There is also a lot of inertia. How many insureds will shop each year? How many will change companies? I haven't shopped for home, auto, or boat insurance for over 20 years. As long as I'm happy with the service and find the premiums affordable, why change? The cost of changing may exceed the value of the change. Progressive comes into the market with low rates, gets a bunch of new customers and then begins to raise rates to better reflect the risk. They know the churn rate, they have some historical data on claims. They are not issuing these low rates out of the goodness of their hearts.
Survey before insurance will renew?
- Thread starter Justin_NSA
- Start date
I haven't found Progressive to have particularly low rates - more or less on par with what I've been quoted elsewhere. The difference is that they are making it easier to obtain insurance. Their online process is better than most and their requirements are very minimal.
I sincerely doubt they are operating their recreational boat insurance at a loss just to increase market share. But, I am betting that they are calculating that people will eventually insure their auto and home with the company that made it easy to insure their boat. And, I am betting that they have calculated that people with boats, in general, make for lucrative customers across various insurance products.
Geico's recent policy shift represents an opportunity for Progressive. It has incentivized many customers to start looking at other insurance companies, and that has implications well beyond boat insurance. As you say, people tend not to change insurance companies unless they have some pretty good motivation to do so. So, I believe Geico has been short-sighted by providing just such a motivation.
My understanding is that Progressive has been the biggest boat insurer for several years: at least that’s what they advertised. Not sure the metrics they are using to make that statement. I just switched to Progressive last week. Dropping coverage with company that I have dealt with for twelve claim free years. Their Premiums were always on high side and now they have instituted restrictions such as boat can’t be in Fl from June to December. Progressive has 75 nm coastal limit with seasonal allowance for Bahamas. $850 less per year. Members On this site are pleased with coverage and claims, mostly. Going to give them a try.
Is this true? With an automobile, the conditions of the car with regard to safety (good brakes and tires and lights) is relevant to safety, and is managed by regular safety inspections.
Propane explosions are a liability issue, but so are fuel spills from sinking at the dock, and fires that can burn up a row of boats. Or perhaps there is an engine/trans problem while docking. Most liability claims are within the confines of the harbor, where there are other boats to damamge.
No, the value does not matter that much, which is why an insurance survey should be cheaper.
I think it is appropriate, if an insurer has empirical data that shows a demonstrable risk that could be identified and mitigated by a surveyor's inspection, then requiring such an inspection could be reasonable. You mentioned propane. There are well-documented cases of damage due to faulty equipment or improper installation. These are things a surveyor could check for and identify. If the insurer is concerned about that, they should request its inspection.
But, mostly these survey requirements are blind fishing expeditions ... seemingly just to get a vague heuristic sense of the condition of the boat, rather than addressing specific risks that can be clearly identified and mitigated. That supposes that an agent that has never seen the boat can accurately assess the risk of the boat by reading someone else's impression of the overall condition.
While that information is useful for assessing the value of the boat, it does very little to quantify the exact financial risk the insurer would be taking for a liability-only policy. Not saying the survey is worthless, just saying that it is a crude instrument, at best.
So far as liability claims go, I sincerely doubt there is a strong corelation between requiring periodic surveys and reduced risk to the insurer. Do we think Progressive is going to be buried in claims simply because they do not require these surveys? They apparently don't think so.
With all this said, I am not an insurance expert. I could be wrong. I would be be very curious though, to know if any insurance company can show that the requirement actually results in better profits. My hunch is that they lose more business than they save in the odd liability claim that could have been prevented by a survey. In fact, I would be curious to learn that any insurance company has even clearly identified those items that could be inspected which would quantifiably lower their risk in a liability claim.
I disagree. The reality of the market is that you can’t get liability coverage without hull coverage. I tried asking several agents who specialize in marine coverage, who all said it doesn’t exist.
I've decided to drop BoatUS/GEICO and go with my home and auto insurer USAA/Progressive.
One last thought about all this; if an insurer wants marine business they should be able to provide someone local that can do the survey. Even if the client is required to pay for it like we do home appraisals. I heard another story this past weekend from a member that was told a surveyor would come, but the boat owner would have to pay travel, food and lodging!
One last thought about all this; if an insurer wants marine business they should be able to provide someone local that can do the survey. Even if the client is required to pay for it like we do home appraisals. I heard another story this past weekend from a member that was told a surveyor would come, but the boat owner would have to pay travel, food and lodging!
This is pretty common with high end boats. Steve D'Anotonio makes a nice living doing this. Of course he is surveying $1M+ boats, so a few thousand isn't much money compared to the cost of the boat. Most surveyors have an area they will cover without travel charges. The last survey I had done, the surveyor would travel about an hour from his home base. Beyond that, expect to pay travel expenses.
I have never been able to get liability only insurance, without a survey. The insurance company views it as though the boat is a workplace and they need to be satisfied that the vessel is sound without excessive liability risk. That only makes sense to me.
Don't get me wrong, I'm not a fan of insurance companies. I have seen owner insured production boats (I'm not going to name them), because of the build quality, work well. I've always thought that an owner's insurance system for cruisers would work well.
Don't get me wrong, I'm not a fan of insurance companies. I have seen owner insured production boats (I'm not going to name them), because of the build quality, work well. I've always thought that an owner's insurance system for cruisers would work well.
It might be less commonly available, but when I shopped around (last year), I had no problem getting multiple quotes for liability-only insurance. In fact, I don't recall being told by anyone that they wouldn't do it. (But, admittedly, I would have forgotten about them, by now.) At least 3-4 of the half-dozen or so companies I contacted gave me liability-only quotes.
Perhaps there are regional differences?
Yes it is true. All liability insurance is based on the person or entity being insured. All property insurance is based on the property itself (house, boat, car). The rates for each are separate.
Liability covers you if you are sued for damage due to your negligence. For example, you ram your boat into another by accident and cause damage or even bodily injury. Liability is often referred to as BIPD (Bodily Injury Property Damage).
Property insurance covers the boat itself. It’s based on the current value of the boat.
So, what you're suggesting is that you would give liability insurance to some derelict anchored out, no survey needed? Or how about some rusty old steel boat?
As for sending pictures, many boats for sale use old pics of the boat which don't show the boat's present condition.
Anyway, I never ran into any boat insurance company in the Americas, Caribbean, or the Med that would sell me liability insurance without a boat policy as well. But that is just my experience, perhaps others have had better luck.
Well, liability ... sure ... with limitations on environmental damage (fuel/oil leaks, etc.), and maybe an exclusion of damaged caused by propane system. (Of course, no marina would accept such a policy, but my point is that, from a liability perspective, there aren't many systems I would really care about.
Refer to where I said that I agree that it is appropriate for an insurer to want to address specific liabilities. Honestly, aside from the environmental risks (which are not negligible), there isn't much about the condition of a boat that has much impact on how likely it is to do damage. Sure, you could argue that steering could go out or a deck cleat could fail or a mast could come crashing down - but show me the actuarial data that supports the idea that these things happen with greater frequency causing more damage on uninspected vs inspected boats. Seems like they might, but I am skeptical. Derelict boats also pretty much stay put. So, it is probably a statistical wash.
There are some areas that do warrant inspection, like I mentioned - things like through-hulls, propane, etc. These things are known to cause costly failures that could be avoided with simple inspection. Totally appropriate for an issuer of a liability policy to want these things inspected.
My point is that insurers should know what problems they are concerned about that can be mitigated by professional inspection, and require inspection of those items. If they do not know what the actual risks are (i.e. they do not know specifically which failures are likely and what those failures are likely to cost the insurer) then they should not issue liability policies at all since they don't have a good way of assessing and mitigating their risks.
The liability coverage I was seeking was for injuries to anyone aboard. Guests aboard while sailing. Marinas and boat yards required it to protect their employees while working aboard.
Perhaps they assumed a well maintained boat was less likely to be a danger to those going aboard. I would.
The reasons I could think of for a liability claim (excluding guests like Capta’s situations) would be basically what you listed - failure of steering or propulsion leading to collision, rig collapse on neighbors, sinking, or propane or gas explosion. I’d also add the relatively notable risk of electrical fire spreading to nearby boats. Given the number of systems that need to be checked to avoid those things I don’t see any way to effectively go through the list without a survey. I agree with you that I don’t know if the frequency of those things happening is reduced by a survey. Maybe it is and maybe it’s not; I just don’t know the data, but my guess is there’s at least a non-zero correlation. Assuming there’s any correlation at all, and even if there isn’t, it doesn’t cost the insurance companies anything to require a survey, so from a business perspective there’s little reason for them not to require it. They may figure that the owners who aren’t willing to get a survey are owners they don’t want to insure anyway, as a survey will at least motivate the owners to keep things in order.
Hello, I would like to share my GEICO/BoatUS renewal story. We got the non-renewal notice in March unless you got a Marine Valuation Survey completed by the renewal date. This really torqued me off. 15 years with them, no claims. The boat is a 1984 Hunter 31 based on the Chesapeake. I got the survey done this past Monday and used Curt Sarratt of Sarratt Marine Surveys out of Annapolis.
We spent 3.5 hours going over the boat, he was courteous, professional, knowledgeable; and most importantly he not only point out recommendations but actually give me advice on how to make the repairs and make the boat more single handed friendly. He even went over to West Marine with me to pick out the correct blocks to address an issue with the traveler rigging. What a ending positive note given the foul mood I was in having to spend my money to satisfy the insurer's demands. I had only 5 recommended items and no "must fix" items. Because of the boat's condition it's valuation is the same as what I paid for it 15 years ago ($18K). I have taken very good care of my boat over the years (new standing rigging, PSS drip less shaft seal, new cutlass bearing and shaft, etc). I budget $1K a year for maintenance items and it has worked out well.
Now on to BoatUS/GEICO, ever since GEICO got involved the customer service has deteriorated, the exclusions they have added (can't winterize your own boat and get frost/ice coverage), and the survey requirement have decidedly turn me off to staying with them except for one point: We have our umbrella insurance policy with GEICO and they won't allow you to have an umbrella policy unless all coverages are underwritten by them (car, house, boat, etc). The hassle of having to quote and move everything to another carrier was the only reason I put myself through this survey process.
On the other hand, the BoatUS towing package gives me a peace of mind and what they do for government affairs and boating advocacy is commendable, I just wish that Warren Buffett's GEICO was not their insurance partner.
They upped my agreed to hull value to match the survey valuation and I'll have the marina required $500K liability policy and agreed hull value of $18K for $351 for the upcoming renewal period. Oh and by the way, I called BoatUS/GEICO after I got the Letter of Compliance notification and asked them how often they are going to require a survey; the rep put me on hold and asked both her supervisor and Underwriting, the answer is they don't know. There is no fixed time period established at this point. I suspect if the claim/loss numbers tick up, another survey will be forthcoming so as to weed out the less desirable boats.
I fully understand risk, I held a certificate in Risk Management as a requirement for my old employer (now retired fully, more time for the boat!!). I can walk the docks at my marina and some of those boats are seriously "unloved" and neglected. A survey is financial lever that insurance companies can pull to adjust the risk picture more into their favor.
Regarding Progressive, a few weeks ago I went online and got a quote as a backup plan to GEICO if the survey came back with crazy recommendations (yes I would have to forego the umbrella policy) they came back at $319 without a survey. I am fully in the camp that they are doing this to grab market share and at some point the realization will hit them that they have a risky portfolio of vessel that they are going to have to "cull the herd" to get rid of the submarine-to-be boats.
Thanks for reading my admittedly long post but it was therapeutic for me to share this. Now that the process is over with I can go back to enjoying my boat and not worrying about the what the survey results were going to be.
Take care, fair winds and following seas to everyone.
Bob
We spent 3.5 hours going over the boat, he was courteous, professional, knowledgeable; and most importantly he not only point out recommendations but actually give me advice on how to make the repairs and make the boat more single handed friendly. He even went over to West Marine with me to pick out the correct blocks to address an issue with the traveler rigging. What a ending positive note given the foul mood I was in having to spend my money to satisfy the insurer's demands. I had only 5 recommended items and no "must fix" items. Because of the boat's condition it's valuation is the same as what I paid for it 15 years ago ($18K). I have taken very good care of my boat over the years (new standing rigging, PSS drip less shaft seal, new cutlass bearing and shaft, etc). I budget $1K a year for maintenance items and it has worked out well.
Now on to BoatUS/GEICO, ever since GEICO got involved the customer service has deteriorated, the exclusions they have added (can't winterize your own boat and get frost/ice coverage), and the survey requirement have decidedly turn me off to staying with them except for one point: We have our umbrella insurance policy with GEICO and they won't allow you to have an umbrella policy unless all coverages are underwritten by them (car, house, boat, etc). The hassle of having to quote and move everything to another carrier was the only reason I put myself through this survey process.
On the other hand, the BoatUS towing package gives me a peace of mind and what they do for government affairs and boating advocacy is commendable, I just wish that Warren Buffett's GEICO was not their insurance partner.
They upped my agreed to hull value to match the survey valuation and I'll have the marina required $500K liability policy and agreed hull value of $18K for $351 for the upcoming renewal period. Oh and by the way, I called BoatUS/GEICO after I got the Letter of Compliance notification and asked them how often they are going to require a survey; the rep put me on hold and asked both her supervisor and Underwriting, the answer is they don't know. There is no fixed time period established at this point. I suspect if the claim/loss numbers tick up, another survey will be forthcoming so as to weed out the less desirable boats.
I fully understand risk, I held a certificate in Risk Management as a requirement for my old employer (now retired fully, more time for the boat!!). I can walk the docks at my marina and some of those boats are seriously "unloved" and neglected. A survey is financial lever that insurance companies can pull to adjust the risk picture more into their favor.
Regarding Progressive, a few weeks ago I went online and got a quote as a backup plan to GEICO if the survey came back with crazy recommendations (yes I would have to forego the umbrella policy) they came back at $319 without a survey. I am fully in the camp that they are doing this to grab market share and at some point the realization will hit them that they have a risky portfolio of vessel that they are going to have to "cull the herd" to get rid of the submarine-to-be boats.
Thanks for reading my admittedly long post but it was therapeutic for me to share this. Now that the process is over with I can go back to enjoying my boat and not worrying about the what the survey results were going to be.
Take care, fair winds and following seas to everyone.
Bob
I think Progressive likely isn't going to have a realization, later, that they have taken on too much risk. I'm betting they pretty much know exactly what they are doing. Whether they decide to raise rates or add requirements in the future - I don't know. I dropped my crystal ball in the water and it wasn't insured. But, I don't believe the idea that they are naive about the risk.
But, it doesn't matter, to me. For now, Progressive seems to be the best company to work with, in this regard. If this changes in the future, so will I.
But, it doesn't matter, to me. For now, Progressive seems to be the best company to work with, in this regard. If this changes in the future, so will I.