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Discussion Starter · #1 ·
First off, I'm a marine insurance guy, and this post is about education.

I do presentations for yacht clubs and other organizations about insurance, and EVERY boat owner needs to read and understand their policy- before you need it. Hopefully this will be made a sticky topic.

I just had a call from the Vice Commodore of an Idaho anglers association about a situation he's going thru. He owns a newer aluminum pilothouse boat- 200hp outboard, full electronics, downriggers, etc- $70k worth of boat, engine, trailer, and accessories. It was afloat in Lake CdA, and being used for winter fishing.

On Superbowl Sunday, the boat was resting comfortably in its slip. The next day, the boat was on the bottom.

Cause of loss: a thru-hull had failed from repeated freezing and warming, allowing water into the boat.

Claim-DENIED. He was covered by a boat policy from his normal insurance guy; that policy had a specific exclusion clause for Idaho regarding freezing claims. So, he's had to pay out of pocket for salvage, transport to a boatyard, storage, and teardown of the engine...and there's more to come. He thought he was covered.

Note I said he had a boat policy- not a yacht policy. In short, he probably would have been fully covered under a yacht policy, as most yacht policies don't have that exclusion regarding freezing. Further, the yacht policy would have covered the salvage, transport, pollution spill, storage, and repairs.

Yacht= coverage type, not boat size. My personal 24' Trophy is on a yacht policy.
Yacht= agreed valuation payout in the event of a total loss, without depreciation or deductible.
Boat= depreciated payout in the event of a total loss (similar to your auto insurance policy).

READ YOUR POLICY. Ask your agent if your policy is a boat or yacht policy. Ask about how your policy pays you in the event of a total loss and partial loss. Ask about your navigation limits. Ask him/her if the boat is covered if you let a friend borrow the boat.

Most personal lines insurers (State Farm, Allstate, Foremost, Safeco, Pemco, etc) offer boat policies.

I don't represent the guy that had the loss- but his situation is a good example of what can happen. Insurance needs to be there when you need it- and this guy (so far) feels he has gotten screwed.

The season is coming up fast- I really don't want to read about any of us that have a loss, and get the short end of the stick.

I'd be happy to put together a presentation for anyone that is interested, or at a gathering of the gamefishin.com clan.

Dr. Hook, please let me know if this out of line. Thanks!
 

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Re: Is your boat properly insured? Check NOW!

Thank you and very good points. I have a 30' Searay under a yacht policy with Pemco. I'm going to re-read the exclusions again.

Question...Are insurance companies that offer boat insurance required to use the yacht policy on boats over 27' LOA? Or is it still an otion? If I remember correctly, with Pemco, it was required. Along with having the yacht policy, there were "extra" vessel requirements in order to get fully insured too. But, in the end, it's worth it.
 

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Discussion Starter · #3 ·
Re: Is your boat properly insured? Check NOW!

Requirements as the where "boat" ends and "yacht" begins are company set; the general line of demarcation is in the 26-28' range. Unfortunately, too many people look at the premium amount only, instead of looking at the coverage. Too often, client will want to pay a couple of hundred less in premium to leave several thousand $$ of coverage on the table.

The gent with the sunken boat will probably end up better than $10k in out of pocket expenses. When he called yesterday, we quoted him @ roughly $680/year; his current premium is $600.

I know the Pemco policy (I have all my other coverages with them). It's a boat policy:
- structural failure, electrical or mechanical breakdown, and overheating are specifically excluded.
- your personal effects coverage maxes out at $250.
- total loss payment wording- "Our payment won't exceed the smallest of the following:
Actual Cash Value (means depreciated) of total loss of watercraft we insure".
- No Jones Act coverage (coverage for those you hire to work on your boat).
and so on.
 

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Re: Is your boat properly insured? Check NOW!

Thanks for the food for thought. I hate paying for insurance but absolutly love having it when I need it. I will have to read through my policy also, even for my little alumaweld.
 

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Discussion Starter · #5 ·
Re: Is your boat properly insured? Check NOW!

General rule of thumb- if the vessel is a garage boat (under 14' or so) AND is valued at a couple of thousand or so, then a boat policy is fine, as there's not a lot of valuation.

Outside of those parameters, and/or if you have a lien on the boat- then a yacht policy is the way to go.
 

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Discussion Starter · #7 ·
Every boat owner NEEDS to get the latest SEA magazine, March 2008- page 62 goes over the differences between boat and yacht policies.

Hope y'all are taking the time to take his info to heart.
 

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Discussion Starter · #8 ·
I received an email today from a gent that has just acquired another boat, and currently has nav limits to Tatoosh. Please contact me via pm or phone 206-273-6996. Thanks!
 

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Try buying insurance for a 27 year old boat. The insurance companies don't have any idea about them..... They use their trusty book of BS to tell you what its worth. If you feel that their number doesn't come close they make you get it appraised at your cost. Usually the cost is almost equal to a years worth of coverage. Boat insurance is a must have in my opinion... I just wish the people who sell this insurance understood that not everybody has brand new or a couple years old and that their one size fits all approach may work for todays cookie cutter boats but not for us who have classics that are in better than new condition. Obviously, I have a bit of a jaded view about insurance salesmen right now because of how I was treated by GMAC, Farmers and especially the jerks that I dealt with at Progressive. Just my two cents worth. The White Possum
 

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Discussion Starter · #10 ·
White Possum said:
Try buying insurance for a 27 year old boat. The insurance companies don't have any idea about them..... They use their trusty book of BS to tell you what its worth. If you feel that their number doesn't come close they make you get it appraised at your cost. Usually the cost is almost equal to a years worth of coverage. Boat insurance is a must have in my opinion... I just wish the people who sell this insurance understood that not everybody has brand new or a couple years old and that their one size fits all approach may work for todays cookie cutter boats but not for us who have classics that are in better than new condition. Obviously, I have a bit of a jaded view about insurance salesmen right now because of how I was treated by GMAC, Farmers and especially the jerks that I dealt with at Progressive. Just my two cents worth. The White Possum
You make good points- let me throw out a few ideas for you to chew on.....

If you vessel is over 26' long, you'll want to get it surveyed for a number of reasons; establish valuation; having a survey helps to eliminate any questions about how much your vessel is worth in the current market, and will also document equipment, upgrades, as well as material condition.

The companies you mention in your post are unfamiliar with older vessels, and have to refer to a valuation guide in order to figure out if they can even insure it.

PM me or call me - maybe I can steer you in the right direction.
Pete
206-273-6996
 

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Thanks for the advise... Don't mean to sound so harsh... I could use help narrowing my search a bit. Any suggestions of who to contact would be great. The White Possum
 

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Discussion Starter · #12 ·
White Possum said:
Thanks for the advise... Don't mean to sound so harsh... I could use help narrowing my search a bit. Any suggestions of who to contact would be great. The White Possum
Lots of ideas- call me Wednesday at the office if you get a chance.
 

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my state farm agent (new kid on the phone) didnt know what you were talking about

i am suppose to get a call-back from my actual agent regarding the yacht question :)
 

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Discussion Starter · #14 ·
bing said:
my state farm agent (new kid on the phone) didnt know what you were talking about

i am suppose to get a call-back from my actual agent regarding the yacht question :)
ask the hard questions, to make sure you're getting the right coverage, and not just a quick answer...
 
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