What do you need to know about insurance if you live on a boat at a dock or while cruising? Plenty. After all, your home depends on your smart choices.
We hope to answer your questions here on The Boat Galley with a series of articles by insurance professional, Laura Lindstrom-Croop, on what every liveaboard needs to know about insurance. (And if you’re buying your own boat in the United States, see my checklist of the important things to remember, including insurance.)
Insurance In Uncertain Times
Insurance. It is a subject that most people don’t like dealing with, but unfortunately, it is one we should deal with if we want to avoid uncovered claims.
Due to the storms of 2017, there is a great deal of turmoil in the marketplace. You may be wondering which carrier to use, what type of coverage is best, or how to get the best coverage for your dollar.
Shopping for boat insurance is difficult in the best of times. In today’s marketplace, the options are few. With existing carriers reducing coverages, increasing premiums and/or excluding hurricane coverage at renewal, now is the time to pay special attention to your insurance. So, how to shop for coverage?
What Type Of Policy
First step: Decide what type of policy you need. There are two main types of policies a boat owner can purchase. First is a boat owners policy, intended for small craft, sometimes on trailers, under 30 feet. Or a yacht policy, which is for the larger type vessels that people typically live aboard.
A boat owner can buy a policy in conjunction with a homeowners policy, thru standard carriers who write homeowners and auto coverage. Most of these policies are written on Actual Cash Value which takes depreciation at the time of the loss. This could be acceptable for someone who has a brand new weekend sailor but definitely not for a couple who wants to sail the Caribbean for a couple of years on a boat that may be older.
Yacht policies are more comprehensive in their coverages and can be customized for dinghy coverage, personal effects, pollution liability, etc. For the purposes of these articles, we will be talking about yacht policies. They’re the most effective insurance if you live on your boat.
Build An Insurance File
Second Step: Put together a boat insurance file. It should include:
- your current policy
- a copy of your last survey
- a resume of the owner’s boating experience, and
- and a list of recent upgrades that you made to your boat.
Think of it as a marketing tool for getting the best rate available from the underwriters. Submit these documents, along with any application that you fill out, to the underwriter. They will appreciate it.
Getting A Quote
Don’t be surprised if an agent will ask you to fill out “their” application. This, unfortunately, is how most companies create quotes for new business.
However, don’t just fill out a random email application. Have a conversation about what type of cruiser you are, where do you plan on cruising, etc.
Any agent can ask you to fill out a form and provide a quote. You want an agent who asks you questions and is interested in your boat and your cruising plans. If you get a good feel, ask them what carriers they market to and make a note so you know which markets this agent will approach.
Also, remember your hull value should be a total of your hull, electronics, and engine. Frequently carriers use the market value listed on your most recent survey. Ask for the amount that you would be happy with in the event of a total loss.
Don’t forget about the dinghy. Is it covered? Some carriers include it in the hull coverage, others have a separate limit and deductible. Make sure you understand what is covered and what is not.
Working With An Agent
Regarding agents, there are some that only represent one company while others represent several. If they only represent one company you may want to contact another agency so that your boat is being quoted by all the markets for your area.
Talk to several agents before you decide who to let market your policy. Normally the first agent to apply to a company gets the quote. The market (company) is then “blocked”. That means another agent cannot get the same quote, they can only get quotes from different companies.
So take some time to determine which agents you would like to work with and what markets and companies they represent. This will allow you to get the best range of quotes and also save the agents time when dealing with underwriters.
If you decide to work with a different agent than the one that got the original quote, you will just be asked to sign an agent of record letter. This lets the company know which agent you want to work with.
By getting quotes from several companies you should be able to feel comfortable knowing that you have shopped the market and feel good about your decision. In some cases, one agent can get you several quotes and will do a comparison for you to help make the decision a little easier.
Insurance For Living On a Boat – What’s Next
I hope this begins to help weed through the difficulties associated with finding an agent and understanding your coverage. In our next article, we will discuss the fine print. This includes the terms and conditions and how they affect your insurance coverage when you live on a boat.
Laura Lindstrom-Croop has worked as a Claims Adjuster and as an Insurance Agent for over 35 years. She brings a unique perspective to the insurance business as a liveaboard cruising sailor with an Atlantic crossing and over 20,000 miles under her keel over the last 12 years. Her current cruising grounds are from New England to Trinidad. Laura currently works for Legacy Underwriters in St. Petersburg, FL, an independent broker that specializes in marine coverages. If you have questions you’d like Laura to address in future posts, leave a comment below or email her at firstname.lastname@example.org.Learn more.