Time for New Insurance

Jun 21, 2004
2,532
Beneteau 343 Slidell, LA
Update on my insurance dilemma. Yesterday, I inquired about insurance thru a broker that previously handled West Marine Boater's insurance, years ago. I actually had my first boat insured thru that firm. I received this reply this morning. He had submitted my info to multiple carriers and "none wanted to offer a quote as they have all tightened their restrictions on the maximum age of sailboats we're allowed to write for the Gulf Coast these days". At 15 years, I wouldn't consider that to be an old boat. Used to be that insurance was available on the Gulf; however, you were going to pay an increased premium, that is understandable because of the greater risk. Now its getting to the point that you cant get insurance at any cost. Boats US gave me a quote; however, the agreed value was only about 55% of the value of the boat. Appears that I may have to back off on my position and haulout / survey to be reinsured. No claims reported in 16 years.:(
 
Jan 23, 2021
114
beneteau 323 Corpus Christi marina
BE, did you or insurance agent check with American Modern? I got new insurance with them recently for new-to-me 2004 boat. I’m also on/near the gulf.
 

dLj

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Mar 23, 2017
3,373
Belliure 41 Sailing back to the Chesapeake
I ended up getting insurance for my new boat through Hagerty - they insure antique and collectable cars and have a marine division that does boats.

dj
 
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Jun 21, 2004
2,532
Beneteau 343 Slidell, LA
BE, did you or insurance agent check with American Modern?
That’s the company that I am presently insured with. They are dropping my plan. Have been insured with them for 9 years.
 
Mar 20, 2011
623
Hunter 31_83-87 New Orleans
BE. check with State Farm. Went with them after problems with Progressive. They have boat only and not bundled. I can give you the name of my rep in Covington if you want.
 
May 17, 2004
5,032
Beneteau Oceanis 37 Havre de Grace
they have all tightened their restrictions on the maximum age of sailboats we're allowed to write for the Gulf Coast these days
I wonder what kind of actuarial math goes into a decision like that. The fact that the exclusion applies to the Gulf Coast suggests it’s a storm issue. But What makes an old boat any higher risk on the Gulf Coast than a new boat? They’re both just as subject to a named storm.
 
Jan 11, 2014
11,323
Sabre 362 113 Fair Haven, NY
I wonder what kind of actuarial math goes into a decision like that. The fact that the exclusion applies to the Gulf Coast suggests it’s a storm issue. But What makes an old boat any higher risk on the Gulf Coast than a new boat? They’re both just as subject to a named storm.
I'm not in the insurance business, so take this for what it is worth.

The risk is not in the value of the boat, it is in the cost to recover or remove a boat. The cost to move a brand new boat that is washed up on someone's backyard is the same as it is to remove a 20 year old boat of the same size. In the many discussions on line about insurance rates, it seems the rule of thumb is rates are about 1 to 2% of the AGV, and that fits my experience. The premiums for an older boat are less than a newer boat and the first cost the insurer has is recovery which is the same for both boats regardless of the damage to the boats.

Additionally, $20K damage to a $30K boat may well total the boat, which will cost the insurer $30K. The same $20K damage to a $100K boat will not result in a total constructive loss and will only cost the insurer the $20K.

Does that make sense?
 
Jan 23, 2021
114
beneteau 323 Corpus Christi marina
Yes, both points are passable reasons for insurance companies’ reluctance to cover older boats.
 
May 17, 2004
5,032
Beneteau Oceanis 37 Havre de Grace
I'm not in the insurance business, so take this for what it is worth.

The risk is not in the value of the boat, it is in the cost to recover or remove a boat. The cost to move a brand new boat that is washed up on someone's backyard is the same as it is to remove a 20 year old boat of the same size. In the many discussions on line about insurance rates, it seems the rule of thumb is rates are about 1 to 2% of the AGV, and that fits my experience. The premiums for an older boat are less than a newer boat and the first cost the insurer has is recovery which is the same for both boats regardless of the damage to the boats.

Additionally, $20K damage to a $30K boat may well total the boat, which will cost the insurer $30K. The same $20K damage to a $100K boat will not result in a total constructive loss and will only cost the insurer the $20K.

Does that make sense?
Yeah, the first point about recovering and removing the boat definitely makes sense. I hadn’t considered other fixed costs either, like fuel spill cleanup, that would be harder to cover with smaller premiums.

I think they could probably make up for the loss differences in your second point by just charging somewhat higher premiums, especially if the supply market is so limited. But I do see how it might be hard for them to charge enough on an old boat to cover all those fixed costs.
 
Jun 21, 2004
2,532
Beneteau 343 Slidell, LA
Last year was a particularly active storm season, especially on the Gulf. I have seen this occur in the past where insurance companies opt out of covering boats or increase premiums substantially. After a few years, they are usually back in the game and premiums settle down.
Kind of a knee jerk reaction to their above normal losses. Same applies to homeowner's insurance in hurricane prone areas.
 
Feb 14, 2014
7,400
Hunter 430 Waveland, MS
Kind of a knee jerk reaction to their above normal losses.
So far Progressive is paying my claim on time, and renewed my policy without a "knee jerk" increase.
Perhaps they know what boat they have insured, in detail, after restoration?
Jim...
 
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Jan 19, 2010
12,362
Hobie 16 & Rhodes 22 Skeeter Charleston
Does that make sense?
Makes sense to me... I'd add to your analysis liability. If an old boat smashes into a million dollar yacth, it will do no less dammage than if a new boat smashes into a million dollar yacth. But it also seems that the insurance company can separate the different parts of a policy and charge accordingly regardless of the age of the boat. So... if your analysis is correct, then they are just leaving money on the table.
 
Jun 21, 2004
2,532
Beneteau 343 Slidell, LA
So far Progressive is paying my claim on time, and renewed my policy without a "knee jerk" increase.
Perhaps they know what boat they have insured, in detail, after restoration?
Jim...
Jim,
Over the past two years, I have almost quit my present insurer and convert to Progressive.
Inertia prevented me from doing so. Most individuals, including you, seem to be satisfied with Progressive; therefore, I will likely contract with them if I can get a satisfactory Agreed Value policy. May take a survey to get a good valuation.
With regards to Progressive not increasing the cost of your policy. Progressive claims in their ads that they insure over one million boats.
(all types & sizes). I would imagine that their risk pool is such that one or two hurricanes in a season doesn't impact their bottom line to the extent of smaller companies that insurer larger boats that are in water year round.
 
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