under and companies that will accept a more modest profit level can enter the market.
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post #25 of 48 Old 06-06-2018
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

There are some things which should have NOT profits tacked on... I would say "defense" appropriations is an example. If this was not "for profit" we would see the whole madness for more bigger and better weapons cease.

Health insurance and the health business is another sort of "business" which has too many hands taking a slice. If the health "industry" was considered a "right" profit taking would go down.

Yes in insurance risk is shared...

Let's see these companies open up their books so we can see how they stay in business and return profits when they have deep hurricane losses.

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post #26 of 48 Old 06-07-2018
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

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Originally Posted by SanderO View Post
...This is exactly why Warren Buffet formed the Berkshire Hathaway Insurance Company…so he could generate capital to invest in the stock market."

any comments?
Can't resist one comment, which is probably obvious to most everyone: BoatUS is owned by Berkshire Hathaway. That's probably what you were thinking when you made your post.

As for myself, I'm going to call the guy at IMIS for a quick quote. If one of his companies will accept my two-year-old survey I'll consider switching (or maybe he'll get me a better rate at BoatUS/GEICO, who is my current insurer). If not, I'll probably pay up and shop around next winter while on the hard.

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post #27 of 48 Old 06-07-2018
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

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Originally Posted by SanderO View Post
There are some things which should have profits tacked on... I would say "defense" appropriations is an example. If this was not "for profit" we would see the whole madness for more bigger and better weapons cease.

Health insurance and the health business is another sort of "business" which has too many hands taking a slice. If the health "industry" was considered a "right" profit taking would go down.

Yes in insurance risk is shared...

Let's see these companies open up their books so we can see how they stay in business and return profits when they have deep hurricane losses.
I think you meant to say "not" in your first sentence.

I really don't want to debate politics or economics, but just point out that the only way for your vision to occur is via socializing or nationalizing these industries. Obviously, no one is going to provide the capital for these companies, if there is zero profit, so the government would have to do so, with the tax dollars obtain take from citizens. I understand the theory that this could be less expensive, if done properly.

But think about it broadly. It's not possible to solely nationalize out the profit of a single product. Someone needs to build their buildings, provide component technology, dig raw materials out of the ground, etc, which would still be for profit on government contracts. We all know, when our elected officials have no personal investment in these businesses, their motivation to assign contracts becomes "political" not economic. To actually get all the profit out, you have to nationalize everything. However, look at every coutry that has tried and find one where there isn't a ruling class who has figure out how to be the only one's with wealth. It just doesn't work, despite the best intentions I know you have.

This is not to mention that profit motivates more people (not all people) to innovate. Take our banks and credit unions. The latter aren't nationalized, but have no shareholders entitled to a profit, so are a close analogy. All consumer innovation has come from the for profit side, either banks themselves, or for profit suppliers: ATMs, online mortgage applications, depositing checks with a picture on your smartphone, etc. Zero innovation, just price in credit unions. Yes, the big banks royally screwed the economy, so I'm not saying our current system is perfect. Only that non-profit doesn't work either.

The prize goes to the first to come up with a new construct.


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post #28 of 48 Old 06-07-2018
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

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I think you meant to say "not" in your first sentence.

I really don't want to debate politics or economics, but just point out that the only way for your vision to occur is via socializing or nationalizing these industries. Obviously, no one is going to provide the capital for these companies, if there is zero profit, so the government would have to do so, with the tax dollars obtain take from citizens. I understand the theory that this could be less expensive, if done properly..

The prize goes to the first to come up with a new construct.
To get there is the challenge. But in the case of MIC they could be re-purposed to build non defense projects with their technology/know how... perhaps broken up into smaller for profit and perhaps "not for profit" businesses.

If ROI was limited in the procurement sector profits would attend but they couldn't turn a 1 trillion dollar program into a 6 trillions dollar one. Cost over runs...is the rule not the exception. Way too much of the DOD / MIC funding is just wasteful.

I would argue there is no need for submarines with a military purpose for example.

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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

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.....I would argue there is no need for submarines with a military purpose for example.
Having made the point I wanted to make and with every effort to now step away from analyzing it to death, I intentionally focus here. Why would you think subs are useless? Seems to be a way to put missiles on the doorstep of an adversary, with insufficient reaction time. Brutal, but seems effective. Keeps some allies out of needing to host them too.
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Re: 2018 Boat US Insurance ... underwriter is now Geico, %20 rate increase...

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Having made the point I wanted to make and with every effort to now step away from analyzing it to death, I intentionally focus here. Why would you think subs are useless? Seems to be a way to put missiles on the doorstep of an adversary, with insufficient reaction time. Brutal, but seems effective. Keeps some allies out of needing to host them too.
My last post on this... nuclear war is not only not winnable but it will pretty much ruin much of the planet for human habitation and of course kill millions of innocent people.

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