Boat insurance renewal - again !

[Greg2]

Same story for us when Y went to Topsail - our renewal was high so went to a Nav & Gen policy via Curtis based upon Hirricane’s experience. Stayed with them for a while but our policy increases were notable - they kept offering an alternative (cheaper) policy with an outfit called Tokio Marine - wasn’t confident in them or their offering so lived with the Nav and Gen increases until last year when I shopped around and ended up with GJW.

 

[MapisM]

I don't think I raised this subject before, but every time I come across insurance threads I can't help wondering if I'm alone in considering the insurance premium very poor value for what it offers, to the point of subscribing none at all, aside from the mandatory (at least here in the Med) third party coverage.

Let's face it: with insurances, the nature of the beast is that you pay more than what the statistical probability of a claim for the max amount covered really is.
Simple reason being that if this weren't true, all insurers would be bankrupt and there would be no insurance business at all.
So, it's only worth paying more than what what the risk actually is (calculated with actuarial science, which is what insurers do, in sharp contrast with our gut feeling) if the worst case scenario would be catastrophic, in relation to everyone's personal financial situation.

Now, of all assets, boats are one of the most disposable I can think of.
I mean, anyone pretending that he couldn't live without a boat is either a liar, or should see a good psychologist.
Bottom line, should my boat sink tomorrow, I would just do what sooner or later I'll have to do anyway, i.e. stop boating altogether.
So, what? In the meantime, I'm not saying that with the insurance costs saved over 30+ years I could replace my current boat if I would want to, but pretty sure I could buy a decent one, if a bit smaller.
...and save further on fuel etc., in the process!

Then again, in these threads I can't remember to have ever seen anyone even questioning whether it's worth insure the boat or not, and everyone seem to take that as a given.
But I'd be very interested to check if I'm really the only one who chose to skimp on insurance, and not for saving an amount which is almost negligible in the grand scheme of boat ownership, but for a deliberate choice. So, come out of this particular closet folks, there must be someone else out there who doesn't fancy making rich insurance companies even richer!

 

[benjenbav]

I don't think I raised this subject before, but every time I come across insurance threads I can't help wondering if I'm alone in considering the insurance premium very poor value for what it offers, to the point of subscribing none at all, aside from the mandatory (at least here in the Med) third party coverage.

Let's face it: with insurances, the nature of the beast is that you pay more than what the statistical probability of a claim for the max amount covered really is.
Simple reason being that if this weren't true, all insurers would be bankrupt and there would be no insurance business at all.
So, it's only worth paying more than what what the risk actually is (calculated with actuarial science, which is what insurers do, in sharp contrast with our gut feeling) if the worst case scenario would be catastrophic, in relation to everyone's personal financial situation.

Now, of all assets, boats are one of the most disposable I can think of.
I mean, anyone pretending that he couldn't live without a boat is either a liar, or should see a good psychologist.
Bottom line, should my boat sink tomorrow, I would just do what sooner or later I'll have to do anyway, i.e. stop boating altogether.
So, what? In the meantime, I'm not saying that with the insurance costs saved over 30+ years I could replace my current boat if I would want to, but pretty sure I could buy a decent one, if a bit smaller.
...and save further on fuel etc., in the process!

Then again, in these threads I can't remember to have ever seen anyone even questioning whether it's worth insure the boat or not, and everyone seem to take that as a given.
But I'd be very interested to check if I'm really the only one who chose to skimp on insurance, and not for saving an amount which is almost negligible in the grand scheme of boat ownership, but for a deliberate choice. So, come out of this particular closet folks, there must be someone else out there who doesn't fancy making rich insurance companies even richer!

A good argument; indeed, I believe many public bodies self-insure for similar reasons.

The argument against, however, isn’t quite as simple as whether one can afford to (or chooses to) deal with a loss to one’s own vessel.

For example, say the damaged (uninsured) vessel is worth €500k and that it would cost €200k to fix. If the owner can’t or won’t pay, they face the loss of €500k minus scrap value. Had they been paying for insurance @ 0.5% pa for 20 years they might be sitting on €450k vs €300k if they fixed it or €100k if they didn’t at all.

Perhaps, like the famous Dirty Harry quote, it’s a question of whether one feels lucky and, indeed, what one feels about the consequences of getting unlucky.

 

[Tranona]

I don't think I raised this subject before, but every time I come across insurance threads I can't help wondering if I'm alone in considering the insurance premium very poor value for what it offers, to the point of subscribing none at all, aside from the mandatory (at least here in the Med) third party coverage.

Let's face it: with insurances, the nature of the beast is that you pay more than what the statistical probability of a claim for the max amount covered really is.
Simple reason being that if this weren't true, all insurers would be bankrupt and there would be no insurance business at all.
So, it's only worth paying more than what what the risk actually is (calculated with actuarial science, which is what insurers do, in sharp contrast with our gut feeling) if the worst case scenario would be catastrophic, in relation to everyone's personal financial situation.

Now, of all assets, boats are one of the most disposable I can think of.
I mean, anyone pretending that he couldn't live without a boat is either a liar, or should see a good psychologist.
Bottom line, should my boat sink tomorrow, I would just do what sooner or later I'll have to do anyway, i.e. stop boating altogether.
So, what? In the meantime, I'm not saying that with the insurance costs saved over 30+ years I could replace my current boat if I would want to, but pretty sure I could buy a decent one, if a bit smaller.
...and save further on fuel etc., in the process!

Then again, in these threads I can't remember to have ever seen anyone even questioning whether it's worth insure the boat or not, and everyone seem to take that as a given.
But I'd be very interested to check if I'm really the only one who chose to skimp on insurance, and not for saving an amount which is almost negligible in the grand scheme of boat ownership, but for a deliberate choice. So, come out of this particular closet folks, there must be someone else out there who doesn't fancy making rich insurance companies even richer!

The vast majority of claims on boat insurance are low value for damage caused by the elements, minor collision incidents or theft. Total loss is very rare except perhaps for lower value boats. For me the importance of all risks insurance is for this sort of claim because the cost of repairs is out of proportion to the value of older lower value boats. For example the insured value of my current boat is £36k, but the loss of the rig would be more than half that and I feel happier paying £260 a year knowing that I could get damage up to that value repaired (if it was covered under the terms of the policy). It is very common here in the UK for perfectly good and usable boats to be written off for relatively light damage, although sometimes it is sensible to take the payment and DIY repairs. Another scenario here is making a claim against a third party which can be quite difficult dealing with it yourself rather than claiming on your own insurer and leaving them to deal with the third party.

I think insurance is an individual choice depending on your assessment of the risks and consequences. for example, I have never insured my dogs and cats, even though vets charges have rocketed since it became a "business". Choose robust breeds and look after them well and I seem to win over their 10-15 year life. Similarly I have only once taken out travel insurance (when we went to New Zealand) based on my experience a a business traveller with company insurance where in the 40 odd years of travelling all over the place I only made one claim which was rejected because of the difficulty in getting documentary evidence from Kazakhstan to support it.

 

[Portofino]

0.5 % if we are indicatively using this figure works out at 200 yrs of premiums .If it’s less than 1/2 % then the VFM side of the equation rises .

I don’t think a full comp policy is prohibitively expensive .

Also …..there’s the the removal of the wreck bit , all the environmental malarkey.Don’t assume it’s gonna sink in 1000 m
Not sure a plain vanilla 3 p ( min IT requirement) has this ? If it hasn’t then MapishM s “walk away “ hypothesis is flawed .

 

[Hooligan]

The vast majority of claims on boat insurance are low value for damage caused by the elements, minor collision incidents or theft. Total loss is very rare except perhaps for lower value boats. For me the importance of all risks insurance is for this sort of claim because the cost of repairs is out of proportion to the value of older lower value boats. For example the insured value of my current boat is £36k, but the loss of the rig would be more than half that and I feel happier paying £260 a year knowing that I could get damage up to that value repaired (if it was covered under the terms of the policy). It is very common here in the UK for perfectly good and usable boats to be written off for relatively light damage, although sometimes it is sensible to take the payment and DIY repairs. Another scenario here is making a claim against a third party which can be quite difficult dealing with it yourself rather than claiming on your own insurer and leaving them to deal with the third party.

I think insurance is an individual choice depending on your assessment of the risks and consequences. for example, I have never insured my dogs and cats, even though vets charges have rocketed since it became a "business". Choose robust breeds and look after them well and I seem to win over their 10-15 year life. Similarly I have only once taken out travel insurance (when we went to New Zealand) based on my experience a a business traveller with company insurance where in the 40 odd years of travelling all over the place I only made one claim which was rejected because of the difficulty in getting documentary evidence from Kazakhstan to support it.

i agree. It is a matter of personal choice and assessment of one’s own risk appetite which is probably related to your own financial situation. That said a boat is not like a car where it doesn’t cost much to clear your wrecked car from the road and you may even get scrap value. If your boat sinks while in its berth my guess is that the salvage cost could be quite chunky so it is not a question of walking away. I had a complete loss situation in the early years of boating for me. Not my fault, just one of those unlucky events that can happen and fortunately no one was on the boat at the time and got hurt. The insurance company delivered and made a very stressful situation less stressful. Plus I got back on the water within a year. That is what you insure for so there is more to it than just the premium when there is a catastrophic event. One interesting fact: the insurance assessor told me that almost 80 pc of the claims he dealt with were false ie claims in essence trying to get money out of the insurer for loss, repairs etc etc. Sadly we all pay for this through higher premiums.

 

[Tranona]

Also …..there’s the the removal of the wreck bit , all the environmental malarkey.Don’t assume it’s gonna sink in 1000 m
Not sure a plain vanilla 3 p ( min IT requirement) has this ? If it hasn’t then MapishM s “walk away “ hypothesis is flawed .

Wreck removal is usually covered in third party, although that is becoming uncertain with some insurers requiring a condition survey to add to a third party policy.

 

[MapisM]

0.5 % if we are indicatively using this figure works out at 200 yrs of premiums .If it’s less than 1/2 % then the VFM side of the equation rises.

Yeah, but that "equation" only makes sense under the assumption that the total loss has 100% probability, which is obviously not the case.
Besides, if you take the OP numbers (which are nowhere near 0.5%), that works out at 116 years, not 200.

PS: my 3p insurance, costing not much more than €200 Eur for a 56 footer, does cover wreck removal (up to €15m max coverage).

PPS: I see that so far my choice still remains in a minority of one.
Makes me wonder if everyone is right and I'm wrong... Or vv!

 

[Greg2]

PPS: I see that so far my choice still remains in a minority of one.
Makes me wonder if everyone is right and I'm wrong... Or vv!

I guess that yours is an objective and logical choice but with the boat representing a not insignificant chunk of our net worth and knowing, for example, of at least two boats that have caught fire with one being a total loss and the other requiring costly repair, the emotional part of my brain would ensure that I never stop worrying if I were to go third party only
.

 

[Hooligan]

Yeah, but that "equation" only makes sense under the assumption that the total loss has 100% probability, which is obviously not the case.
Besides, if you take the OP numbers (which are nowhere near 0.5%), that works out at 116 years, not 200.

PS: my 3p insurance, costing not much more than €200 Eur for a 56 footer, does cover wreck removal (up to €15m max coverage).

PPS: I see that so far my choice still remains in a minority of one.
Makes me wonder if everyone is right and I'm wrong... Or vv!

i an staggered that you pay only €200 for your 56 footer. I assume 3 rd party includes damage to people, full value of other boat should you crash into one, and were you to accidentally hit someone in the water etc etc. I couldn’t get 3 rd party for that price on my adult kids’ Polo!

 

[Tranona]

i an staggered that you pay only €200 for your 56 footer. I assume 3 rd party includes damage to people, full value of other boat should you crash into one, and were you to accidentally hit someone in the water etc etc. I couldn’t get 3 rd party for that price on my adult kids’ Polo!

Although that does sound low for his type of boat, third party is generally cheap - for a typical small to mid size sailing boat in the UK it is in the range £1-200. Would expect MOBOs to be a bit more, but it is a very low risk activity. As I noted earlier I pay only £260 all risks on a 31' sailboat value £36k.

 

[MapisM]

i an staggered that you pay only €200 for your 56 footer. I assume 3 rd party includes damage to people, full value of other boat should you crash into one, and were you to accidentally hit someone in the water etc etc. I couldn’t get 3 rd party for that price on my adult kids’ Polo!

You made me question my memory, also because it wouldn't be the first time it doesn't serve me well... And surely wouldn't be the last, either!
So, I checked my files, and in fact only the first digit I had in mind turned out to be right, the last premium being actually €276.
Not sure about renewal which will be due in a few months, but I'd be surprised/annoyed if the first digit would turn into a 3!
Anyway yes, all occurrences you mention are indeed covered. That's actually mandatory, here in Italy.

PS: just for the records, I owned 3P-only insured boats for 30+ years, including 3 years right after the purchase of the current one during which I subscribed a full coverage with Y, but the premium kept increasing outrageously each year, the last quote after they became Topsail being the straw that broke the camel's back, making me revert to my old habits.
And during all this timeframe, I had ZERO claims - touch wood, fingers crossed, etc!

 

[vas]

I'm also in 3rd party for the reasons MapisM explains, but even more so there's no way I could get a valuation for my 50yr old plywood boat, that would be fun, not!
I'm more of a cheapskate than him and only insure it for 6 or 9m and pay around 160-180euro. Have to check if they cover wreck removal though!

V.

 

[Portofino]

When I first got mine in Naples , it’s paper work came with a Generali 3 P ins still in date .
€136 ( 2014 ) .I did read it and it was an annual policy in the owners name .


Habitually and I suppose culturally , lemmin like I just carried on with the old Sunsseker broker I had been using and bought a full comp policy date on the completion .
Mind this shaft drive was now under £500 , compared to the £1200 I was annually forking out for the previous sterndrive boat .So I thought I had a bit of a bargain anyhow……continued addicted to full comp .

10 yrs later iirc I am @ circa under £900 full comp .

That’s about a 1/2 of one fill up price .And I do a few during the season

 

[TonyR123]

I am with Beazley and that also follows the 0.5% of value (£8,500 inc vat, etc )