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Old 02-17-2009, 07:46 PM   #1
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Hey, all,

As member Mico brings up on the Shout box--bluewater insurance isn't always the easiest thing to get. Further, to get it (for a larger vessel) sometimes you've often got to have a minimum crew size while passage making in order to get the bluewater insurance.

Though we know we'll take on crew for especially difficult passages, we do like our privacy and wouldn't want to be "forced" to take on crew for insurance alone. However, we do understand the insurer's perspective on these things as well.

We've always been the sort of folks who have carried high deductables and minimum insurance. We expect NOT to carry bluewater insurance but rather to have the minimum insurance required to for marina and moorage.

I've spoken with numerous cruisers who have "self insured" e.g. no insurance but good ground tackle! And think this is the norm rather than the exception. We fully plan to skip the bluewater policy.

Posing the question to the gang--do you carry bluewater insurance or just coastal? Do you carry anything other than the minimum liability required by marinas in your area?

Looking foward to knowing what others think about the insurance topic.
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Old 02-18-2009, 12:52 AM   #2
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We chose to insure our boat, and for the 17 years we were actively blue-water cruising, we paid between 2% and 2.5% of the insured value each year. *(our coastal cruising insurance on the new, expensive power catamaran, runs no more than 1% of insured value). *Our sailing experience and Peter's USCG captain's license, and the right insurer, meant that we were able to avoid the extra crew requirement for crossings.

Was the insurance coverage worth it? *Yes and no. *Since we had no significant losses, we spent about 40% of the value of the boat for insurance over 20 years without significant benefit. *On the other hand, had we had a total loss at any time, we would have been made whole. *That's worth something, if only peace of mindk. *

We had an unfortunate accident where we ran into 3 other cruising boats in a marina (long story, it's when I was sick in '95), causing several thousand dollars worth of damage to the three boats. *Back then the insurance broker was in a loose association with the SSCA (Seven Seas Cruising Association) and it turned out to be a great agent for getting us insurance, but lousy at responding to claims. *We wound up paying for the damages out of our own pocket and then spent the next 6 months trying to get reimbursed. *It finally happened, but I was SO distressed that the innocent victims of our mishaps were left hanging waiting for somebody to decide to pay for the damage. *Because they were cruising boats, they couldn't wait for six months or more to have their damage fixed! *We were fortunate that we could pay for the repair work ourselves - but it seems that many cruising boats don't have the financial wherewithal to plunk down the cash to fix such damages.

It seems to me that if a cruiser cannot afford to pay for the loss of his boat, or damages he might cause to another's boat, he cannot afford NOT to have insurance. *

IMHO.
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Old 02-18-2009, 01:44 AM   #3
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Quote:
Originally Posted by JeanneP View Post
It seems to me that if a cruiser cannot afford to pay for the loss of his boat, or damages he might cause to another's boat, he cannot afford NOT to have insurance. *

IMHO.
I agree with you on this. I absolutely can't imagine doing damage to someone else's property and not being able to pay for it.

Last year, I talked with an insurance broker who has insured several boats throughout the world. I had the impression from our conversation that I could obtain liability insurance (and hull coverage) by updating the insurer with my new "cruising grounds" info as we go from area to area. This seems fine for someone like us who want to explore each area for several months rather than rush all over the place quickly (e.g. the usual way of circumnavigating these days it seems). However, to obtain insurance during passage making one would need to narrow the insurer choices and increase the cost as well. I know a fellow whose boat similar to mine has been insured via this broker for about 8 years and he's only bought insurance for an ocean passage one time (3 month period) which added about .5% of hull value to the policy for that passage.

I think the extra crew requirements are very individual to the boat and the crew, you're right.
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Old 02-18-2009, 02:00 AM   #4
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Personally my definite tenative plan is to keep insurance while I am in and out of marina working from home aboard for the next few years... once I set off on a circumnav though and live at anchor for the most part I'll drop it and trust on prudence and judgement to keep me out of trouble.
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Old 02-18-2009, 12:01 PM   #5
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After spending the last five years dealing with the insurance industry trying to collect a reasonable settlement we very much dislike the industry and will give them as little as possible... With that said; We are always concerned about the other guy! Insurance to cover any other boat (or boats) ours would damage, or any person injured on our boat is in our opinion manadatory. We'll just call it the responsible way to do things. Otherwise, we will self-insure.

As some of you may know already we are lucky enough to own a back-up boat (Hey, they are both small; let's get two!). But the one that will live on the salt with us is commissioned for the salt much better than our back-up boat, so we'll try to take good care of her!

Insurance limitations as to where you can cruise at what time is obviously meant to protect the investment they have in the safety of your boat... Not a bad thing to consider. But the insurance companies aren't out there, we are...(well not yet), and it just seems to take a bit of the freedom away from cruising. Of course there is always the other side of the coin; If something happens to your boat and you aren't insured and can't afford to purchase and commission another then you aren't out there anymore! For some, it is a necessary evil.

David & Brenda

s/v Friendship & s/v Ceilidh
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Old 02-18-2009, 02:26 PM   #6
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Quote:
Originally Posted by Wildernesstech View Post
Insurance limitations as to where you can cruise at what time is obviously meant to protect the investment they have in the safety of your boat... Not a bad thing to consider. But the insurance companies aren't out there, we are...(well not yet), and it just seems to take a bit of the freedom away from cruising.
I think that there's some misconception about what an insurance company does, and does not, "allow". *I think that you'll find that the insurance company prohibits nothing.

What it does do is set limitations on what losses it will cover. *For example, nowadays most marine insurance will not cover all loss if the loss is due to a "named" tropical storm. *It does not say that you can't be in the tropics during its cyclone season, it just will not cover all the loss if you choose to be there.

It will not cover loss due to war, etc. *So if you choose to go to Darfur, and the local insurgents seize or blow up your boat, the insurance company isn't going to pay you, but it doesn't say it won't allow you to go there.

If the insurance company decides that you and your partner are not experienced enough to do a trans-ocean passage without assistance, it doesn't say you can't go, it says it won't pay if you choose to make the passage without assistance and you lose the boat, or get into trouble and need to pay for assistance.

You've got all the freedom you want, but it comes at a price.

Many years ago we were anchored at Margarita Island, Venezuela when Hurricane Gilbert came through. *Nobody expected a hurricane to reach us in VZ, nobody was paying attention. *Gilbert was a most unusual hurricane - it zoomed almost due west, with virtually no northerly slant to its course. *It took the roof off the airport building in Bonaire, perhaps the first hurricane in living memory to come near there. *It was the strongest hurricane on record (in fact, I don't believe that any subsequent hurricanes have equaled the depth of the barometric depression or the force of its winds). *And when it went over all the boats anchored in Margarita, boats dragged anchor.

One lovely, and very solidly built, boat with a retired couple on board dragged anchor and did significant damage to another boat that it ran into. *Turns out that the owners were too inexperienced to get adequate insurance coverage for the boat (well, there might have been some other reasons that they were uninsurable, but that's not for this thread) and so they were looking at paying for the damage to the other boat out of their own pocket. *Apparently they didn't have enough money, because they pulled out of the anchorage in the dark of night and weren't heard from again. *

*
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Old 02-18-2009, 04:15 PM   #7
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Wonderful insight! Thanks for enlightening me, and everyone else to this misconception! Even inland, the lake that we choose to base our boat on effects our rates. As with the example you included; we want to ensure that we have the other guy covered. If our experience and situation allow, then 2% annually would not be a bad investment toward security. However, as your example states; the insurance companies limit what they will pay on (often down to not worth their fees), and getting them to pay has always been a problem. The last five years have really made that clear to us! I hope that they are there for all who trust them. I have trusted them in the past, but we are having a harder and harder time doing so the more exposure we have to them. They often have lobbiest in Washington D.C. working to enact new laws that benefit them but seldom benefit us. Not the kind of folks I want to place any more trust with than I have to.

No, they aren't telling us what we can do... Just what we can't do if we want coverage! Though I agree with war zones and named weather happenings. Where most of my problem really exists is the lack of a timely response or a compassionate payment time. As you said earlier; Luckily you had the funds to help those your boat damaged, and then you fought for your reimbursment. That is the type of thing that has turned me off to them. In fareness, there are people who try to take advantage of the insurance industry, but that should not be so often reflected in how they treat those who have paid for their coverage!

Thanks again for the corrective insight, it has helped somewhat.

David
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Old 02-18-2009, 05:49 PM   #8
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JeanneP--the language "prohibiting" and "limiting coverage" amounts to the same thing for many people. For example, some insurers write in coverage dates--not to limit coverage due to a named storm---to EXCLUDE all coverage in certain geographic areas during those dates. So, for example, with many insurers, if you want to have even the basic liability insurance on your boat, you won't be cruising down the coast of Baja in, say, September, because you wouldn't be covered at all south of Ensenada until the hurricane season is over and done with. I've heard the same types of "exclusion dates" apply in other areas.

While it typically is the crew experience that enables one to get insurance or not in the first place, the requirements on crew size during passages are not always focused on the experience of the boat's owners, even though that has something to do with it. I can think of 5 different couples who own boats ranging from 51' to 82' in length that require additional crew when passage making. In all cases BOTH husband and wife are very experienced sailors. Two of those couples have both husband and wife with 100T Masters Licenses w/sailing endorsement--they could captain a tall ship if desired-and have done so in the past. Its not always the person, sometimes its the boat--its size, its value, etc. Only one of those boats was under 50T (the 51' one is 22T).

When we were looking at boats that fit our various needs and desires, we found several in the 65' range that would have been great--less up front cost than the more desirable boats we were finding in the 50-55' range, those boats over 60 feet have so much more room and deck space, oh, they seemed to be the dream--except they were 50T or greater displacement boats and, among other drawbacks of that extra tonnage, they would have almost with certainty required additional crew while on passage with or without insurance.

The insurance issue is very touchy. Regarding liability, if a person's boat is small enough (usually under 45' sometimes the limit is 30 or 35' and sometimes an engine size limit) an umbrella liability policy can sometimes actually cover you. Our Firemans' Fund policy would have--except our boat is 54' length on deck so its "too big" to cover under that umbrella. It did cover our 30' boat but we also carried a full marine policy on that boat, too.

I have a very heavy suspicion that the typical blue water hull policy has many, many exceptions in it and that is why I'm rather reluctant to purchase such insurance. On the other hand, as we're talking about insurance--I can't stress enough that I agree 100% that one should have sufficient liability insurance (or money) to cover damage that one might do to another boat or property of another person!

Fair winds.
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Old 02-21-2009, 08:48 PM   #9
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I have a very heavy suspicion that the typical blue water hull policy has many, many exceptions in it ..

A very good point. Have just received one quote which didn't look too bad but it was very short on details. Can anyone suggest what things we should be looking for in the policy - traps etc and questions we should be asking? Don't want to find out that a claim has been turned down because I was wearing odd coloured socks at the time
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Old 02-21-2009, 09:14 PM   #10
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In 2004 I was in Grenada for Hurricane Ivan. Out of 600+ boats that were insured and damaged - almost evenly spit between 3 different "blue water" type insurance companies - about 200 never got any money for their damages as one of the three companies just decided to close it doors after the hurricane.

So be sure to check carefully whether the insurance carrier you choose has the depth and record of actually paying off for damages. One of my friends had paid premiums for 6 years and after the loss never got a dime from the insurance company. Caveat Emptor as they say.
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Old 02-22-2009, 10:05 PM   #11
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My boat is based in Greece and the standard insurance I carry covers all of the Med. When I sailed 10 years ago in the Black Sea I was able to get supplemental insurance for that trip. But, when I crossed the Atlantic in 2005 I was unable to get any coverage. It appeared that a crew of 2 was not sufficient. So we ended crossing with out being insured. Maybe US companies are more liberal.
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Old 02-23-2009, 07:22 PM   #12
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My boat is based in Greece and the standard insurance I carry covers all of the Med. When I sailed 10 years ago in the Black Sea I was able to get supplemental insurance for that trip. But, when I crossed the Atlantic in 2005 I was unable to get any coverage. It appeared that a crew of 2 was not sufficient. So we ended crossing with out being insured. Maybe US companies are more liberal.
No, they're not more liberal. I think they're all "contracting" and offering less and less insurance for more and more money
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Old 06-03-2010, 11:13 AM   #13
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Greetings fellow travellers

Work work workie work work - been months since we've had Mico out - hopefully an overnighter this weekend.

We ended up paying around $1100 (AUS) Blue Water Insurance for our trip out to Vanuatu and New Cal and return. This was additional to our Coastal Insurance.

Was it worth it?

No idea although Noumea Marina insisted on seeing our Blue Water Insurance before they agreed to give us a berth.

The Blue Water Insurance was for an agreed value and as such, we did have a mountain of forms to fill out - right down to our inside leg measurements and our views on 11th Century Ming Dynasty Toppary trends for the home gardener. But in saying that - it did give us some peace of mind.

Blue Water Insurance was strongly debated amongst our rally fleet and the consensus seemed to come down to the value of the vessel and whether or not your entire finances were tied up in it. i.e - as distressing as it might be, if we did loose Mico, it wouldn't kill us as we have property and regular incomes. For others who had sold their house to live afloat or had heavily mortgaged the house or business to buy the vessel - it was essential.

We ended up purchasing Blue Water Insurance as $1100 did not seem too extreme for 10 months coverage - especially for first time Blue Water sailors such as ourselves. In a couple of months we head north to the Louisiades off the eastern end of Papua New Guinea for 6 weeks of cruising - will we take out Insurance again? Probably.

I do take the point though about not wanting to fill your vessel with every man and his dog just to satisfy an insurance premium that is weighted in favour of 3 - 4 crew or more - We sail to get away from the maddening crowd - not to take them with us!

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Old 06-03-2010, 08:52 PM   #14
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It depends on the insurer and what your risk exposure rate is. First off, remember insurance firms are bookies. They work the odds on risk to make profit. Second you have the right to modify a contract in many countries as a counter offer, they often don't like it but you can always see what you can come to agreement with. Thirdly, if the contract is written only by them, than in many states and a good many countries you are the one who has right to interpretation of the contract terms and meanings not them. My Dad work in the upper levels of the insurance reinsurance industry before he retired. That and held a license in Michigan to sell for a bit and actually studied what my responsibilities as an agent where.

It comes down to weighing the risk versus benefit and what you can afford to right off to what you can't. We will most likely carry third party and than we will see what the contracts read for anything else.

Michael
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