Boat insurance?

[Guest]

How much can I expect to pay for insurance for a 24ft+ boat? Just looking for a rough idea. Totally forgot about insurance while budgeting for a boat :/

[1paulg 17]

Depends on the value of the boat and where it is kept.....

[Guest]

And you'll get a discount for things like dayskipper/boatmasters....

[Guest]

We have two advertisers who would be happy to have a casual chat, Baileys to the left and Mariner to the right.

[Guest]

Costs me about $450 per year for $35k on an Elliott 7.4 and trailer including racing cover.

 

There is a number to start with for your budget - dropping the insured value to your budget probably wont make a huge difference i.e. a 10k boat probably wont be $150 p.a.

 

EE

[Marshy 30]

About $400 a year for full insurance on an SR26 keelboat on a marina insured for $25k including racing cover which is expensive.

[Guest]

$480 per year for a R930 kept in a marina (knot that they ever asked) at $65K. $40K for the boat, $5K for the porn collection and $20K for the wine/rum cellar. Don't laugh, we do have a dedicated cellar.

 

Includes full racing cover but if we cock up doing that the excess goes to $2000 from $250 if just cruising.

[Farrari 4]

To give you a comparison it costs $110 p.a. for my daughters Starling. Was $90 p.a. for the Optimist. Both had race cover but in my experience all this has done is put the excess up.

 

I felt almost guilty only paying these amounts given the regularity and size of the claims. Almost none where her fault.

 

From memory it was just over $400 p.a. for my 25ft MKII Gazelle ($15K), no race insurance and kept at home (for a while in any case until I got sick of carting it around and putting the mast up/down). It is far easier and more enjoyable to leave it at the yacht club with it's mast up. Nothing like the impatience of a family while setting the boat up to put everyone off for the trip.

[Murky 1]

$480 per year for a R930 kept in a marina (knot that they ever asked) at $65K. $40K for the boat, $5K for the porn collection and $20K for the wine/rum cellar. Don't laugh, we do have a dedicated cellar.

 

Includes full racing cover but if we cock up doing that the excess goes to $2000 from $250 if just cruising.

That's a farking good price KM, suspect your volume discount might be helping a bit there.

[Guest]

I spend many many K a year on insurance/s. All thru the same broker dude. Yes it sure helps when it comes to the boat/s as does having minimal claim history maybe??

 

The 65K figure is well above the buy price but as that was so low a good fart gone bad could cause enuff damage to eclipse that sum so we (in conjunction with the insurance dudes) came to a figure that was would be regarded as reasonable if we assumed the rig fell over trashing itself completely while tearing all the sails and did a average amount of damage to the hull/deck at the same time. So that number was got to assuming that was the most likely scenario we would expect to see happen. Also includes some towing, salvage and so on costs that would be associated with a cock-up like that.

 

We all didn't want to have a cock-up like described above and only have enuff coin to cover a half arsed patch up job. The amount is also a set sum and isn't adjusted for wear tear age and the bolloxs like that they can do. My broker boats, knows boats well and knows I tend to keep things in pretty good shape, so was happy I wouldn't be claiming for a new set of 3DL's after losing a set of 1972 canvas numbers. Yes he's made the odd comments about the paintwork also, approx 3437 times

 

If she goes down totally so be it. We all decided that was knot a likely scenario, where the above is quite likely or at least the most likely worst event foreseeable.

 

So it's worth thinking 'Just what is the worst case I'd reasonably expect to happen to my boat?' and allow for that. A total loss usually isn't it.

 

Maybe it's an opportune time for Arron (Mariner) and Baileys drop a para or 2 on just what they see and the problems of picking a wrong number can be. As we are seeing in Chch many have found themselves well out when talking insurance.

 

And you'll note I use the word 'reasonable' a lot. No point insuring a 930 for 500K and then trying to lose it out the back of Waiheke. The Insurance dudes aren't stupid and know more about dodgy than any of us will ever do. Be reasonable to them and they will return the favour. Try to feck them over and they will return that as well.

 

Edit - By 'know more about dodgy' in the para above I mean experience dealing with dodgy claims rather than them being dodgy themselves, even if the odd one ......... Thought I better add that clarification in case Arron tried to beat me up for attempted slander

[Guest]

Nothing If its a Trimaran

[Guest]

Edit - By 'know more about dodgy' in the para above I mean experience dealing with dodgy claims rather than them being dodgy themselves, even if the odd one ......... Thought I better add that clarification in case Arron tried to beat me up for attempted slander

 

Ha ha, I knew what you were getting at.

 

In our experience, if we are straight with people they appreciate it even if the message is not what they want to hear. We try to meet expectations and where something is is outside the scope of the policy we will clearly say so, but invite further comments or sometimes get an independent view. Often these relate to mechanical breakdowns /damage in older boat's engines that really is a result of poor maintenence by previous owners.

 

As to total losses, As a specialist insurer we would query you if you wanted to insure your R930 for megabucks KM, we have a pretty good idea of the values of boats and use our own judgement as well as use valuations supplied by owners to establish the Sum Insured.

 

We have lost business by having this stance. But if you do it for one guy (or gal !), you have to do it for the next one. Its hard to know who presents a Moral risk and who does nt so we err on the side of caution.

 

A few years ago in Dec we were asked to insure a launch in for 250 K more than the guy paid for it. We said we would only do so with a valuation. That was not forthcoming. The boat sank in January. Not necessarily dodgy, but not a good look.

[smithy09 50]

Hi Aaron.

 

I need a quote as well. I'll contact you via the website. Cheers, Smithy.

[Guest]

Its hard to know who presents a Moral risk and who does nt so we err on the side of caution.

 

 

 

That's it - I'm screwed!

[Guest]

As to total losses, As a specialist insurer we would query you if you wanted to insure your R930 for megabucks KM, we have a pretty good idea of the values of boats and use our own judgement as well as use valuations supplied by owners to establish the Sum Insured.

 

While I have you. In my speil above I mention how we, meaning 'the owner' and 'The insurer', got togeather and worked out the most likely worst case scenario I'd expect to reasonable encounter and got the the 65K cover sum. We all thought total loss was unlikely so why pay premiums on full replacement, approx 150K (we all guessed), or pay on the purchase price which was less than 1/2 that and highly unlikely to get any sort of similar replacement (left a little open on purpose there in case Murky is bored )

 

Arron, do you think that was a good way to look at it all and along with that do you think more should look at it like that?

If you think it was a total cock-up please say so, I won't cry for long nor in public nor try to beat you up

 

Just seem to me with all the costs people have today and the struggle many have with Insurance cost (amongst a raft of other things) that covering your boat for total loss when that is highly likely never to happen. Just thinking if people thought a bit more like I/we did maybe they could cover the most likely bad events rather than having no cover what so ever.

 

I know many with no insurance as they can't afford to cover the boats '$BIG' value when they could have some that would cover a more likely to happen event.

 

Take 88's for example, they don't sink and I can't remember one even been sunk for any reason so total loss is unlikely but could one get cover for the most likely event they would see, which is most likely to be a full on T-bone on the race track or so it often appears Same applies with S34's and any Multis by a S34 I think I'll stop here and go hide now :)

 

What are your thoughts on that? Actually is it possible or easy for the punter and your industry to do that?

 

As my boat insurance cost is a tiny fraction of my total bill maybe I got something a little special not usually available to all. I don't really know but it is possible I suppose.

 

A few years ago in Dec we were asked to insure a launch in for 250 K more than the guy paid for it. We said we would only do so with a valuation. That was not forthcoming. The boat sank in January. Not necessarily dodgy, but not a good look.

Bugger off, that looks totally dodgy

[Fogg 427]

KM

 

The reason it doesn't really work to try sit down and work out the scenarios for losses less than a total loss is that you may still end up under-insured because in the rare scenario that you do experience a total loss you will be buggered.

 

Also, the principle of under-insurance will work against you even for smaller losses. Here's an extreme example to make the point:

 

Boat has value $100k

Owner asks to insure it for only $50k on basis that total loss is unlikely

Result = he does not pay enough premium to adequately contribute to the insurance 'pool' to fund the poor bugger who DOES experience a total loss (it might be him or his best mate or another member of this forum etc).

 

So, this is actually unfair. So if insurers come across such a blatant example of under-insurance (that has somehow slipped past during the sales process) then they might seek to apply a pro-rata reduction at claims time e.g. if you lose your rig and claim for $40k they might say "Well, you have only been paying 50% of the correct premium compared to what the true risk is worth, so your claim for $40k will also be reduced by 50%."

 

So the answer is to put forward the full value of the vessel (and all it's contents and bits and pieces) and the underwriters will apply an appropriate rate - this figure is based on a blended rate of probabilities which ranges from the small probabability of a large claim/total loss to the higher probability of a smaller claim. It's a complex actuarial modelling process which looks at real life claims experience over many years and also predicts the likely future trends e.g. costs of material rising etc. It's non-trivial.

 

If you try to achieve this 'science' yourself by cleverly offering up a reduced sum insured then you bugger up this model - which is why your borker/adviser will advise against it - they also understand this.

[Guest]

Interesting AC. Using me as an example again then.

 

What should I have done, covered her for 'replacement', around the 150K mark, or 'purchase' price, say 30K round figures. Feel free to give your honest opinion even if it's knot the company one or the company one if you like, I'm a big boy and can take it

 

The 150 I would have thought would raise eyebrows within the insurance industry and cost me a lot more than history has clearly shown is likely never to happen.

The 30 wouldn't cover a new rig/sails/repair combo for an event history has shown that while unlikely (these days) is still quite possible.

Either way I lose. Yes I know I have an element of self-cover currently should a total cock-up happen but I am well aware of that and can live with it.

 

I think I sort of understand what you're saying but surely if I or anyone takes out $XXX worth of cover, with the understanding of why by the insurance dudes, they would tweak cost to suit, adjust the 'pool' to suit on the theory that if, using me as an example again, I slam my beast into a rock or maybe a multi they know that while I may have just lost the lot they still won't. I can't see why I should pay more just to cover some twat who can't navigate, that seems just bizarre and almost very Helen Clarke :)

 

I thought the idea of insurance was to cover a risk a 'owner' didn't want to himself. So if I see only a max of 65K risk why cover for more and equally why cover for less?

 

You mention 'full value'. What do you mean there, the full value of the replacement or the full purchase value?

 

All this is brought on by seeing so many with no insurance or way under insured due to costs of it mainly. Yes I know there are many arguments for and against but I was just thinking that if people could cover for the most likely foreseen event maybe they could get some cover. I'd be assuming large here but would I be far wrong in thinking most boats are covered for the purchase price? In which case if any of those experience total lose, 95% of NZ boats are way under insured so what's so different to my example or have I got something wrong somewhere.

 

As a FYI - my thing was done with the insurance dudes full knowledge after some discussion as to the number. It's a very big very well known name who will get to pay out if something ever happens, which we all hope it doesn't. The policy came up for renewal just before Xmas and after pondering, mainly over increases in repair materials, it was left as is. There was a small increase in the cost, thinking around 9-10% odd.

 

Note - I used to think Insurance was just a bunch of rip off artists doing well but had a incident a few years back totally losing a boat (commercial) in which I learned a lot. Now while I do struggle with the seemingly high cost in some areas I spend more on insurance/s than ever before and don't cry for anywhere as long after writing the cheque each year.

[Guest Rocket]

Another way of looking at ACs point is as follows:

 

 

Lets say we have a fleet of MRXs - we know a total loss will cost say $150k but market value is only $80k. Now we don't expect to lose the lot in one incident so why don't we just insure the fleet for $300k on the basis that we are unlikely to lose more than 2 in an incident.

 

Clearly we wouldn't be contributing adequately to the pool on that basis. The insurer will insist all are insured for an appropriate amount.

[Fogg 427]

Lots of Qs, KM, so I'll try to summarise.

 

In short, regardless of what you want to call it, the value you should insure anything for is the amount that you would need to spend to replace that item at normal market costs i.e. available to the everyday punter. It gets more complicated if you have a one-off unique item that has to be custom-built but again you are looking at what would I need to pay to replace that item in the condition and age that it was in when I lost it.

 

If you want to make a conscious decision to self-insure for part of the cost but have the insurance company in the background to pick up the larger costs then yes, you can do that, by increasing your excess. This will bring the premium down, as you'd expect. That's the way you do it, not by artificially bringing down the sum insured.

 

As an aside (and not saying that this is our motive at all!), many cases of fradulent claims involve either significantly under or over insured items. The reason behind the over-insured scenario is obvious. The under-insured scenario is sometimes when someone wants to raise some cash, can't sell the item for what they bought it for and can't afford the full premium e.g. asking to insure a $10,000 diamond ring for only $5,000. Then when it 'gets lost' the claimant can still pick up $5k, having only forked out a smaller amount on the premium. Most cases of under or over insurance comes from innocent lack of awareness rather than fradulent motives but it is sometime one of several giveaways that combine to identify a bad 'un.

 

Does that answer things?

[Guest]

Lots of Qs, KM, so I'll try to summarise.

Yeah sorry, it's just an interesting thing if that doesn't sound to sad I have a nasty obsession on having to find out how things work. It's a bit of a bastard sometimes.

 

In short, regardless of what you want to call it, the value you should insure anything for is the amount that you would need to spend to replace that item at normal market costs i.e. available to the everyday punter.

That's what I/we did, sussed what the likely cost was if I rocked up to a sparmaker, a sailmaker and a boatbuilder/fixer and said 'Me total rig's gone splash, replace it (like for like, knot carbon and 3DL's). I just choose knot to insure the hull I suppose you'd say.

 

As an aside (and not saying that this is our motive at all!),

This I know just as I know I'm no where near smart enough to try and diddle outfits who have had far superior diddlers try long before me.

 

It's a tricky thing to get your head just how it all works around unless you're in the industry. Which I think does cause confusion for many of us who aren't.

 

The 'Pool' bit has me a bit buggered. Sure the more in the pool the better but surely if the sum insured is XX the premiums are set to reflect a possible XX whack on that pool, should it come to that and allowing for the 'likelihood' of a $XX incident/claim ever being made. I can't get my head around why I or anyone should have to cover (pay) more than is necessary just so when some twat fecks up there is enough in the pool to pay them out. Why do I have to pay to cover Twats cock-up, surely the industry would be charging Twat enuff to cover his own cock-up.

 

Surely if someone under insures, which I believe is common 99.9% totally by more accident than design, it's their problem no one elses. The insurance industry isn't going to pay out more than the policy allows for and one would have thought they allowed for when setting the rules and premiums.

 

And you will note I'm leaving all dodgy goings on out, which I do know the industry does have a lot of or is prone to getting. I'm just talking about Joe 99% honest Public. The 1% allowance is for the little dodgy in us all, it is there

 

Actually this is all caused by bloody multis I started thinking about the ins and outs after Grouparama went tits up and suddenly Tim, Scottie, Samin and the local lads had insurance issues, with 'the pool' comment coming up a bit.

 

Oh hang on a mo..... I'm having a moment and it maybe heading towards a 'Oh I get it' one. Stand by... I need coffee, nicotine and a think.