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Old 06-04-2010, 03:08 PM   #15
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In discussions of insurance coverage I quote the cost of coverage in terms of Percentage of insured value in order to compare insurance companies' price and rates. Although in the past my impression of Australian blue water yacht insurance was that it was significantly higher and more difficult to obtain than insurance in the US, mico's price for his insurance doesn't help us compare to others' insurance coverage. I think that a relative figure is more helpful to others negotiating with their insurance brokers.

The 2004 hurricane coverage in the Caribbean's hurricane Ivan is a sad tale repeated periodically. We've been lucky, but just by the skin of our teeth occasionally. For example, as I related here once before, a broker promised us a better rate for the same coverage we had in the Caribbean, only to learn AFTER we had safely ridden out Hurricane Hugo that we would not have been covered had there been any damage to our boat. If that broker had been on the island when we learned that, he might have found himself swimming for his life.

Then there was the issue with the damage we did to three cruising boats and our efforts to finally get the insurance company to honor its coverage commitment. IMO the broker was most to blame for the delays and lack of response, but around a year after that problem the insurance company filed for bankruptcy, closing its doors to some significant claims. Although some grief might have been avoided had those insured cruisers paid a bit more attention to the rating of the insurer and understood its financial weaknesses, cruisers are understandably more knowledgeable about sailing and maintaining their boat than about the financial ins and outs of insurance companies. However, with in some cases a huge chunk of one's net worth concentrated in a blue water cruising boat, I think cruisers need to devote more attention to this issue, concentrating more on the reputation and financial soundness of the insurance broker and insurance carrier, and less on the price of the coverage.

With regard to insurance company limiting coverage, or denying certain coverage, I just checked again with our insurance company because we are "required" to be out of Florida for hurricane season. What the wording in the policy actually says is that there will be no coverage for damage to our boat in Florida if it is caused by a "named" storm during the policy exclusion dates. However any and all other damage and liability that occurs to our boat in Florida during the exclusion period is covered. Since we may still be in Florida after the start of the exclusion period, this was an important issue for us. The insurance for our sailboat did not totally exclude coverage for tropical storms, but it did drastically increase the deductible for damage incurred as a result of a "named" storm. That policy, also, continued to cover fully any damage during that exclusionary period that was not attributed to a named storm.

With that in mind, cruisers should question the insurance broker carefully about exactly what the limits of coverage are, and shop around to find the best available coverage for their situation.
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Old 06-05-2010, 03:39 AM   #16
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Up until this year we've had coastal cruising insurance with a rider for the Pacific Ocean out 200 miles and as far south as 22 degrees north latitude. We have just changed carriers and brokers and have insurance that can grow with the flow, as they say: either south and through the Canal or across the Pacific. We opted for an agreed-value policy. Not what we have in the boat, but a help should all be lost. From having discussed our concerns with the broker, checked the rating of the underwriting company, and gotten them to write it with riders that work for us, we now pay about 2% of the agree hull value -- at least while we're still in Mexican waters, need only be north of 24 degrees during hurricane season (which allows us to remain in La Paz for as long as is comfortable). It will pay for named storms but at a 5% of total value deductible. So, it is limiting, and yet much less so than the very popular one that was offered to us by our former broker. That one stated that we'd have to be quite far north for the whole of the hurricane season and that when going south wouldn't be able to stop at a number of places they deemed dangerous (no coverage at all if we stopped) or be able to visit say, the Rio Dulce, during hurricane season in the Caribbean. Okay, yes, we could go there, but we wouldn't be covered. Neither of our policies required extra crew. If we cross the Pacific we will probably take crew just to make life easier. But we much prefer just to sail short legs with the two of us.

Our policy covers those who are uninsured and hit us. Considering that there are so many folk out there without insurance, I'm grateful to have that in case they don't carry the same anchoring tackle that we do. We've had to dodge a couple of boats as is, but haven't been hit, praise God.

Perhaps all of this will be money down the drain. But it just takes one incident when we need it, as Jeanne did (let's hope this company pays more swiftly, because we couldn't afford to pay up front), to make it seem worthwhile.

Normandie
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