Announcement

Collapse
No announcement yet.

My annual vessel insurance rant-gctid350355

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    My annual vessel insurance rant-gctid350355

    Most of you know I specialize in marine insurance. As a practical exercise in understanding marine insurance, I have a part of my presentation I call the ÔÇ£4 points of doomÔÇØ:

    A boat owner gets a phone call that his boat just exploded and sank; there is damage to the dock and 2 surrounding boats, about 50 gallons of fuel is leaking from the boat, and the marina manager is telling you are responsible for removing the sunken vessel.

    Look at the recent headlines from here in Seattle:

    ÔÇ£December 31, 2011- 50-foot yachts destroyed in 2-alarm fire at Edmonds Marina. Two 50-foot motor yachts were destroyed in a spectacular two-alarm fire at the Edmonds Marina early Saturday morning. Damage to both yachts and the dock is expected to total more than $600,000.ÔÇØ

    ÔÇ£January 31, 2012- A 40-foot boat that exploded at a marina on Washington's Olympic Peninsula Tuesday evening broke windows, inflicted shrapnel-type damage on other nearby vessels and seriously injured a 78-year-old man, firefighters said.ÔÇØ

    1 month. 3 boats. Including the cleanup costs, damage to other vessels, etc- well over $1,000,000 in damages. Bet these owners thought the same thing too many boat owners thought:

    ÔÇ£That can never happen to me.ÔÇØ

    Let me tell you, marine losses happen all the time, to all types of folks- rich and not so rich, megayacht owner and runabout owner, power and sail. The bigger question should be:

    ÔÇ£How does my policy cover and protect me?ÔÇØ

    Let me be blunt- if your vessel insurance policy if bundled up with your homeowners policy, IÔÇÖll bet that you coverage is inadequate at best. Odds are that the policy is no more than a glorified auto policy, and it does not address marine specific areas of concern like pollution, salvage/wreck removal, coverage for hired workers, and more.

    Today is the closing day of the Seattle Boat show. Thousands of people attended the show, getting all the latest and greatest gear for the upcoming boating season. When was the last time you took the same enthusiasm and time to make sure your vessel insurance is correct for your boating needs?

    Some of you will experience a marine loss this year; whether a total loss or a partial loss, the worst time to find out how your insurance covers you is at that time of loss. You need to find out what type of coverage you have as a regular part of your pre-season checklist- and the premium cost should be secondary to ensuring you have the right coverage. Here are your marching orders:

    1) Read your policy (because nobody ever does)

    2) Get a highlighter, and highlight the parts that confuse you. An insurance policy is written by legal beagles, and is not meant to be understood by mere mortals.

    3) Call your agent. Ask him/her if you are covered for things like agreed value, pollution, salvage, Jones Act (hired workers), permissive use, mechanical breakdown, etc.

    4) When the agent tells you ÔÇ£yes, you are covered, break out the policy and have him/her SHOW you where the coverage is outlined in the policy wording.

    See you on the water!

    #2
    +1 This is why I have been with anchor marine for years.

    Comment


      #3
      i have to admit, I'm not as pro-active as you suggest. I have howevr read my policy and i think I have the coverage I need.

      Comment


        #4
        Great thread, Pete. :coo- I too will be going over my policy!
        Rick E. Gresham, Oregon
        2850 Bounty Sedan Flybridge model
        Twin 280 HP 5.7's w/ Closed Cooling
        Volvo Penta DuoProp Drives
        Kohler 4 CZ Gen Set

        Comment


          #5
          I am a stickler when it comes to that now.. learned a very valuable lesson 3 months ago about insurance. My LOCKED truck and 6 others in our driveway were broken into. The alarms never went off.. My sons very expensive meds that I have to keep in various places all over town (ie: school, hospital, truck, boat) got stolen from it, along with my I-touch and I-pod hidden in the glove box. The thieves missed the fanny packs with more meds in it on the seat backs. When I called State Farm the lady stated "oh I am sorry we dont cover that in your truck, thats personal items"...WTF, whats truck insurance for?. yeah not... its considered HOUSEHOLD GOODS. well, since we are renting from my family owned complex.. its RENTERS insurance which we didn't have.. well, I went right down and got a policy..

          Renters Insurance covers everything in your= CARS, BOATS, PERSON... if you loose something on vacation, stolen or whatever its covered.. for 26.00 a year its well worth it.. specially for a boat when ummmmmm the Sherpa's and :arrCAPTAIN :arrdrop things overboard into the bay.. (opssnickering)

          Comment


            #6
            I've read my policy, and although not completely simple, I found the way Boat US words everything to be decipherable. I also had a second, totally unrelated agent review it and offer an analysis and comparative quote. As far as I know, you can always get this done, as the other agent is looking to take your business from them. In my case she said I am very well covered and she couldn't touch the price.

            So Pete, do you have an opinion on coverage limits for a boater in an inland lake? I've got 300k on liability, agreed value just under replacement cost of a similar boat, depreciation waiver, $25k medical per family member/$10k medical non-family, $2500 personal effects, and $854k for environmental damage.

            Comment


              #7
              RinnyBeth wrote:
              I am a stickler when it comes to that now.. learned a very valuable lesson 3 months ago about insurance. My LOCKED truck and 6 others in our driveway were broken into. The alarms never went off.. My sons very expensive meds that I have to keep in various places all over town (ie: school, hospital, truck, boat) got stolen from it, along with my I-touch and I-pod hidden in the glove box. The thieves missed the fanny packs with more meds in it on the seat backs. When I called State Farm the lady stated "oh I am sorry we dont cover that in your truck, thats personal items"...WTF, whats truck insurance for?. yeah not... its considered HOUSEHOLD GOODS. well, since we are renting from my family owned complex.. its RENTERS insurance which we didn't have.. well, I went right down and got a policy..

              Renters Insurance covers everything in your= CARS, BOATS, PERSON... if you loose something on vacation, stolen or whatever its covered.. for 26.00 a year its well worth it.. specially for a boat when ummmmmm the Sherpa's and :arrCAPTAIN :arrdrop things overboard into the bay.. (opssnickering)
              Pretty accurate, Rinny, with some caveats....

              Yes, a homeowners or renters policy will cover your personal effects worldwide (subject to the specific policy wording); at the same time one needs to look at the specifics of the policy like deductibles, which policy is primary and which is secondary/excess, items that are covered or excluded, etc. IMO the worst thing one can do is rely fully on a homeowners policy for vessel coverage.

              Hence, the Number One of my list above- read your policy.

              Comment


                #8
                SwampNut wrote:
                I've read my policy, and although not completely simple, I found the way Boat US words everything to be decipherable. I also had a second, totally unrelated agent review it and offer an analysis and comparative quote. As far as I know, you can always get this done, as the other agent is looking to take your business from them. In my case she said I am very well covered and she couldn't touch the price.

                So Pete, do you have an opinion on coverage limits for a boater in an inland lake? I've got 300k on liability, agreed value just under replacement cost of a similar boat, depreciation waiver, $25k medical per family member/$10k medical non-family, $2500 personal effects, and $854k for environmental damage.
                Carlos, at a minimum, your coverage seems pretty solid for your style of boating. As a general rule, I prefer to see $500k liability coverage, due the the unfortunate fact that we live in a litigation heavy society (plus, the price difference is only about $30/year).

                Some things to thing about- Boat US applies a deductible to partial or total losses; also, any type of overheating machinery loss is specifically excluded. You do have salvage coverage with BoatUS, but only up to the ACV (Actual Cash Value) of the vessel vice the agreed valuation as on standard yacht policies. Another sticky point- under the liability coverage, the cost of duty to defend (legally respresent you) in liability matters is included in the the overall liablilty coveage, and once those funds are exhausted, their duty to defend and settle ends. Under most yacht policies, cost to defend is in addition to the liability coverage.

                Translation; you have a boating lawsuit brought against you, and BoaUS is representing you. You have $300k liability coverage. The judge finds against you, and orders you to pay $300k in damages. The cost for BoatUS to defend you is $250k, which your policy pays, and the policy pays the remaining $50k as damages on your behalf. The remainder of the $300k damages comes directly out of your pocket.

                Comment


                  #9
                  that I was thinking of asking you some questions about US boating insurance! This is due to the questions I have about if you put in new engine(s) in an old boat! What if there is a total loss? By fire or what ever you stated above. Is a different insurance needed for the new engines apart from the original going value of that boat when bought minus a certain percentage of depreciation? To make it clear if possible suppose I have an elder Trophy I swap the engine and replace it with a new one of brand X. boat burns to the ground what will the insurance company pay? or better what are the posibillities?Should I be mandatory to keep the insurance company informed I made the change?

                  Comment


                    #10
                    Roel Jansen wrote:
                    that I was thinking of asking you some questions about US boating insurance! This is due to the questions I have about if you put in new engine(s) in an old boat! What if there is a total loss? By fire or what ever you stated above. Is a different insurance needed for the new engines apart from the original going value of that boat when bought minus a certain percentage of depreciation? To make it clear if possible suppose I have an elder Trophy I swap the engine and replace it with a new one of brand X. boat burns to the ground what will the insurance company pay? or better what are the posibillities?Should I be mandatory to keep the insurance company informed I made the change?
                    Roel, your policy should always allow for hard upgrades done to a vessel; in your example, if you have a $20k repower to your older Trophy, you have increased the value of the boat, and your insurer should allow for that addition. There may be an increase in premium for the increased valuation, butif you have a total loss, you would be paid that increased valuation (assuming you have an agreed value policy).

                    Comment


                      #11
                      When I did upgrades to a previous boat and asked for an increase in the agreed value, they required me to show receipts and photos for the work done in order to justify an agreed value above the standard ACV of a similar vessel without the upgrades.

                      I'll ask Boat US about the $500k limit, and raising the agreed value based on upgrades already done.

                      Comment


                        #12
                        SwampNut wrote:
                        When I did upgrades to a previous boat and asked for an increase in the agreed value, they required me to show receipts and photos for the work done in order to justify an agreed value above the standard ACV of a similar vessel without the upgrades.

                        I'll ask Boat US about the $500k limit, and raising the agreed value based on upgrades already done.
                        Another way to go is to obtain a Personal Excess Liability Policy, aka Umbrella policy. Usually available in amounts of one or two million dollars, these cover everything over and above your underlying auto, home and boat policies, usually requiring underlying limits of $300,000. For instance, my $1M umbrella through Geico is $352 per year, with underlying policies on our house, a rental, two boats, 3 cars and an RV. Worth checking out...
                        Jeff & Tara
                        (And Ginger too)
                        Lake Havasu City, AZ

                        2000 Bayliner 3388
                        "GetAway"
                        Cummins 4bta 250s

                        In memory of Shadow, the best boat dog ever. Rest in peace, girl. July 2, 2010

                        Comment


                          #13
                          Pau Hana wrote:
                          Roel, your policy should always allow for hard upgrades done to a vessel; in your example, if you have a $20k repower to your older Trophy, you have increased the value of the boat, and your insurer should allow for that addition. There may be an increase in premium for the increased valuation, butif you have a total loss, you would be paid that increased valuation (assuming you have an agreed value policy).
                          Thanks a lot for your reply! My policy here is based 100% on the amount my boat has cost. I paid about Ôé¼ K 177 and I have insured it for Ôé¼ K180 for the boat and Ôé¼ 25,000 for Electronics and that kind of stuff. So if I replace one or two engines, at a total loss it will be K180 and the real amount of my electronics. I could ask for a revision of my policy but than depreciation would play a for me negative role during the duration of the policy.

                          When I would insurance for a used boat and it goes wrong, I get what the estimated price of the boat is not what I paid for it or my upgrades. The insurance fee is much lower because of that. So if I understand it right if you don't have an agreed value, and putting a lot of money in an old boat and some thing goes wrong than you can lose a lot of good money? Over here that's for sure!

                          Comment


                            #14
                            jeffw wrote:
                            Another way to go is to obtain a Personal Excess Liability Policy, aka Umbrella policy. Usually available in amounts of one or two million dollars, these cover everything over and above your underlying auto, home and boat policies, usually requiring underlying limits of $300,000. For instance, my $1M umbrella through Geico is $352 per year, with underlying policies on our house, a rental, two boats, 3 cars and an RV. Worth checking out...
                            Umbrella policies add peace of mind, for sure- remember that they cover only liability related events, and do not cover specific marine related events like pollution and salvage/wreck removal.

                            Think of an umbrella this way- it's extra coverage that covers others against the damage I can do to them. It only covers me for legal defense and legal settlement.

                            Jeff- you should take some time and read that GEICO policy, as it's more of a marinized car policy than a true watercraft policy.

                            Comment


                              #15
                              RinnyBeth wrote:
                              I am a stickler when it comes to that now.. learned a very valuable lesson 3 months ago about insurance. My LOCKED truck and 6 others in our driveway were broken into. The alarms never went off.. My sons very expensive meds that I have to keep in various places all over town (ie: school, hospital, truck, boat) got stolen from it, along with my I-touch and I-pod hidden in the glove box. The thieves missed the fanny packs with more meds in it on the seat backs. When I called State Farm the lady stated "oh I am sorry we dont cover that in your truck, thats personal items"...WTF, whats truck insurance for?. yeah not... its considered HOUSEHOLD GOODS. well, since we are renting from my family owned complex.. its RENTERS insurance which we didn't have.. well, I went right down and got a policy..

                              Renters Insurance covers everything in your= CARS, BOATS, PERSON... if you loose something on vacation, stolen or whatever its covered.. for 26.00 a year its well worth it.. specially for a boat when ummmmmm the Sherpa's and :arrCAPTAIN :arrdrop things overboard into the bay.. (opssnickering)
                              So last summer a friend threw my anchor overboard into Lake Whatcom...it wasn't properly attached, so it is still in Lake Whatcom.

                              Covered by renters insurance?

                              Comment

                              Working...
                              X