Yacht Insurance renewal up 20%!!
- Thread starter Rich Stidger
- Start date
For what it's worth...
...that's not how it is supposed to work. Premiums increase because loss ratios increase and loss probabilities go up. The only "recovery" of paid dollars would be in the case when reserves were depleted to the extent they need to be restored over time. I doubt that's the case here. Rather I suspect they underestimated the loss potential. Paid dollars are gone dollars but most people outside the industry (and lots inside) make the logical connection between big claims and dollar recovery. But, that is not how it works. Also, when an insurance company goes toes up, payments are assumed by a state guarantee fund (at least in all the states I know of), not the government. All insurers licensed to do business in the state are required to participate in a pool to make good claims against the insolvent insurer.
Not quite sure why I chose to offer an insurance lesson here; if your rates went up 20%, you're not going to feel the least bit better! I just took my homeowners insurance deductible WAY up since my policy has doubled in five years. Wildfires took their toll.
Edit to add: Re-insurers insure insurance companies by the way. They share in losses after after a certain loss amount depending on the treaty.
...that's not how it is supposed to work. Premiums increase because loss ratios increase and loss probabilities go up. The only "recovery" of paid dollars would be in the case when reserves were depleted to the extent they need to be restored over time. I doubt that's the case here. Rather I suspect they underestimated the loss potential. Paid dollars are gone dollars but most people outside the industry (and lots inside) make the logical connection between big claims and dollar recovery. But, that is not how it works. Also, when an insurance company goes toes up, payments are assumed by a state guarantee fund (at least in all the states I know of), not the government. All insurers licensed to do business in the state are required to participate in a pool to make good claims against the insolvent insurer.
Not quite sure why I chose to offer an insurance lesson here; if your rates went up 20%, you're not going to feel the least bit better! I just took my homeowners insurance deductible WAY up since my policy has doubled in five years. Wildfires took their toll.
Edit to add: Re-insurers insure insurance companies by the way. They share in losses after after a certain loss amount depending on the treaty.
Marina owners are like boaters, some are cheapskates. You can get less expensive marina insurance premiums if you require your slip holders to provide additional insured endorsements. My owner does not. He also runs off the derelict owners - which is another manner of "self insurance".
Thanks to all who posted responses to my question.
I just had a conversation with my insurance agent. The company that I am insured with is ACE Recreational Marine Insurance. This coming year will be my third year with them.
According to my agent, the 20% increase has nothing to do with industry losses or "recovery" of payout dollars. Rather he told me that the increase is due to the age of my sailboat. It is a 1997 model and I had a C&V survey done in 2006 (10 year mark). The C&V survey is Condition and Valuation for the benefit of the insurance company. It is different from a survey that would done by a potential buyer of a boat. At that time my insurance company (not ACE) required me to obtain the survey. It was my understanding that these type of surveys are generally required every ten years.
Well according to my agent, when boats become older, at some point the insurance company will require an out-of-water C&V survey to satisfy themselves that the coverage that they are providing is justified by the condition of the vessel. This is not just at ten years, but could be every five years thereafter. In lieu of a current survey the companies tend to increase the premium to offset the "unknown". My agent told me that all the companies play this game. He said that I could not switch to another insurance company now without submitting a current survey due to the 17 year old age of my sailboat. So basically I just need to "suck it up" and pay the higher rate until I am asked to provide a current survey or I do so voluntarily.
I think I will call ACE and ask them what their policy is regarding the need for a C&V survey, and how such a survey could impact my yearly premium. However right now there is no rush to make this inquiry and I have many more pressing issues to deal with in getting my boat ready for this sailing season.
BTW, I have a friend who is an assistant VP at Factory Mutual. FM is a company that provides risk assessment to the insurance industry and arranges re-insurance. Two years ago when I switched to ACE I asked him about ACE. He told me that they are one of the strongest insurance companies and were highly recommended.
I just had a conversation with my insurance agent. The company that I am insured with is ACE Recreational Marine Insurance. This coming year will be my third year with them.
According to my agent, the 20% increase has nothing to do with industry losses or "recovery" of payout dollars. Rather he told me that the increase is due to the age of my sailboat. It is a 1997 model and I had a C&V survey done in 2006 (10 year mark). The C&V survey is Condition and Valuation for the benefit of the insurance company. It is different from a survey that would done by a potential buyer of a boat. At that time my insurance company (not ACE) required me to obtain the survey. It was my understanding that these type of surveys are generally required every ten years.
Well according to my agent, when boats become older, at some point the insurance company will require an out-of-water C&V survey to satisfy themselves that the coverage that they are providing is justified by the condition of the vessel. This is not just at ten years, but could be every five years thereafter. In lieu of a current survey the companies tend to increase the premium to offset the "unknown". My agent told me that all the companies play this game. He said that I could not switch to another insurance company now without submitting a current survey due to the 17 year old age of my sailboat. So basically I just need to "suck it up" and pay the higher rate until I am asked to provide a current survey or I do so voluntarily.
I think I will call ACE and ask them what their policy is regarding the need for a C&V survey, and how such a survey could impact my yearly premium. However right now there is no rush to make this inquiry and I have many more pressing issues to deal with in getting my boat ready for this sailing season.
BTW, I have a friend who is an assistant VP at Factory Mutual. FM is a company that provides risk assessment to the insurance industry and arranges re-insurance. Two years ago when I switched to ACE I asked him about ACE. He told me that they are one of the strongest insurance companies and were highly recommended.
boat insurance
Im paying the same $200 per year for the last 15 years I have never had a claim 2 years ago I had my boat reconditioned. I increased my policies declared value by several thousand dollars. No premium increase. I am with kemper insurance. I do have additional policies with them
Im paying the same $200 per year for the last 15 years I have never had a claim 2 years ago I had my boat reconditioned. I increased my policies declared value by several thousand dollars. No premium increase. I am with kemper insurance. I do have additional policies with them
Rich...
A few years ago, the insurance company providing coverage for my former yacht club jumped its liability insurance requirement for owners of all boats utilizing the club's marina docks from $300K to $500K, and naming the club as an additional insured. It gave no reason for the increase. Boat US required a resurvey to make the change.
A few years ago, the insurance company providing coverage for my former yacht club jumped its liability insurance requirement for owners of all boats utilizing the club's marina docks from $300K to $500K, and naming the club as an additional insured. It gave no reason for the increase. Boat US required a resurvey to make the change.
If I may suggest...the older the vessel the greater the likely hood of improper or insufficient maintenance which leads to a total loss and/or personal injury. Also, older boats with new owners generally have lower maintenance budgets. Look at the local liveaboards; the are maintained les well as compared to the same aged boat that races.
This is not meant to be personal, just a point on the math.
Jeff
This is not meant to be personal, just a point on the math.
Jeff
Good Question Woodster!
After Hurricane Katrina, the marina in which I docked my boat was a wreck. Probably half of the boats were sunk or damaged beyond repair. Most of the remaining boats had significant damage. The floating docks were either destroyed completely or suffered major damage. My boat was partially sunk and had major hull damage. The insurance company totaled the boat and I received the agreed upon insurance settlement after transferring ownership to the insurance company. The marina contracted with a salvage company to remove the boats & damaged docks. I had no contact with the marina, only the insurance company. I don't have any idea of what funds were paid by the insurance to the salvage company nor if any funds were paid to the marina. At the time, there was no provision in the policy to include the marina as "additionally insured." With my current slip lease, the marina mandates that they be "additionally insured" on my policy. When I notified the insurance company, they issued the "additionally insured" provision without any additional cost to me. I would guess that it doesn't really matter to the insurance company as they have a fixed liability amount stated in the policy that limits their liability. I would think that with another major event, I would collect the pre agreed upon hull/boat value. The marina would collect on the liability provision of the policy for salavage costs, fuel spill, damage to docks, etc.
After Hurricane Katrina, the marina in which I docked my boat was a wreck. Probably half of the boats were sunk or damaged beyond repair. Most of the remaining boats had significant damage. The floating docks were either destroyed completely or suffered major damage. My boat was partially sunk and had major hull damage. The insurance company totaled the boat and I received the agreed upon insurance settlement after transferring ownership to the insurance company. The marina contracted with a salvage company to remove the boats & damaged docks. I had no contact with the marina, only the insurance company. I don't have any idea of what funds were paid by the insurance to the salvage company nor if any funds were paid to the marina. At the time, there was no provision in the policy to include the marina as "additionally insured." With my current slip lease, the marina mandates that they be "additionally insured" on my policy. When I notified the insurance company, they issued the "additionally insured" provision without any additional cost to me. I would guess that it doesn't really matter to the insurance company as they have a fixed liability amount stated in the policy that limits their liability. I would think that with another major event, I would collect the pre agreed upon hull/boat value. The marina would collect on the liability provision of the policy for salavage costs, fuel spill, damage to docks, etc.
i am pricing that with boats us to see if it would be cheaper to have it with them or with my main policy also tow ins with boats us and not the primary carrier ...as you can tell i am shopping this stuff to death not because i am cheap just very limited income monthly if it winds up being only a few dollars diff i will combine it all in one but until i am satisfied with it i will shop it to death ...i have never enjoyed doing this but i don't have a cornucopia bank account so thats the way it is for now and i damn sure don't want to have to take what is left over in the event i get damage coverage for my boat ...at this time i am considering not having anything but liability but i have heard that some marinas require full coverage but i am still puzzled by that...... as my loss is my loss not theirs...if i have salvage and spill that should be enough for them...some where in all this i am the boat owner not them ...and i hate having things shoved up my bohunkus or down my throat ...and on a side note my spell checker just corrected me on my spelling of bohonkus ...totally amazing
Yes, from the marina's perspective, it would seem that all they would be concerned about is liability insurance for spill, salvage, damage to docks or other boats.
My policy expires in couple of months, will be interesting to see what the cost will be. Will start shopping around in a few weeks. Just to see what's available.
Oh, FYI, on the home owner's insurance settlement, I did have to endorse the claim check and forward it to the mortgage company. The mortgage company issued me an initial check to get started with repairs and issued additional funds as the work progressed. That really aggrevated me; however, I would imagine that many owners would cash the check and walk away from the damaged home, causing a major problems for the mortgage companies!
My policy expires in couple of months, will be interesting to see what the cost will be. Will start shopping around in a few weeks. Just to see what's available.
Oh, FYI, on the home owner's insurance settlement, I did have to endorse the claim check and forward it to the mortgage company. The mortgage company issued me an initial check to get started with repairs and issued additional funds as the work progressed. That really aggrevated me; however, I would imagine that many owners would cash the check and walk away from the damaged home, causing a major problems for the mortgage companies!
I have been reading all this with interest. I have BoatUS for boat and trailer road coverage, at sea tow. What comes to mind is that I saw no mention of your personal effects ins. coverage for your personal items on the boat. My home ins. policy covers up to 10% of my total coverage for personal items aboard my boat , RV, and vehicles. The point to this is your boat or auto ins. likely will not cover this stuff as well as your home policy may. Chief
i understand what you are saying but you have to know that when i go full time there will be no homeowners coverage...i am getting rid of everything that i can't store in a 5x5 storage closet or in a jeep cherokee ...i will be virtually homeless
Yes Woody, but others may benefit by claiming against their homeowners insurance policy. There is a renters ins. policy that covers personal stuff and cheap to cover your boat personal stuff. Chief
Insurance and such.
Rick D gives an excellent lesson on the basics of insurance. I am in the business (agency owner). Yes, most everyone hates the insurance companies, until you need them. It's really important that you understand your policy, what's covered, what's not, and how a claim is going to be paid. Don't assume anything.
Regarding increases, your boat may be getting older, but the cost of everything related to fixing it is going up. I would also consider higher deductibles. $2k-$5k isn't uncommon. This eliminates the small, frequent claims, which raise expense ratios.
Rick D gives an excellent lesson on the basics of insurance. I am in the business (agency owner). Yes, most everyone hates the insurance companies, until you need them. It's really important that you understand your policy, what's covered, what's not, and how a claim is going to be paid. Don't assume anything.
Regarding increases, your boat may be getting older, but the cost of everything related to fixing it is going up. I would also consider higher deductibles. $2k-$5k isn't uncommon. This eliminates the small, frequent claims, which raise expense ratios.
Wow! I love this one! Insurance rep. would suggest raise your deductible so you will do less claims for you to save money! I have a BS in business and I am amazed at how insurance co. rob us. Raising your deductible only means that the ins. co. makes even more money! So, what are we missing here? Chief
CHIEF.
I'm not defending the industry, just offering suggestions. Like everything else, this industry is changing too. And I'm assuming that you, like me, do not like change. The great thing about all this is we all have a choice and can shop around for a Carrier that fits our budget and needs. Or we can self-insure.
I'm not defending the industry, just offering suggestions. Like everything else, this industry is changing too. And I'm assuming that you, like me, do not like change. The great thing about all this is we all have a choice and can shop around for a Carrier that fits our budget and needs. Or we can self-insure.