and costs.
This page updated: April 2007
| Boat insurance types and costs. |
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Please send any comments to me.
This page updated: April 2007 |
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A "true liveaboard policy" covers those situations
which are NOT covered by a typical yacht policy. Those include:
1. Personal Liability (i.e. slander, libel, your dog developing a taste for human legs, etc). 2. Personal Property located other than on the yacht (i.e. your digital camera being stolen from a car). 3. Additional Living Expense if you have to stay in a hotel, for instance, while your boat is being repaired. 4. There are others, but those are the highlights in my opinion. |
Insurance for a cruising boat is determined by 4 things:
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Insurance-buying tips:
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Here's a partial list of US yacht policies classified as to their treatment
of an insured signing away their rights:
Policies which void your coverage if you sign a slip contract or any other contract containing a Hold Harmless Agreement:
Policies which do not necessarily void your policy if you sign that kind of contract:
Policies which specifically give you permission to sign such a contract:
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| One minor point regarding insurance. I think you may have under estimated. This was one of the more difficult things to get, it took me three months of research until I found the right policy and a company willing to write it. Ended up with Zurich's Quartermaster policy. The difficult part was not insurance on the boat itself, or equipment and on-water liability. The problem was finding coverage for off the boat liability and adequate personal possessions coverage. Since we no longer own or rent a home, general liability insurance could not be obtained and none of the marine insurers, with the exception of Zurich, would write such a policy. (We had insurance through Boat US with on-water liability but it did not cover any liability ashore. That policy was less than $500 a year.) Our current policy does include general liability ashore, except auto, and coverage for personal possessions but it costs over $1600 and the replacement cost on the boat is only $50,000. In addition, they are not writing coverage for the Caribbean this year [2000] - I believe you will need to go to a European company for that - at least for this year. Neither are Boat US or West offering coverage in the Caribbean. (Coverage availability for a given area changes more then the wind.) |
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Any boat over 10 years in age will need an out-of-the-water survey.
Assuming your boat is over 10 years of age and if you have plans
to haul her, get her surveyed then. The insurance companies like
this done even if you get "liability only" and don't
bother insuring the hull. Why? If the darn thing sinks,
all of your passengers can sue you and the liability will kick in.
Higher deductible does lower the premium, until you get to about 5% of the hull value, there isn't much savings after that. Many see insurance as a commodity. It really isn't. Every insurance company writes their own contract. Each one is different. Nothing is the same from one insurance company to the next. Many insurance companies expect to have a relationship with their insureds. That relationship includes longevity (are you hopping from company year to year shopping the best price? Many don't want a shopper, there's no commitment). ... What type of policy limits? There are two primary ways to insure the hull, 1. Actual Cash Value and 2. Agreed Value. Actual Cash Value includes depreciation, anyone wish to argue what one J/24 is worth of the same model year vs. the next? This is a guaranteed hassle and I would never recommend it. In the Agreed Value policy, you and the insurance company agree to what it is worth (again the survey will be a big pointer to the value). If the boat is lost at any time during the policy period, you get the amount that was agreed on, no depreciation, no hassles. In the liability section (Protection and Indemnity to us insurance geeks), you could meet your club's minimum, or you could imagine what things might hit the fan. Your boat cuts across the track of a cruise ship and knocks it out of service for a day (lost revenue will be above $1,000,000). I said your Boat, not you, so calm. Your boat runs over a swimmer, cuts them up pretty good (even that Cuban beauty Gloria Estafan did this). Hospital bills, recovery, lost consortium (biggie), permanent disfigurement can add up quickly. What if your boat beans some guest in the head with the boom? Concussion, coma or death? It is up to you to pick an amount of liability. In today's hospitals it is not hard to burn through $300,000 for a goodly accident, $500,000 will cover almost all and $1,000,000 will take care of everything except the real worst case scenarios. By the way, you will find the difference in cost between $300,000 and $1,000,000 extremely cheap. |
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... [Does] it cover "Live Salvage," and "Wreck recovery
when ordered to do so by CG in navigable waters?"
Ask if it automatically includes coverage for the U.S. Jones Act? Live salvage is when you go to rescue someone and while doing so, you injure the victim. Say your prop cuts off the foot of the victim you are pulling out of the water. Now, normally in insurance policies, if you intentionally cause injury (intentional acts), they are not covered. So a policy needs to be modified to include injuries sustained while salvaging a life. Weird stuff, I know, don't shoot the messenger. If your boat sinks in a navigable waterway and the insurance company determines it's a total, they can issue a check for $50,000 and walk away. Now if the USCG comes along and says that it is obstructing navigation, and it must be removed, your insurance company can say (if you bought a cheapo policy) that you pay for it, its not their responsibility. The better policies include this as part of the liability section, with no reduction for the loss of your boat. The Jones Act is a real nest. It has been applied to paid crew, but volunteer crew on sailboats have sued under this and have been successful. The three lawful tests include, did the crew contribute to the journey? Yes, he was my main trimmer. Did this occur on federal waters? And this has been stretched to, if a canoe can make it from a federal body of water and not hit bottom, it will apply to that body of water that may not be considered federal waters. Was the injured crew under the direction of the captain? Duh, yes. Then this crewman is considered a Jones Act Seaman and can receive Care, Cure and Maintenance. What this means is, you pay his doctor bills, until he can no longer have his injuries cured any better and you pay a daily stipend to cover meals, housing, etc. These can be really expensive. The good yacht insurance companies include Jones Act (by not excluding it) while the cheapo's exclude it. Be vary wary, every personal umbrella I have read will exclude "injuries covered by Worker Compensation, Long Shoreman's and Harborworkers Act and all other similar acts." So while you might have a $300,000 liability limit on the boat, and a $1,000,000 umbrella, it is inadequate for a Jones Act claim. So what you do is have a liability limit (P&I) of $1,000,000 on your boat so you have enough to cover a Jones Act claim. |
| ... review hull insurance coverage to be certain it covers IN WRITING IN THE POLICY DECLARATIONS OR BY ENDORSEMENT every inch of the waters for which you believe you are insured. ... Similarly, if you are covered only for "coastal" cruising get in writing what that means ... If the agent says "Don't worry, you're covered", but you can't get an explicit endorsement - WORRY. ... |
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Preliminary quotes ... Annual premium for an agreed value of $40,000 (hull coverage),
bodily injury and property liability at $300,000 medical
at $5000 and with a deductible of $1,000: BoatU.S.: $279 West Marine: $625 USAA: $1301 This is a 34'8" sailboat with outboard aux, primary cruising area Albermarle and Pamlico Sound with option of purchasing extra cost offshore and Caribbean rider. Owner has 34 years sail experience with clean driving record and zero past marine insurance claims. ... |
| Read the fine print!!! BoatU.S. jacks their deductible up to 15% for hurricane damage which is really the one threat we're most worried about. On our $60k boat, that means if she were lost to a hurricane, we'd be out $9,000!!!!! All the other policies we've looked into have the standard 1-2% deductible no matter what the cause of the loss. IMHO, BoatU.S. insurance is a rip-off!!! |
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When your worst fears are realised, what then?
We were planning an early start on saturday for a day sail to test out some new equipment so camped onboard. I woke during the night to clanging and gurgling coming from the boat in the next dock, so I got up and poked my head out of the hatch into the arctic night to have a looksee and to my horror the pretty little ketch next to us was no longer there but replaced with a mast sticking out of the water at a very contorted angle twisting the whole dock pontoon with it. I quickly dressed and rang the marina after hours number who in turn contacted the owners. In the morning it was a sad sight to see a full grown man in his fifties on his knees crying like a baby with tears streaming down his cheeks. We brought him on board for a hot drink before a discussion with the marina management on the best course of action to take next. Divers positioned slings around the hull as a 60 ton crane reached over precariously from the carpark and plucked the boat from its fate to flush deck waterline. Then fire pumps emptied the water until the crane lifted her out into a cradle. He had no insurance with nearly his entire life savings invested on this boat. All the electronics on board, wiring, fittings, galley, timber veneer were ruined. The whole boat needs to be gutted and rebuilt. The poor man is broken in pocket and spirit just staring blankly at his boat as I write this. The sinking was attributed to a cracked seacock and faulty auto bilge pump. To add insault to injury the marina is charging him for the clean up of an oil slick from the sinking, which fouled other boats. I know many cruisers who don't have insurance and are prepared to "risk it" but after seeing this incident my view on insurance has changed, also to include the incidentals like the spillage which looking like costing thousands. |
| I got a good quote from Allstate, it was around $240/year for over $80K coverage with a $500 deductible. I have Allstate for my home owners and just had a claim, I was rudely awakened to find out that there are charges for having a claim! I had a $500 deductible, but the policy will go up by $130/year for 3 years and also lose a 10% claim-free discount for 5 years. This effectively brings the deductible to over $1000. This is false representation in my mind and a form of fraud. This was the first time I have had a claim with a home owners policy and I have had policies for over 18 years! Call your agent and find out how much it will REALLY cost to have a claim. |
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ahhh ... the rub there. you gotta have a drivers license. how stupid. since I do NOT have one, getting insurance on my ericson 27 has been impossible. it is why i may end up being tossed from my marina. one of the arguments i get, is that i need insurance to own a car ... but since i do not own a car i do not need vehicle insurance. i cannot get a drivers license for a lot of reasons ... all of which have nothing to do with my driving ability. one company would do it, then realized my boat was worth under 30k and 30 yrs old ... back to square one. |
| Insurers are using more factors to make their decisions these days, including factors designed to see who is "conventional" and "responsible". Could be they have decided that if you can't get licensed -- there's a reason they don't want to insure you. Among other things, a license lets them see if you have an accident and claim history. They don't want people who have "claims" paid out, at all, for anything. But Florida and most other states will issue a non-driver's ID, and many places that say "Drivers license?" will accept that instead. |
| As for the Driver's license problem causing insurance problems ... When you get your new license after you haven't had one for a year [in Florida at least] the insurance companies put you in the same risk category as a 16 year old with a lotta tickets [usually the highest risk category]. If you go to buy a car and need insurance ... well, take a BIG checkbook along. It's usually cheaper in the long run [and short] in Florida to keep your license. You don't need insurance as long as you don't own a vehicle, and you'll save on boat insurance, too. ... |
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Be accurate in your insurance amount, particularly if you have an AGREED
VALUE POLICY.
I had an 8 year old boat originally insured as AGREED VALUE at its purchase price, $300,000. As the years went by, I never reduced the coverage amount. In case of a total loss I would actually have received $300,000, even though the Market Value might not be more than $250,000. So why do the Insurance Companies go along with excess insurance ? Simple: there are probably 100 fractional losses for each total loss, and for fractional losses the DEDUCTIBLE is the secret. I had a fractional loss, and with 2% deductible (not on the loss, on the insured amount) my deductible was $6,000. Had I changed the Agreed Value to the more proper $250,000, my deductible would only have been $5,000. So for fractional losses, your most likely loss, I have paid extra premiums only to have higher deductible. That is why insurance companies have all the money: they are smarter than we are. |
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... Although it is possible to get insurance for just about anyone to go anywhere,
in whatever way they choose, you'll have to dig even more deeply into your pockets
for the privilege. ...
... Even before they consider taking on your vessel, the insurers will start to influence your decisions and therefore, your freedom. ... ... Having told you what type of boat you are permitted to sail and whom to take with you, the insurers will then start hedging their bets by telling you at what time of year you must sail and how far you may go. ... your insurance may actually force you to leave before you are fully ready or on a dubious forecast, because you are being pushed by the provisions of the policy. On arriving at your destination, you may then find on checking the small print, that you need to be based at a marina. ... ... the first thing to do is to ask yourself what would happen if you lost your boat. Will you be destitute ? ... you have to be able to afford to lose your boat. ... [Putting aside money yourself and self-insuring, you earn interest on the money, and the same money insures against other problems such as medical bills.] If you have a boat that you can't realistically afford to lose, there are only two alternatives: you insure her and take all the drawbacks that come with that, or you sell her for something cheaper and probably smaller ... The fatal flaw in the above argument is third party liability [damaging someone else's boat] ... [avoid/minimize use of docks, marinas, crowded unsafe anchorages] ... ... At the end of the day, it's a personal decision and depends on how much sense of security insurance will give you. ... Freedom is never very safe. ... |
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The one time I did damage to another boat, in an 85-knot microburst during a
thunderstorm here in St Augustine, I sent the other boat owner the $3K she
requested but apparently she smelled money and took me to court. The judge
determined that I did everything I should have done and she did not (she
neglected to make fast the bitter end of her anchor line resulting in
beaching against a seawall). He ruled that I was not negligent and she
must return my check.
From what I understand about the liability situation, one must be found negligent in order to be found responsible for damages, so that if one does everything expected of a reasonable and prudent seaman liablity insurance is not needed, and at the same time, if one does not do this, the insurance company may not pay for damages. |
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[Boat grounded and hull breached in Keys; towed to yard] ... it appears that my insurance doesn't have a separate salvage provision, which means that whatever it costs to salvage will be taken out of the total value, severely limiting my options WRT repair or replacement, as, if it's totaled, the remaining mortgage will eat most if not all of it, and certainly will reduce the funds available to make her whole again. ... [Later:] So far, Allstate is paying the entirety of the policy other than portable equipment, as it's described, and they've continuously asked us for the list of those items. That is, they're already agreed to the amount of the face value on the decs, plus 5% for salvage, plus $1000 for personal effects, $100 emergency money, plus, if it turns up, up to $2k of medical (no bill [yet] from the USCG, but there was an ambulance ride and my checkout at the ER), and the "portable equipment" stuff. I've just sent off a list of what we know of that I don't consider part of hull coverage; we'll see if there's any fussitation on those items (I expect not, from what I've seen so far). Things like sails, anchors, some separate electrical items, wind and solar generators, etc., which we'll see how they play. At this point in the game, I believe they may just say that's enough to not bother with itemization, and pay us that total, too. However, I'll wait to see what they say. At this point they've already cut the salvor's check, and are anxious to pay off the bank - all with no written commitments from us. So far I have no complaints ... [And more later:] Many have wondered about our end results with the insurance side of things. I had an entire message to a couple of the mailing lists and forums on which I'm active about the subject but the short story of it is that Allstate gets my vote. However, the good news/bad news stuff is a bit more telling: * As expected, our boat adjuster's coverage decision totaled the boat (the boat was determined to be a total loss, and they would not attempt arranging repairs). Normally that would mean that we would have to give up the boat, or, perhaps, accept a negotiated, lowered settlement, or, have to buy back the boat as salvage, leaving little or nothing with which to rebuild (after pre-existing commitment costs). However, in the course of many email and telephone contacts, the adjuster became aware of all the work we'd done in the last 3 years on our home, increasing the value of the boat. The decision came down: we were under-insured. Bad news, right? No ... Because we were under-valued (the boat was worth more than it was insured for), they had no salvage rights. Instead, the entire value of the policy would be paid, and we'd retain ownership. * That means: The salvors - those many folks who got Flying Pig off the dry rock it was banging around on - were paid off. The mortgage was paid off. And there's enough left over to provide a boating kitty against future disasters. So, in the end, it's about as good as it can get. We're being paid for sail repairs, but none of the external gear which took off/wrecked, other than the MOB pole, which broke, and the anchor, which self-launched and was gone before I could figure out the sound (not that I'd have wanted to go topsides to do anything about it in the middle of the night and a storm) of the chain rattling out of the hawse hole. So, there will be a few hundred more than already paid out. As mentioned elsewhere, we're very happy with Allstate. Given that it was not a "true marine" policy, we got the very best we could have other than a bunch of miscellaneous stuff which they considered part of the hull (electrical/electronic stuff). True, had we been paying the more-than-$3k-higher true marine policy, for the last three years we've had the boat before the accident, we'd have had the salvage covered separately, and have had more money in the end. However, there might not have been the instant decision to consider us undervalued, and a salvage position taken where we wouldn't have retained the boat. Unless we knew we were going to wreck, and that it would require a salvage operation to extract what turned out to be a substantially whole boat, we'd still do the same again (other than not run aground in such a fashion, of course!). Of course, we're currently uninsured/uninsurable, but have the confidence that short of a whale getting upset at us and sinking in deep water, we're able to fix anything which happens, and still survive. |
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Yes, this is 'kind' of an "I told you so" post, but it's also meant to reinforce
what I expressed about USING your insurance when you need it.
Some of you may recall that I blew my port engine last January. It was 20 years old, so did not feel bad about it whatsoever. Anyway, on a whim, I decided to check with my insurance company (policy was about 45 days old). They said they would send a surveyor to investigate. Well, we all already knew that the engine threw a rod and that a new replacement was called for, but the surveyor persuaded me to move forward with the investigation and that I would be pleasantly surprised. Here's the net - EVERYTHING done PRIOR to the blown engine sitting on the engine stand was covered. At $10/ft haulout, that's $450, and then the labor to remove the engine (and related components, settee, etc) came to about another $1200. So add those two together and that's the amount of the check I received. Because the surveyor did what we already knew he would do, deny the claim, it was a 'no-claim' situation, but hey, $1600 is nothing to sneeze at. So anyway, I took a lot of grief from some salts around here about making the claim, insisting that I would be dropped, or that my rates would skyrocket. I even talked to the surveyor about that and he was so irritated at that notion. He assured me that nothing would happen. So -- here I am at renewal time with Boat U.S. and lo and behold, I received a 20% 'no-claim' discount on my policy; not dropped, no increase, nothing but a discount. Yes Virginia, Paul knows what he's talking about every once in a while. Don't mean to come off as a jerk to anyone, it was just the talking down to me at the time that I did not appreciate from a few members of the Peanut Gallery! :-) So -- the other point is that you should not necessarily 'fear' your insurance company. They're not always the bad guys. ... Same deal here when I blew a tranny. The shop that pulled the tranny encouraged me to call my insurance company (United Marine Underwriters, underwritten by ACE). Result was the insurance company surveyor found evidence of "impact" (his words) although I was very upfront with him when I told him I never felt any indication of such. Result, $12,000+ covered by the insurance, $2,000 out of pocket. Not dropped at renewal and no increase in premiums. You pay those premiums for a reason ... use it but don't abuse it. ... My insurance company, ACE, reimbursed me $17,000 for a transmission. They didn't raise my rates. |
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I was just [7/2006] notified by my insurance company, National Marine Underwriters,
that they will not renew either of my policies when they come due. In fact,
they are not renewing any for boats over 30 ft and 15 years old or older that are
near the coast.
I think, as a group, we have a big problem coming. Last year they cut back the coverage area and raised the price. ... Since NMU generally was the cheapest and had broader coverage than most, it's bound to cost more elsewhere. I'll probably just go without when my policy expires ... I think the whole world, as we know it (boating and otherwise) is beginning to have some profound changes. |
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I just [8/2006] got some bad news from my current insurance provider (Inamar). They want $5,586 to insure
my 1985 Hans Christian Traditional. This is up from $2,817 last year! I have been calling every
insurance company I can think of to get a better quote. I have been turned down by all of them
for the following reasons:
1. The boat is in Florida (Orange Park, near Jacksonville). 2. There is a hurricane in the Atlantic (Chris). 3. The boat is now 21 years old. So far, I've been rejected by Pantaenius, Progressive, United Marine Underwriters, World Marine Underwriters, Allstate, National Boat Owner's Association, Geico, Empower Solutions, and Admiralty Insurance Agency. I have a perfect driving record, and have never had an insurance claim in the 8 years I've owned this boat. |
| I tried getting insurance for myself, and no one would touch any singlehanding. So I did the next best thing (in my opinion). I got coverage for within 15 nm from land. That's where you need coverage for. |
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I got dropped last year mid hurricane season by my underwriter. They sent us a form letter that stated
they were no longer insuring boats older than 5 years. Almost everyone else we know had the same problem
here in the Kemah TX area. We knew we were planning to leave to go cruising so we went out to all the
usual companies Boat US, Blue Water and a few others for and expanded sailing area but we needed coverage
for the named storms since we would be in the hurricane box for at least the remainder of 2006. All of the quotes
we got back more than doubled in price and excluded damage from all named storms. So we went to IMSI.
They offer the Jackline policy that you see advertised in sailing magazines. Our agent was Pat who is a former
cruiser and licensed captain. She was a pleasure to deal with and we have several other cruiser friends that have
used her as well. For comparison our declared value is $108,000 and the previous policy cost about $1500/year.
It covered up to 15 miles offshore and Texas/Louisiana gulf coast with no storm exclusion. The new policy
covers 250 miles offshore Gulf Coast US and all of the Caribbean except Haiti and one other country.
It costs us about $3200/year and has no storm exclusion. The new policy offered by Boat US was $3600
and covered Gulf Coast only and excluded all named storms. When we questioned why the price was so high they
said it was because we are live aboards! Other companies offered a little lower cost but all excluded named storms.
When we recently asked others about their coverage level and cost we seem to find a huge variation in the price. I don't know if that's because insurance companies are in transition after the hurricane disasters of 2004/5 or that people aren't really telling us the whole story (like they live aboard but haven't disclosed this to the insurance company). It's probably a little of both. |
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... April 2005 I obtained a quote from
BOAT/US for a 20 yr old Amel Mango that we were considering. BOAT/US quoted
a premium of $4965 for $235k agreed hull value and $300k liability, with
cruising grounds limited to Texas Gulf coast. We did not buy that boat.
We later purchased the 2003 Amel SM2 and obtained insurance quotes from three companies, all comparable. Ended up with IMIS Jackline policy covering all of Caribbean down to South America (except Cuba and Haiti) with agreed hull value of $430k and $1M liability for a premium of $4949. ... |
From Felton on Cruising World message board, 8/2000:
From Charles M on Cruising World message board, 8/2000:
Blue Water Insurance and NMU do not do liability-only. I looked for liability-only insurance in 5/2003 for 1973 Gulfstar 44 motor-sailer: NMU doesn't do liability-only. State Farm doesn't do it for big boats. BoatU.S. wouldn't write it, because I anchor instead of mooring or docking. They transferred me to an affiliate who would write liability-only for $2300/year ! Someone said that Progressive offers liability-only policies, but does not cover liveaboards. |
From anonymous in Florida, 12/2000:
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