# Cruising vs. Passages



## GLausin (Sep 2, 2019)

I've been reading different posts on SailNet and think I see a pattern...most of the cruising life is not about crossing the 7 seas or a global navigation, though there are some who do, but rather short hops between islands or ports. The "big hops" seem to be a necessity to move to a different part of the world so that you can do more short hops between islands or ports.

My question to the forum is how often do you do passages to get to different cruising grounds? And what influences your decision to do a passage? Did the length and type of sailboat you purchased affect that decision? Was the length and type of sailboat you purchased based on the idea that at some point you will do passages or not?

_For clarity I am defining passages as ocean crossings and cruising as remaining within a day or two of some land._

:2 boat:


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## Yorksailor (Oct 11, 2009)

We bought a 55 ft blue-water boat so that we could cross oceans. We usually stayed in a location for months until the insurance policy said we had to move to avoid hurricanes. 

An example was 6 months in French Polynesia and then a 2,700 nm trip to New Zealand to avoid cyclones and then a year in NZ. 

40,000nm in 11 years


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## GLausin (Sep 2, 2019)

Yorksailor said:


> We bought a 55 ft blue-water boat so that we could cross oceans. We usually stayed in a location for months until the insurance policy said we had to move to avoid hurricanes.
> 
> An example was 6 months in French Polynesia and then a 2,700 nm trip to New Zealand to avoid cyclones and then a year in NZ.
> 
> 40,000nm in 11 years


Impressive!!! So insurance was your driving influence. Interesting.


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## colemj (Jul 10, 2003)

We haven't crossed an ocean yet, but do regularly take 4-8 day passages to get to where we want to spend more time. Some of these are more than a day or two from land (and land isn't necessarily safety for many areas). So I don't know if that is considered cruising or passaging by your definition.

What motivates us to move is varied - insurance requirements, weather, boredom, carefully made plans.

We do the bigger 4-8 day jumps every 2-3 years, and smaller 2-4 day jumps a couple of times each year.

We planned our boat for this type of cruising, as well as ocean crossing in the future.

Mark


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## MikeOReilly (Apr 12, 2010)

Guess I don’t really qualify to speak here, but I will anyway and the OP can ignore. I’ve yet to cross an ocean, and our “passages” have been mostly close to land, although there have been a couple where land is more than a day away. I don’t see the proximity to land as being much of tipping point really.

In any case, to me a passage is just that — a distance one travels to get somewhere. Some live for the passage, some for the destination. I suspect most cruisers are somewhere in the middle, or rather embrace both as part of the whole.

Our pattern is to travel large distances every few years (many hundreds to a few thousands). Then we stay in that area and explore the physical and human geography. We’ve done this four times so far, and each time we stay about four years. 

In fact we just completed a “passage” where we sailed around the northern peninsula of Newfoundland so as to relocate from the west side to the east side. This was probably our shortest “passage” (~600 nm), but possibly our hardest one from a sailing/anchoring perspective.


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## Arcb (Aug 13, 2016)

I have never heard this definition of passages. I have always understood passages to mean any voyage where the primary purpose was traveling between two distinct locations while a tansoceanic passage was exactly that, a transoceanic passage. 

Any way, yes I bought my boat with passage making in mind. I like cruising in different areas, but get bored on multi day passages. So I bought a trailer sailer, which allows me to cover big distances on the highway, train or ship (yet todo this, but would like to visit UK, for example one day, by shipping my boat).

So basically, my boat was selected, specifically to avoid the necessity of long passages.

In my former career as a navigator, my working life was pretty much continuos passage making, whoch is how I know it isn't really my thing. Its a big wet desert out there.

I don't think I am alone either, because even many cruisers who claim to love passage making insist on the importance of having the biggest fastest boat possible so they can get the experience over with as quickly and in the most possible comfort and isolation from the sea as they can manage.


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## GLausin (Sep 2, 2019)

Arcb said:


> I have never heard this definition of passages. I have always understood passages to mean any voyage where the primary purpose was traveling between two distinct locations while a tansoceanic passage was exactly that, a transoceanic passage.
> 
> I don't think I am alone either, because even many cruisers who claim to love passage making insist on the importance of having the biggest fastest boat possible so they can get the experience over with as quickly and in the most possible comfort and isolation from the sea as they can manage.


Perhaps "passage" wasn't the correct word to use in this circumstance, but you got exactly what I was meaning by it.


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## GLausin (Sep 2, 2019)

MikeOReilly said:


> In any case, to me a passage is just that - a distance one travels to get somewhere. Some live for the passage, some for the destination. I suspect most cruisers are somewhere in the middle, or rather embrace both as part of the whole.
> 
> Our pattern is to travel large distances every few years (many hundreds to a few thousands). Then we stay in that area and explore the physical and human geography. We've done this four times so far, and each time we stay about four years.


Mike, I believe you are fully qualified to answer my original question, and I appreciate your input. I guess it's all a matter of perspective. My personal definition of a "passage" at this point in my sailing career is to take my little Catalina 22 to the far end of the lake and camping out for the weekend. Not exactly pushing the limits of cruising, but I do try and unplug from the dock life by hitting my nav marks, making my meals, filtering water, and utilizing my solar system (Read baby-steps).


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## capta (Jun 27, 2011)

It was my dream to circumnavigate ever since I read Slocum's book @ around 12, but I knew I was going to be a seafarer in one form or another since I was about 6.
I bought my first big boat (49') @ 22 and set off to cross oceans. But it was the wrong boat. A TransPac racer did not a cruising boat make, especially when one had to stow 22 bags of racing sails *and* have a bunk to sleep in. So we traded her for a 65' gaffer, slowed down and got comfortable at sea.
What I enjoyed the most about the long ocean crossings was the safety and security I felt at sea. We had everything we needed and were usually a tight knit crew, all with the same motivation, within a few days. Rarely did we reach the end of a crossing and we didn't feel like continuing on instead of stopping. This went on for 30 some odd years, doing deliveries and operating vessels for owners across oceans, but it became more and more tiring as I grew older, though GPS, roller furling and other advances made it all so much easier. 
These days I'm perfectly happy to sit on the pick at night and get a complete night's rest. Skipping Stone can usually do around 80 miles in daylight, so there are few runs in the eastern Caribbean we can't manage in daylight. We do overnights now and then (to Trinidad and back mostly), and really enjoy them, but I really do not desire to do another ocean crossing. Not today, anyway.


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## SanderO (Jul 12, 2007)

Good topic!

Obviously you're get a range of responses. Here's mine.

Because of work etc... cruising ie time on the boat is "time limited"... mostly weekends... extended weekends/holidays and vacations. How far you can get depends on the usual factors including getting back to your car/life on dirt. You can move the boat quite a distance in hops... but for me the problem was ground transportation back to my car.

So find a homeport with a lot of great places reachable in a weekend or extended weekend. Maine for me was 400 miles... a vacation length trip. Did it multiple times but not enough.

I decided to take a sabbatical from my profession so the time was no longer a problem. I used the opportunity to sail south from NY/LIS to the Caribbean... live aboard full time and cruise from "locally" from island to Island. I was fortunate to meet a GF who kept a lovely Swedish built 36' boat in the Canaies. Flew off to cruise there. I dodged hurricanes by sailing back to LIS and cruising locally then back down to the Caribe. I've down a few deliveries which were ocean passages.

I am now quite familiar with all the LI harbors and many in southern NE... Not as much "discovery" fun... but we have our favorites for different reasons.


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## MikeOReilly (Apr 12, 2010)

GLausin said:


> Mike, I believe you are fully qualified to answer my original question, and I appreciate your input. I guess it's all a matter of perspective. My personal definition of a "passage" at this point in my sailing career is to take my little Catalina 22 to the far end of the lake and camping out for the weekend. Not exactly pushing the limits of cruising, but I do try and unplug from the dock life by hitting my nav marks, making my meals, filtering water, and utilizing my solar system (Read baby-steps).


Sounds like a good way to start &#8230; or to spend a lifetime. Who knows .

I stumbled into sailing and cruising mostly by accident. I'd never sailed much as a kid, outside of the occasional sail I would hoist on my canoe trips. I began remote wilderness canoe tripping when I was quite young, and then discovered sea kayaking in my late late 30s. A few years after that a friend bought a O'day 22, and the rest as they say, is history.

I spent a lot of great time sailing that little 22. At the time I thought it was a huge boat. Then came a 26-footer, then a 34, and now my 37-footer. I think I've found my final boat, but one never really knows what the future will bring. I do know I can cruise just about anywhere with this boat. In fact, she's already gone around the world with a previous owner.

Personally, I have no plans to circumnavigate, but I don't rule it out. I don't really have any specific cruising plans or goals. To me, cruising is about the lifestyle, and I know I can find wonder and beauty just about everywhere, so I don't have to go anywhere in particular.


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## outbound (Dec 3, 2012)

Have been doing two passages per year. One from New England to eastern Caribbean and one back. Insurance predicates your behavior. Insurance now requires me to have three aboard for passage. Insurance in the “zone” is an obscene amount. Most insurance includes Grenada and some Trinidad as being in the “zone “. Insurance is hard to find as so many companies either folded or left this field. Last year for the first time left the boat in Grenada. It was actually cheaper than yard cost in New England. Next year don’t know what I’m going to do.

The Outbound is hands down the very best passage boat I’ve ever owned and the best mom and pop for long term cruising. Although a 14 year old design would build another one if starting out. Don’t think any of the current offerings match it for our sailing program.


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## outbound (Dec 3, 2012)

May sound snippy, so apologies now, but words do matter in order for you to get the best input. Many people accept the Ocean Cruising Club definition of a passage. Roughly speaking a passage is an uninterrupted transit across the ocean of 1500 nautical miles or greater with land in sight only at upon leaving or final landfall. Believe this definition is used as it implies weather forecasts are only reliable for the first 5 days after leaving. That you are entirely dependent on what preparations you’ve done before leaving. That you must complete the passage in the absence of a break in the passage so therefore without outside assistance beyond that received via communications. It’s that sense of total self reliance and independence that makes passagmaking so magical. As they say” a man who has gone to sea is ruined for land”.
Strongly encourage you to do it before you make any decisions about which boat to buy. If you get hooked you’re done. Your boat decisions become entirely different if you want to do passages. Some have this dream of passagemaking only to find out they hate it. Huge sums, incredible hours spent only to end up dissatisfied. Every passage is markly different. Some a great PIA and struggle. Others immensely satisfying. Do at least a few before deciding.


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## Arcb (Aug 13, 2016)

I suppose if you happen to be a member of that yacht club their definition might be authoritative, but for the rest of us I think the definition is much less prescriptive.

For example, the Royal Yachting Association, who many folks also recognise as an authority define a passage as "A passage is a non stop voyage from a departure port/safe haven to a destination port/safe haven". Note, no minimum distance is required. Any uninterupted berth to berth voyage is a passage.

Passage is also used in the collision regulations as well as numerous nautical texts without having any minimum distance attributed to it.


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## capta (Jun 27, 2011)

Arcb said:


> I suppose if you happen to be a member of that yacht club their definition might be authoritative, but for the rest of us I think the definition is much less prescriptive.
> 
> For example, the Royal Yachting Association, who many folks also recognise as an authority define a passage as "A passage is a non stop voyage from a departure port/safe haven to a destination port/safe haven". Note, no minimum distance is required. Any uninterupted berth to berth voyage is a passage.
> 
> Passage is also used in the collision regulations as well as numerous nautical texts without having any minimum distance attributed to it.


I'm afraid I'd have to agree with Arcb on this one. It may only be around 900 some odd miles from Bermuda to ST. T., but it sure feels like a passage, in the traditional sense, to me. The same with the trip to Bermuda from anywhere in the US, especially if the Gulfstream is treating you to a bit of it's more unpleasant conditions.
I don't think we can put an exact definition of the word passage in this context, unless we qualify the word with some sort of description such as ocean, coastal or overnight. 
How could anyone sail from Newport to the Caribbean and not consider that an ocean passage, whether you stop in Bermuda or not? It's roughly 14 days out of the sight of land, a situation where the crew must be self sufficient and hopefully competent and experienced enough not to require the aide of a rescue service.
I'm sorry, but the Ocean Cruising Club definition of a passage sounds like a bunch of stuck up old sailors who need to feel they have done something extra special by putting their own definition to the word passage.


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## paulinnanaimo (Dec 3, 2016)

capta

Why are you afraid to agree with Arcb?


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## MikeOReilly (Apr 12, 2010)

I think I'll go with Webster on this one: _"a specific act of traveling or passing especially by sea or air." _Clubs can impose their own definition as befits their members. Doesn't really matter to the rest of us.


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## Arcb (Aug 13, 2016)

I found a definition from a good source. Bowditch: The American Practical Navigator. Very likely the leading text on how to navigate in North America, probably one of the top navigation texts in the world.

1) A navigable channel, especially one through reefs or islands. Also called a PASS.

*2) A transit from one place to another, one leg of a voyage.*

https://en.m.wikisource.org/wiki/The_American_Practical_Navigator


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## mbianka (Sep 19, 2014)

GLausin said:


> My question to the forum is how often do you do passages to get to different cruising grounds? And what influences your decision to do a passage? Did the length and type of sailboat you purchased affect that decision? Was the length and type of sailboat you purchased based on the idea that at some point you will do passages or not?


My passages this season have all been three nautical miles between two harbors and that is enough for me these days. I've done many extended cruises in my younger days and just do not see the need to repeat those trips. My boat is a 30 foot catboat that is considered to be a good coastal cruiser. A number have crossed the Atlantic and others have participated in the Marion Bermuda race. Others have traveled to the Caribbean and back. I've taken the boat from Long Island to Canada. Where I sailed across Lake Ontario into the Thousand Islands area and back. Plus all over the northeast up to Boston, Nantucket, Newport etc... I did have plans to take the boat south in winters but, they have faded with age and the fact that my gal likes to do Catamaran charters in winter. There were some spots I still wanted to visit by boat and I have been able to do that by arranging a charter for myself. Long ocean passages no longer interest me. A sail to a nearby port that I can plan in the drop of a hat is most enjoyable and comfortable for me these days. I'll rent a mooring for a few days and dine ashore or cook on board as is my wish. I plan to get there before the crowds and enjoy the watching the couples as they pick up the moorings around me. It's fun to observe those who have the communication skills to pick up the moorings without a word being spoken and those who need to yell and make several attempts. When the tide and weather window is right I make plans to head back. Because the distances are not long I don't get fatigued or bored and enjoy the trip in each direction.


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## Don L (Aug 8, 2008)

"Passages" are what you do to get to the "cruising" area you want to be in. No matter how long the passage is, the boat of course was considered where purchasing. The real question is the level of fear that went into that choice consideration.


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## outbound (Dec 3, 2012)

Ok stand corrected. Understand my view is idiosyncratic. Sorry it was not taken the way I thought it would be and apologize. 
The OCC definition is to determine who can join. There are many peoples of all ages in that group. My understanding is very few are members of any traditional yacht club as there’s no benefit to being in one as you wander around. As with all groups like this the administration is dust farters but the membership seems to be a pretty active sailing group. 
Have done a bunch of Bermuda races. Also it’s a common bail out point if stuff goes wrong on the way to the Antilles. It feels very different to do that race knowing that pretty much what ever breaks or how you feel it will be over soon and you’ll be back on land. Hell, you could not eat for that entire trip and still be fine. 
What I wanted to point out (and still think in spite of the above posts ) is there’s a fundamental difference between a transit of 5 dayside less and a longer passage. There’s a fundamental difference between always being in sar helicopter distance and being on your own. I know my insurance broker thinks there is. Since I started sailing and at present you get a different policy, premium, crew requirements, boat requirements, vetting process on the owner and operators if you sail coastal or not. As long as you are within 250 nm of land they don’t use the word passage. They don’t care who’s on the boat. You don’t submit crew resumes . You pay coastal rates. Other than arguments about valuation they don’t care about getting surveys. Once you are outside that limit things change for them. They think you’re on passage and the risks are different. I think their thinking is bogus as I think coastal is more difficult and dangerous. 
But I still think passagemaking means crossing oceans. Will back down on how you what to define it but know it feels different. Maybe it’s the point were the routine of the boat becomes your natural routine and it’s no longer an interruption in the usual day to day because it’s the usual day to day.


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## SanderO (Jul 12, 2007)

I don't think it's meant as some min # of miles. For me an ocean passage is in a ocean or sea... and out of sight of land for the majority of time.... which should be numbered in days. NE- Bermuda is a passage. Camanche did it in 2 days +. I did it in 4.5 days +... Many boats can be fitted out of these sorts of passages. Some require a lot of refit... others less because they are built almost ready to go for that sort of sailing. This is not rocket science.



'


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## GLausin (Sep 2, 2019)

outbound said:


> As they say" a man who has gone to sea is ruined for land".


I love this saying, and I do believe it to be true. To me it is ALL about the journey rather than the destination. Having served 22 years on active duty, I have always savored the unknown. I live to challenge myself.

And your advise about crewing during a passage sounds like a great way to really know if I have what it takes.


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## GLausin (Sep 2, 2019)

This has been a fun posting, I have enjoyed reading about your journeys. I do find it a bit disturbing that regardless of what a sailor calls a passage, the technical definition is being driven by some pencil-pushing insurance agent. I get it that today's sailboats are massive investments in capital but also they are massive investments of our lives. The one thing that I absolutely have not read is there are no regrets at all about the choices you have made. I can see the love of your vessel, love of the seas, and love for your journeys. I congratulate all of you and look forward to my offshore journeys and adventures.


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## RegisteredUser (Aug 16, 2010)

Insurance...
Seems to be an elephant in rhe room for many


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## MikeOReilly (Apr 12, 2010)

OB, all you’re doing is stating the obvious: some ‘passages’ are harder than others. Some come with different challenges than others. But this is true of any journey. Clearly heading off across an ocean brings certain challenges, some great some small. So too with coastal hopping, or shorter jumps, or just weekend cruising. Seems silly to try and make one greater and one lesser. They are different. And allowing insurance companies to define what we do is even more — undesirable.

GLausin, you’re right to push back on letting those "pencil-pushing insurance agents” dictate how we cruise. Not all of us allow ourselves to be so corralled.


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## colemj (Jul 10, 2003)

outbound said:


> There's a fundamental difference between always being in sar helicopter distance and being on your own.


This is more a factor in where specifically one is passagemaking. I don't think there is much of the cruising Northern hemisphere Atlantic, for example, that is out of SAR range, even if crossing the ocean. On the other hand, I think there is a lot of popular coastal cruising in the world outside of SAR range.



outbound said:


> Other than arguments about valuation they don't care about getting surveys.


This is not true at all. Every insurance company I've ever contacted (many, many of them) require a vessel survey for coverage regardless of ocean crossing or live aboard in a marina. Many of them require resurvey every so often too.



outbound said:


> But I still think passagemaking means crossing oceans. Will back down on how you what to define it but know it feels different. Maybe it's the point were the routine of the boat becomes your natural routine and it's no longer an interruption in the usual day to day because it's the usual day to day.


Boston to France is ~1,000nm shorter than Boston to Brazil. It can't be about crossing an ocean - those are arbitrary stop/end points that are only defined by containing land masses and direction of travel, and not distance or challenge.

For me, natural routine returns on the morning of day 4 on passage. Overnights are fine; I hate 2-3 day passages (although make many of them); normalcy returns days 4+. Most likely this is a personal thing WRT circadian rhythms, etc, and differs person to person.

Mark


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## Arcb (Aug 13, 2016)

The watch schedule thing is interesting. On commercial boats, used to stand a lot of 6on 6 off watches. Usually for 30 days at a time, once for 90 days. Most commercial vessels continue fire/gangway/anchor watches when in port/anchor, so the cycle doesn't stop until crew change.

Very different rythm from the short watch cycles often adopted on recreational boats.


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## MikeOReilly (Apr 12, 2010)

Arcb said:


> The watch schedule thing is interesting. On commercial boats, used to stand a lot of 6on 6 off watches. Usually for 30 days at a time, once for 90 days. Most commercial vessels continue fire/gangway/anchor watches when in port/anchor, so the cycle doesn't stop until crew change.
> 
> Very different rythm from the short watch cycles often adopted on recreational boats.


Interesting&#8230; we've played with various watch rotations. I prefer a longer period, but my partner likes shorter. We've settled on a 4-hour watch, which seems OK. But the longest continual passage we've done is three days. And we only sail with the two of us &#8230; never taken on crew, and no interest in doing so.

Might be interesting to hear what others do.


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## outbound (Dec 3, 2012)

I’m totally pissed about how things have evolved in so many features of our lives both on land and sea. Believe the desire for profit and control is increasingly cloaked in the obscuration of benign intervention or surveillance supposedly for our benefit. Given our behavior is monitored by our smart devices (what we buy,read, where we go) our news input, ads, and offered options are to some measure predetermined. Our decisions about how to live and what to do increasingly can only occur within defined limits.
Earlier in life I would take insured vessels out by myself and sail east. Then sail west. No landfalls just go back from where I came. Goal was simply to get off the shelf into the open ocean and get the healing and emotional centering the sea gives you. Be in the world god made not that of man. Now, although I’m on a stronger, better boat, have more skills, more experience and are better prepared I need two others with me who are pre vetted by the insurance company. As recently as 2 years ago insurance placed NO crew requirements on me. I could even go Newport BVI by myself. Now I can’t get a US owned US based US administered insurance company at anything approaching a reasonable cost. The best I can find is US based but claims reported to England with the company ultimately owned by Germans. Saving grace is if there’s a dispute it occurs in US courts. Still it’s now its “special risk” insurance which requires me and two for passage ( 250nm offshore definition) and me plus a vetted crew(my wife) for coastal. I’ve loved single handing. Even now I usually run the boat by myself with crew just being live lumber except on passage. Freedom is being chipped away.
Same on land. Just built a small, self sufficient, zero carbon footprint house. Although on just 1/3 of an acre was required to get permits from
Historical commission (knocked down an abandoned cottage deemed unfit for human occupancy)
Certify no endangered species on this speck of land
Conservation committees ( town, state, fed rules as its inside a park)
Building commission, all abutters (town is an abutter) 
EPA (huge hassle as I’ve had to hire a engineer, landscaper and go to innumerable meetings to get certified that no rain water from the property goes into the pond) The property is sand. It percs straight down. It’s a postage stamp. Still the soft costs have been huge. The whole thing ridiculous as we haven’t changed grades and size/placement of the new structure is about the same as the tear down. There was a decrepit dock that had fallen into the pond and rotted. Replacing it was torture. Had to submit plans, show pictures of old dock (fortunately neighbor shared some) and only certain types were approved so could only use an approved vendor. 
What I use, how I build, and where I build (exclusion zones etc.) have all needed pre approval. Even drilling the closed loop wells for the geothermal was a PIA. Freedom chipped away.


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## Arcb (Aug 13, 2016)

Mike, here is a good article on hours of rest for commercial sailors.

It kind of demonstrstes why 6 and 6 is so popular with commercial vessels all over the world.

Key points are, minimum 10 hours rest in a 24 hour period, and those rest periods should not be divided into more than 2 periods. Basically, commercial sailors have to get, a minimum of 5 hours continuous uninterupted rest in a 24 hour period.

So 6 on, 6 off allows for very lean crew numbers while still giving the crew a decent sleep.

https://www.marineinsight.com/marit...ours-rest-hours-on-ships-including-stcw-2010/


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## SanderO (Jul 12, 2007)

Thoughts on watches and insurance

Watch sched needs to allow crew to get the rest they need. 6hrs on watch feels too long and so fatigue and or boredom will set in. Not good. Too short, the off watch has no time to get decent sleep/rest.

When I did a 2 person delivery of 4,000+ miles we did 4 on and 4 off in the evening... and were more flexible during daylight. Conditions impact watch length.

For a 3 person crew... 3 on and 6 off is terrific.

++++

Insurance may be a waste of money for offshore. The likelihood of YOU surviving and the vessel be salvageable for repairs is almost zero. Change of surviving and having a repairable vessel in a "collision" off shore is also almost zero. 

Coverage while local cruising "close" to shore where you can encounter other boats and so forth... makes some sense. But you need to evaluate the risk/benefit. I have owned Shiva since 85 and spent 4 yrs out of the USA in the Caribe. I have had no incidents over 34 yrs and more than 50k miles. I am required to have liability insurance at boat yards and marinas where I winter the boat.

Insurance is great idea... but the entire model of insurance seems flawed. We can see how the insurers are part of what's wrong with the health care "industry". I presume it's not that different in the marine industry.


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## MarkofSeaLife (Nov 7, 2010)

GLausin said:


> My question to the forum is how often do you do passages to get to different cruising grounds? And what influences your decision to do a passage? Did the length and type of sailboat you purchased affect that decision? Was the length and type of sailboat you purchased based on the idea that at some point you will do passages or not?


I haven't had much time so haven't read this thread.

The ones I do are affected by the seasons and visas.

If in the Caribbean and its coming up to summer you have 2 choices: Stay in Grenada boring your sox off or get the hell of a long way north out of the zone.
Similar when in the USA and the visa is about the expire... either head to Canada for a winter or cross the Atlantic to Europe.
The Pacific... as soon as you go through Panama you have a growing hurricane season growing up your butt... you either move on or you get engulfed by the next season.

Mark


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## MarkofSeaLife (Nov 7, 2010)

GLausin said:


> Perhaps "passage" wasn't the correct word to use in this circumstance, but you got exactly what I was meaning by it.


I think everyone understood you use of the word "passage" and if they didnt they should go for a sail for 3 weeks non-stop and then compare it to whatever else flitted through their mind. 

Mark


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## capta (Jun 27, 2011)

I have always done 4 on and 8 off with three crew and 3 on and 9 off for four. This allows every crew member a solid sleeping time of at least 6-7 hours. We never vary the watch schedule, never, but the crew off watch are free to do as they wish unless there is work to be done. I've found that the regular rhythms of a set schedule make it easier for everybody to sleep. I also allow the watch stander to set the tone of the watch. That person can ask that he/she be left alone in the cockpit or have others around as their mood dictates. There is always a dedicated cook, with basic meals planned at the time of shopping.
When sailing long distances with just two, *with a vane gear or autopilot that actually steers at all times* I often do 12 on and 12 off, 2 AM to 2 PM. As the watch stander is not tied to the helm, this isn't a difficult watch and the watch stander can fish, keep a good look out and generally keep themselves busy around the boat. This gives the off watch person plenty of free time and fatigue seems to be minimized.
I do not allow pod casts, music with earbuds, head phones or reading on watch. No more than 12 minutes (the time it would take an 18 knot ship to become a potential collision risk if below the horizon and not seen at minute 1) may be spent below or being inattentive to our surroundings. Single handing I use an old fashioned mechanical kitchen timer for this. This formula has only failed me once and that was a military ship.


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## colemj (Jul 10, 2003)

SanderO said:


> Insurance may be a waste of money for offshore. The likelihood of YOU surviving and the vessel be salvageable for repairs is almost zero. Change of surviving and having a repairable vessel in a "collision" off shore is also almost zero.


The problem is unless you are that guy who spent 1000 days sailing a big heart shape path in the Atlantic, your offshore passage is going to end in a relatively short time. It isn't possible to drop coverage for the offshore passage, and pick it up again near shore.

If an insured boat is lost offshore, one gets the insurance money - kind of the whole point of insurance. Lots of people in recent times have lost the boat but not their lives.

Mark


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## Arcb (Aug 13, 2016)

MarkofSeaLife said:


> I think everyone understood you use of the word "passage" and if they didnt they should go for a sail for 3 weeks non-stop and then compare it to whatever else flitted through their mind.


Sure, I still understand a passage to be a non stop voyage between two different places on a vessel, regardless of length of the voyage. Just like the navigation texts say


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## mbianka (Sep 19, 2014)

As others have mentioned coastal cruising can be just as dangerous as an ocean crossing. I keep reminding my self that you don't have to be on an ocean passage for things to go bad. You can have all the rescue resources less than an hour even minutes away and still not make it:

*Exhibit A: *
As of 8:00 p.m. on Sunday, May 4, the Coast Guard was searching for a missing boater near Jacobs Point, New York, today. Missing is Ciro Stellgas, 59, of Selden, New York.
Riverhead Police Department notified Coast Guard Sector Long Island Sound stating that they received a call at around 1:00 p.m. from an individual aboard a sailing vessel stating it was taking on water approximately 3 miles north of Jacobs Point.

According to Riverhead Police, Stellgas was reportedly sailing from James Creek, New York, on Thursday, headed to Port Washington aboard a 26' fiberglass sailboat named "MAC" with New York State registration number NY7059FR.

Agencies involved in the search:
An MH-60 helicopter rescue crew from Coast Guard Air Station Cape Cod
A rescue crew aboard the Coast Guard Cutter Tiger Shark, an 87-foot patrol boat homeported in Newport, R.I.
A 45-foot rescue boatcrew from Coast Guard Station New Haven
A 45-foot rescue boatcrew from Coast Guard Station New London
Suffolk County Police Marine and Air division

*Exhibit B:*
https://www.soundingsonline.com/news/solo-sailor-lost-in-clear-calm-weather

Southbound cruiser fell off his Formosa 41 ketch without a life jacket while entering a N.J. inlet

Vanorsdell was making his first passage to the islands for the winter.

On the evening of Monday, Oct. 6, after a long day of sailing south along the New Jersey coast, Vanorsdell lowered his sails off Barnegat Inlet, his destination for the day. His body was found the following afternoon floating about four miles to the east in the Atlantic. New Jersey State Police, who with the Coast Guard searched for the Hanover, Mass., sailor, say he apparently slipped, fell overboard and drowned. It was an abrupt end to a longtime fantasy for the 61-year-old Vanorsdell, who friends say was heading south for the first time for a footloose winter in the islands.

Now the three boats were just off Barnegat Inlet. Vachon turned in before Myette, who looked back and saw Vanorsdell lowering his sails. All of the sails on Vanorsdell's Second Wind were hanked on, with no roller furling system. The headsail and main were down when Myette entered the inlet.

But looking back again, Myette saw Second Wind, with the mizzen still raised, sail past the end of the inlet. He took up his microphone and called Vanorsdell on the radio. There was no answer to his repeated calls, both on the radio and a cell phone.

A recreational angler nearby on a powerboat heard the calls and volunteered to check on Second Wind, Myette says. The angler found the engine running and the radio on, but no one on board.


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## GLausin (Sep 2, 2019)

That sucks Outbound, only strengthens my resolve to get off this rock. I'm sorry you are having so many problems.


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## MikeOReilly (Apr 12, 2010)

Watches: I would prefer longer, but my partner does not. So we've compromised on 4 hours. We are at two-person crew. Our boat has good self-steering, but still requires on-watch monitoring.

Insurance: It is my observation, based mostly on these kinds of Internet threads and survey data, that boat insurance is getting costlier for most, with increasing limitations or demands placed on who or where or how people can cruise.

In a current thread over at CF a poll is showing nearly 40% of respondents have now moved to _liability-only_ policies vs having full, or _comprehensive coverage_. In an insurance poll I ran two years ago the proportion was more like 15% liability-only vs 85% full coverage.

It's dangerous to draw too many firm conclusions from such limited sampling, but it does suggest a shift.

Personally, I've studied accident rates for cruising level boats and am confident is saying the real risk for most of us is very low. Given this, I would happily go liability-only if my policy stopped passing the cost-benefit analysis.

(As it is, my comprehensive policy actually went down this past season. I am in Canada, cruising Newfoundland, which is not known to be the easiest sailing grounds. But for whatever reason, insurance is still pretty cheap up here.)


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## Minnewaska (Feb 21, 2010)

SanderO said:


> ....Insurance may be a waste of money for offshore. The likelihood of YOU surviving and the vessel be salvageable for repairs is almost zero. Change of surviving and having a repairable vessel in a "collision" off shore is also almost zero. ......


The chance of getting the vessel back, after a terrible accident at sea is low, but doesn't that argue to have insurance, rather than not?

If you have proper survival gear, many have been rescued from lost vessels, as well.


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## SanderO (Jul 12, 2007)

Minnewaska said:


> The chance of getting the vessel back, after a terrible accident at sea is low, but doesn't that argue to have insurance, rather than not?
> 
> If you have proper survival gear, many have been rescued from lost vessels, as well.


not likely


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## Arcb (Aug 13, 2016)

I looked unto this Ocean Cruising Club thing.

From what I can tell from the OCC website, they don't actually try to redefine the word passage. They seem, from what I can tell, to use the text book definition of a trip on a boat between two places.

It seems their discussion about 1000 miles out of sight of land etc. Isn't a definition at all. It's an entry requirement to their yacht club. From what I can tell, if you want to join their yacht club, fly their burgie or wear their blazer and ascot or whatever it is they do, then you must make a passage (a trip on a boat) that meets certain parameters that they have decided upon. You need not be a skipper or owner, you could even be a paying crew member from what I can tell, provided your passage falls within certain defined parameters.

Here is what their website

says: _Full Membership - A Full Member of the OCC must have completed a non-stop ocean passage between two ports, where the distance between the ports is not less than 1,000 nautical miles measured by the shortest practical Great Circle route, as skipper or member of the crew in a vessel of not more than 70ft (21.3 m) LOA._

https://oceancruisingclub.org/Membership


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## colemj (Jul 10, 2003)

MikeOReilly said:


> Personally, I've studied accident rates for cruising level boats and am confident is saying the real risk for most of us is very low. Given this, I would happily go liability-only if my policy stopped passing the cost-benefit analysis.


Yes, our insurance cost is jumping every year by large amounts, and the restrictions are getting tighter. Going liability-only is not an option for us because the boat is a large investment, our house, and everything we own is aboard. A total loss would be a large financial hit. For us, it would be equivalent to dropping homeowners insurance if we lived on land.

Others would have a different calculus for sure. A less-expensive boat, different cruising grounds or boat usage pattern, more personal wealth, more tolerance for risk/gamble, etc, would be a different case.

Mark


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## SanderO (Jul 12, 2007)

The definition of an offshore passage for that club is silly... You sail RI to Bermuda... 700 miles or so, crossing the Gulf Stream and that doesn't qualify??? Tell that to the race organizers of the Newport and Marion to Bermuda races.


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## outbound (Dec 3, 2012)

Thanks for that insight on OCC. will admit I’m a member but not much for rules so only looked at them when asked to join by a friend. Recall I needed a sponsor. So far haven’t met any live lumber in that group. Reason I joined was for the harbor captains. You go into a new spot and there’s always someone to clue you in to what to do, local knowledge about getting supplies and services. Flying the burgee means you get to meet good folks when they dinghy over to say hi. Get the same thing from ssca. Don’t consider either a yacht club as there’s no physical structure either call home. 

Have a view I think is similar to Mark. Still fairly inexperienced compared to him and many others here but there’s a real fundamental difference between a Bermuda race and his sailing non stop for 3 weeks. I approach that feeling having had a 16 day passage. Missed a lot of fathers days but know that just feels different. Felt the race had good support, pretty much hassle free at both ends and a relatively short jaunt. Usually rented a house in Bermuda so had new crew waiting there for the trip home. Felt like a brief break in my New England coastal cruising. Didn’t feel like voyaging. Took 2 weeks off from work when captaining my own boat. A week if crew. An interruption not a lifestyle.

Valuation survey comes in Monday. Think will go with Concepts and be done with insurance for the year. Just disappointing. Thousands of miles traveled and no claims. Feels like you're pissing money away. Still, after the house it’s my major physical asset so think liability only isn’t a good decision.


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## Minnewaska (Feb 21, 2010)

SanderO said:


> not likely


Which are you saying is not likely, that you'd lose the boat or that you'd be rescued with proper survival gear?

I'd say losing the boat is low odds, but high cost, if you do. I'd venture to say that well more than half, with proper survival gear, are rescued. Stories abound of these recoveries. Ironically, even if the boat is floating, you must abandon it, so that's still a risk.

Whether you insure the risk of loss of the hull has a lot to do with the value of it and one's personal ability to withstand the loss. Odds of loss and Cost of loss.


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## MikeOReilly (Apr 12, 2010)

colemj said:


> Yes, our insurance cost is jumping every year by large amounts, and the restrictions are getting tighter. Going liability-only is not an option for us because the boat is a large investment, our house, and everything we own is aboard. A total loss would be a large financial hit. For us, it would be equivalent to dropping homeowners insurance if we lived on land.
> 
> Others would have a different calculus for sure. A less-expensive boat, different cruising grounds or boat usage pattern, more personal wealth, more tolerance for risk/gamble, etc, would be a different case.
> 
> Mark


Our boat is our home. I'm sure it's not as expensive as yours (or most here), but it holds most of what we own. A total loss would be a massive hit.

BTW, we never carried any house insurance on our last land home. It was too costly vs the benefits. I was perfectly fine living with that risk as well.


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## outbound (Dec 3, 2012)

Wasn’t sarcastic. I’ve said innumerable times here I think coastal takes more seamanship skills, is harder and way more dangerous than an ocean passage. I continue to think that. Remain confounded that insurance premiums doesn’t that. Wonder about claims history. Suspect more money is paid out for coastal events then ocean. 
I also think when looked at by hours spent actually moving it’s as hard on the boat. Continue to think the whole thing is ass backwards. Believe you need to be a better sailor to sail coastal then ocean. Don’t think doing ocean is some great shakes when you can be way off on your navigation with no injury, not get the current right with no impact except making less vog, no tides to worry about, no lee shores, after a day or two no worries about people being unfamiliar with the boat. A lot of upsides to days just traveling. No worries about where you’re going to moor or anchor. Much lower stress about traffic and no fish boats or traps once off the shelf. No light pollution at night. No hand steering. List goes on. 
In terms of distance think that’s fluid. As previously said there’s a point (varies by person and passage) where days voyaging are the routine not the interruption. Time on land and it’s way of living are lost to you and no longer your day to day. The feeling flips. 
As an aside the US definition of “days at sea” would seem to have troubles. Have personally experienced US masters who are worthless on a sailboat. Have issues both with the mechanism of attesting ( one lies the other swears to it or one self attests) and absence of 24 h counting for a day. On the recreational (not commercial) level pay attention to RYA but not to US captain nor ASA when judging prospective crew. 
However do agree with you that definition is solely about qualifying for a club. Fully admit I misspoke and stated that already.


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## capta (Jun 27, 2011)

Were we not a charter boat, I would no more pay the insurance companies to bet against myself than I would base jump off the GG Bridge! The whole thing has become absolutely ridiculous for liveaboards. I can't count the number of times that just by being a full time liveaboard I have prevented a catastrophe aboard, like sinking from a broken hose, an electrical problem that could have escalated or similar.
The fact that we basically get no preferences for experience or residency makes it apparent that these companies don't care at all about whether they are in the business of insuring vessels worth less than millions and they make it known to us with their cavalier policies. Policies like mandating the number of crew for passages and excluding Grenada as a safer area to hole up in the hurricane season because there has been *ONE* hurricane in how many years, are not based on anything more than stupidity and ignorance.
We need to self insure as Ocean Yachts did in the '80s. As the boats were built very lightly to plane with smaller engines, they wouldn't hold up to consistent pounding. Most owners realized this and operated their boats accordingly, but those who didn't could end up with their interiors looking like they had been built by cabinet makes rather than boat builders. We need to start a club of some sort, contribute appropriate fees and get reasonably priced insurance for ourselves, cutting the insurance companies out of our lives completely. Even with higher deductibles, we'd be much better off operating under guidelines set by those who have some concept of the reality of cruising yachts. They certainly have proved they don't want our custom, perhaps we can show them we don't need to be ruled by their stupid charts and impersonal figures.


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## outbound (Dec 3, 2012)

Mike deeply respect your decision. My thinking has little to do with me nor the amounts involved. May surprise you it’s to do with my grandkids. I die want them to have a leg up for schooling or a house. If I sink or die without prior planning that money is gone.


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## colemj (Jul 10, 2003)

I think some here don't actually understand the insurance business. They are not cavalier, stupid, or impersonal (well, no more than any other similar business). They are a business - one that has been around for centuries - and understand their business better than anyone. Their practices and pricing are made with careful thought, study, and actual statistical data. They know exactly what their risks and probabilities are, what margins they require to operate their business, and what type of customers they need and want to run a good business.

It is that simple, and nothing more or less than that. Go ahead and leave them, or not - they have already planned for that. They may leave you - again, this would just be a dry business move, and nothing more.

Insurance is not an individual business; it is a shared risk pool. Whether you like or agree, you are subsidizing, and/or leaching off, other boaters. While any individual boater may be a dock queen numbnut, while another may be a liveaboard with deep experience, the pool of boaters as a whole has a set experience. The insurance companies work within this to maximize their profit and minimize their risks. This might mean limiting the numbnut to a restrictive boating area, while requiring a certain number of crew for a specific passage. These decisions are actuarial and studied, and not just some person sitting at a desk making arbitrary guesses.

FWIW, we took a lightning strike 9yrs ago that did considerable damage. The insurance payment was worth 11yrs of premiums. We had only made 3yrs of premium payments, so the next 8yrs were essentially free insurance. And we got all brand new equipment.

The above is an example of the risk analysis one needs to make when considering whether to insure or not. For us, it would take 100yrs of damage-free operation without insurance to just break even with the insurance payments over that time - assuming a complete loss. It would take 10yrs to break even with a more minor loss like a lightning strike or a boat hitting us doing only moderate damage. We have judged this risk in favor of comprehensive insurance.

Others will use a different calculus.

But insurance isn't a scam, or even arbitrary - it is only a business operated using common business logic and rationale practices.

Mark


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## capta (Jun 27, 2011)

colemj said:


> But insurance isn't a scam, or even arbitrary - it is only a business operated using common business logic and rationale practices.
> 
> Mark


Obviously I disagree completely.
I have no idea where you think the insurance companies get their info, but it certainly isn't from any sort of realistic investigation into cruising boats. The number of cruising boats lost at sea is infinitesimal compared to the number out there sailing. I can't see any particular advantage in carrying more crew at sea if a couple can sail for years together without any claims, which again, is the norm, not the exception. More crew adds to problems aboard and not the other way around, for most of us. And any certification of crew an insurance company may require is often based on basic USCG licensing, which every single one of knows is a sham, if it is taken as a measure of competence and experience!
It may be all about business to them, but to me it's all about greed and abuse of the trust the insured give to companies that will do anything in their power to *not* pay a legitimate claim. When I was operating the big yachts (power and sail) my insurance agent flat chat told me I wasn't paying to insure the vessel, but the payments were to hire a lawyer to represent my interests should there be a claim and he implied that those lawyers were there to protect me from my insurers.
So you can look at it from whatever view point you choose, but I see insurance companies, whether home, vehicle or marine to be nothing more than greedy, corrupt agencies mostly hiding behind the lawmakers' attempts to ride their coat tails to bigger "gifts" from the lobbyists. No matter what you call the marine insurance business today, I call it paying a lot of money to bet against myself and the vessel I chose to take to sea. For me, when cruising, I see this as a bad bet and would prefer a couple of days in Reno, if I wanted to throw my money away.


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## colemj (Jul 10, 2003)

Well, you can disagree based on personal anger and opinion, but you can't disagree on the facts. The facts are that insurance is a pooled-risk business, and not an individual-case business. They use actuarial statistics and cold risk-analysis to set policy and pricing. It is also a regulated business that has to meet certain standards for the countries they operate from.

If one operates outside of whatever sigma value the insurance bases on (likely one or two sigma), then one will either be getting a deal or paying a bit more for any given risk. They cannot slice down to individuals - first, they have no real good way to tell if you, for example, are actually any good as a low risk, and second, they couldn't afford this type of business model.

There are insurance companies and policies that do base risk on very low numbers and specifics - even singular items like an expensive watch - but they are expensive policies. This is not what boat insurance is or does.

Consider that insurers are pulling out of the recreational boat market in droves. Do you really believe they were profitable in this market but decided to just leave all that money on the table and walk away? Is it possible that pricing and policy are representative of the risk in this market? You could argue the degree of egregiousness of profitability, but obviously the risk and profitability is far less now than it was in previous times. IMO, if there was even moderate profitability in this market, they would not be leaving it.

Given what Mike pointed out earlier regarding evidence that people are dropping insurance, it leads one to conclude that profit is getting elusive in this market, and that this market has high price elasticity. If a business with high price elasticity feels they need to drop completely out of the market because they cannot meet the supply/demand balance, then that doesn't mesh with your opinion of them and their business.

If you believe it is better to take a small sum like an insurance payment each year and gamble it in a casino, then that is an option and choice. It has nothing at all to do with actual insurance, however.

Your heresay example doesn't make any sense. You state that your insurance payments are going toward lawyers that represent you and protect you from your insurers. Leaving aside the absurdity that an insurance company uses your money to protect you from themselves, what you stated sounds like a good deal to me - I pay money, and through whatever means, that money is used to protect my interests and make sure my insurance company doesn't screw me. 

FWIW, I have no background or experience in insurance, and am not defending them. My statements are made from many hours of study and research due to insurance being an important part of our lives - with many ways it could go wrong.

Mark


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## Minnesail (Feb 19, 2013)

Is the cruising boat insurance market, especially the offshore cruising boat insurance market, so small that it's hard for actuaries to develop meaningful risk tables?

It's pretty easy for automobile drivers. There are hundreds of millions of drivers and good records are kept of their behavior and payouts.

With the limited number of boats out there I’m sure they have to make some pretty broad assumptions to set any sort of rate.



And I can imagine insurance providers pulling out of a (currently) profitable market. 

“What’s our profit from this sector? Huh, that’s not very much.”

“And what’s our total potential liability? Well that’s kind of a lot.”

“And how firm a grasp do we have on the risk involved? You say we really don’t know? Screw it, let’s get out.”


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## MikeOReilly (Apr 12, 2010)

outbound said:


> Mike deeply respect your decision. My thinking has little to do with me nor the amounts involved. May surprise you it's to do with my grandkids. I die want them to have a leg up for schooling or a house. If I sink or die without prior planning that money is gone.


Doesn't surprise me at all OB. Seems perfectly reasonable. I have no children to worry about. Just have to be concerned with me and my partner. If we had children (or grandchildren) in the mix we certainly wouldn't/couldn't be as &#8230; frivolous? free? Our risk calculation would definitely change.

Like I said, everyone's circumstances are different, and insurance definitely makes sense for some (most?) people. I'm certainly not suggesting insurance is a poor choice. But it's not necessarily the best choice for everyone. And if the cost-benefit calculation shifts less in favour of the customers, it makes sense for people to question the value of this service.

BTW, I view insurance companies like all other for-profit enterprises. They are in it for just that: profit. They understand the risks (of not making money) so price their service accordingly. They maximize profit through maximizing revenue and minimizing expenses. In other words, they are looking after themselves first.

I don't think it's a scam, any more than I think casinos are a scam. I just think the companies know far better than most of their customers what the real risks are, and can price their service so they always win.


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## colemj (Jul 10, 2003)

Minnesail said:


> Is the cruising boat insurance market, especially the offshore cruising boat insurance market, so small that it's hard for actuaries to develop meaningful risk tables?


Well, that's what we have been discussing. Offshore passage making in terms of insurance doesn't make sense because nobody is going to structure an insurance policy along the lines of "_pay this amount for 5 months while you are coastal cruising, then pay this amount for the few weeks that you are offshore once you pass 250nm from any landfall, then immediately upon entering into 250nm from landfall again, start paying this amount, which is different than the first coastal amount because you are now in a different coastal region_". Instead, they just pool statistics together - ie. some cruising regions are more expensive and limited than others, and passage has some minimum requirements. No doubt the real offshore passage making (crossing oceans) has fewer statistics, but I bet a donut there is enough in there to show them that 1-2 people on a passage is financially more risky than 3+. Similar to other restrictions around age of rigging, boat, etc.



Minnesail said:


> And I can imagine insurance providers pulling out of a (currently) profitable market.
> 
> "What's our profit from this sector? Huh, that's not very much."
> 
> ...


That goes along with how I described it above. The business may be profitable, but a large liability, with increasingly unknown or not understood risk, does not make good business sense.

If your image followed Capta's reasoning, would they be flocking to insure us? - "What's our profit? - HUGE". "What's our potential liability? - Well, as long as we stick with experienced cruisers doing long passages short handed, but trust that they are as good as they say, then not much liability". "How well do we understand the risk involved? What risk? These guys know what they are doing, and will move their boats out of the hurricane zones they are in if one comes, and they never make mistakes."

Mark


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## colemj (Jul 10, 2003)

MikeOReilly said:


> I just think the companies know far better than most of their customers what the real risks are, and can price their service so they always win.


Yes. Exactly. Walmart, your car dealer, your government, your brothel - they all work this way. It is called business, and dare I say capitalism. It always puzzles me why people pick and choose, to complain or exult, among identical operating principles - insurance, pharmaceuticals, retail, your local crack dealer, etc.

"Winning" however, is a strange way to put it. They "win" only in that they make money off the transaction. Walmart "wins" every time you buy a banana there.

When it comes to boat insurance, no doubt the companies understand the risk to my boat better than I do. We are insuring based on our sensitivity to the potential risk to us, and I'm sure they know exactly what their coldly reasoned risk is for our boat. The proving ground is the price elasticity - will I pay what they want, or will they come down to what I think the risk is. If the middle can't be met to the satisfaction of both sides, then the price isn't elastic, and one side has to leave for financial reasons.

Mark


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## MikeOReilly (Apr 12, 2010)

colemj said:


> Yes. Exactly. Walmart, your car dealer, your government, your brothel - they all work this way. It is called business, and dare I say capitalism. It always puzzles me why people pick and choose, to complain or exult, among identical operating principles - insurance, pharmaceuticals, retail, your local crack dealer, etc.


Yes &#8230; I think that's what I said.



colemj said:


> "Winning" however, is a strange way to put it. They "win" only in that they make money off the transaction. Walmart "wins" every time you buy a banana there.


I chose the term "winning" because unlike your banana transaction, the service being sold is based on a statistical bet. The insurance company is betting I won't have an expensive claim, and I am betting I will. This is where the casino analogy applies - but that's not saying it's a scam. It's just that like the casino, the house is structured to win this bet.



colemj said:


> When it comes to boat insurance, no doubt the companies understand the risk to my boat better than I do.


Yes, and apparently they keep this information away from their customers. Which, by definition, makes this a flawed market. Efficient markets operate by assuming the customers are fully informed. In this case, we are not, even though we could be.

Hmmm, maybe it is a scam .


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## colemj (Jul 10, 2003)

MikeOReilly said:


> Yes, and apparently they keep this information away from their customers. Which, by definition, makes this a flawed market. Efficient markets operate by assuming the customers are fully informed. In this case, we are not, even though we could be.


I don't think I can agree with that. Insurance being a statistical business can't tell me what the specific risk of my boat is. They can group me in a risk category, and they are quite clear and upfront on what category that is (I am regularly presented with policy and price options around navigation areas, layup times, types of passages, value of boat and equipment, etc), but they cannot know the individual risk of our specific boat and how we use it.

I think we are as informed as they are in this sense. What they have is being on the good side of "gambler's ruin", where they have essentially infinite money compared to my finite money. It only takes a small offset here for them to make a profit over the long term regardless of me being fully informed of the odds, or even "winning" a couple of times, like the lightning strike I mentioned earlier.

On a more basic level, the odds and information are not even necessary - it is a supply and demand market controlled by price elasticity. If you won't pay their price, and they can't or won't come down in price, then one of you must leave the bargain. Somewhere in there, buyers and sellers will be happy. If a seller leaves the market completely because they cannot make money at prices the buyers will pay, then that is a broken market - not a scam. This seems to be the case recently.

For US residents, another factor in market decisions are the US liability laws. We have always been covered by non-US companies until a few years ago, when all of them refused to cover US citizens anymore - even though we were not asking to be covered in the US. I don't think any non-US companies are covering US boats anymore. The US companies that will cover need to take legal liability into account in their pricing.

Mark


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## GLausin (Sep 2, 2019)

I see insurance as a necessary evil, I can ***** and moan about it all day long that it isn't fair that I'm still paying as much as I am for insuring my cars even though I have not had to make any claims, but it only takes one moment to change that, and I'm not willing to take the risk of NOT insuring. With that being said what are ways to reduce risk in the eyes of the insurance companies? Obviously being clear of hurricanes during the season makes sense to me, but what about certifications from ASA, RYA, USCG, or ??? I know how to get my boat around a lake under sail just fine, but want to get the 101, 103 and 104 certs anyway (more for my knowledge than anything else). Is living aboard a higher premium than not?


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## chef2sail (Nov 27, 2007)

To use one of the examples here, What difference do certifications or living aboard have to do with frequency of being hit by lightening? Nada. What difference does your previous 10 years of no claim have to do with you absorbing a lightening strike...again NADA. 

It’s a pooled actuarial decision as Mark has been saying.

Having insurance in some instance is required. If you want to slip in a marina....most require insurance , in fact I have never seen where they don’t. Many yards where they pull boats and work on them are reticent to do itif the boat isn’t insured. 

I can see in the cruising world, where it could be an owners choice. In those cases I think the insurance company being the actuarial decision maker as Mark described, base their premiums on their statistics and are in business to make money. You as a consumer either take it or don’t.....no one is forcing you to. You have no right to tell anyone how to run their business. Your protest is to not buy it. If others choose like you , then the capitalistic approach is that the insurance company will modify their ask. If others don’t follow your lead ....you SOL. They have something you want.....After all who is taking the financial risk, you or them. 

Railing about being ripped off or some kind of political conspiracy is a non sequitur. It’s not a political decision on their part....it’s a risk assessment of a group.


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## paulinnanaimo (Dec 3, 2016)

Our insurance is quite reasonable at about $330 a year and surveys are not required. Liability is 2 million. The downside? The maximum claim value is 10 000 dollars and so many sailors would not be comfortable with this.


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## outbound (Dec 3, 2012)

Many of the above posts are predicated on the assumption Adam Smith principals are operating in pure form. They are not so the game is rigged.
Let’s look at marine insurance and flood insurance. I pick these two as they both affect your life as a sailor.
My brother in law lives in a flood plain. With mmcc he’s flooded out and he as well as his neighbors have been made whole repetitively. I have reason to believe but not hard facts for what follows. The neighboring marina, being a commercial enterprise, is on a different premium schedule. Their operating expenses rose in response so they’re gone. On the site condos are being constructed. Although the condos have their garages under the living quarters one can expect repetitive claims. Of interest due to local geography, fact is flooding was due to winter storms when the boats are stripped and blocked therefore secure and elevated so marina claims were negligible. The Marina was a significant employer. The boat owners spent a lot of dollars in local restaurants etc. the surrounding associated businesses are in decline. 
Marine insurance in real terms started with a bunch of guys sitting around in a coffee shop (Lloyd’s). No one of them had the resources to absorb the loss of a ship going down so they banded together. Given each member could join with anyone else competing bids were offered to the ship owner. Pure Adam Smith. The profit was the premium. Now for insurance the profit is not the premium but rather the black made by holding the money. In short your premium is invested. The gain from the investment is the contributor to the company’s bottom line. Anything that slows down pay outs or makes pay outs more difficult means that money will stay in their control generating income. At the ship level sums involved are huge so there is competition. At the cruising recreational level from the point of view of underwriters the sums are modest. Just like with Lloyd’s you need a group large enough to absorb a claim and remain solvent. This has meant a huge contraction of vendors as nearly all small independent companies have folded. Hence, Adam Smith no longer applies. One might think supply demand is applicable. Fewer suppliers more demand prices go up. However the market is distorted. Usually if prices rise too high demand falls. However in this market demand remains. Inability to moor, store a vessel, get a mortgage, protect a major asset means demand persists. They have you by the short hairs. Complain all you want but “it is what it is”.


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## outbound (Dec 3, 2012)

What continues to burn my butt is my boat is at greater risk in RI than the southern bays of Grenada during hurricane season. But my premium doesn’t reflect that fact. 
Similarly believe my boat is more likely to generate a claim coastal cruising than on passage and again my premium doesn’t reflect that.
I know my boat is safer (less likely to develop a claim) in my hands then when crew is on watch. I know my boat is safer when being run by me than a delivery captain. All damage on passages has occurred from crew or on the one occasion I used a paid captain. My premium doesn’t reflect that and the next policy requires three on board. Just not congruent to reality. 
In short insurance vendors know if I want to live my life the way I want to I have no choice. Facts don’t matter in spite of what some of the above posts say. To say it’s Adam Smith just isn’t true. It’s whatever the market will bear and the market is distorted.


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## Minnewaska (Feb 21, 2010)

I’ve interpreted the 3+ crew requirement to be due to the potential of crew incapacitation on far offshore passages. I can think of several examples of this on passages I’m personally familiar. One was a brutal infection, another was a broken arm, etc, etc. I suspect the risk is that the crew abandons and there is a full hull payout. 90+ percent of claims must be partial losses, so a full loss must really hurt the math. Lose one out of two and everyone probably abandons. One out of three or four and the remainder probably complete the passage. 

Anyway, I’m always partly amused by these situations. Insurance companies are not impossible to start or buy. Warren Buffet bought a little company focused on government employee insurance, added a talking lizard and a slogan (save 15% in 15 mins) and cleaned up. If the proposed problems with marine insurance were resolvable, at lower premiums, it would happen. 

I’m certain the problem is too high a variability in claims risk and fewer people buying insurance (or owning sailboats) each year.


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## SanderO (Jul 12, 2007)

The only smart thing that I know a marine insurer to do was have a clause which stated that if a named storm was headed to where your boat was... the insurance co would pay for the boat to be hauled and blocked and then re launched at participating marinas/boatyards. This was far from perfect because the path was not always obvious and so the co waited too long for sailors to get their boats out.

When I first bought Shiva I had such a policy and there was a named storm headed up to NE - Gloria at the end of September 85. So I called the co and asked... if they pulled the trigger. They hadn't. I decided to haul the boat... it was only 2 months old! I was headed west in LIS from Newport to Norwalk IIRC. I made arrangements at Milford Boat Works for the haul out. I took a train home. Hurricane swept thru on Friday. I drove up to to see what happened. Entire harbor was a jumbled mess of boats everywhere... almost impassable. Docks were messed up. Gov was surveying damage from a state chopper. Shiva was fine! I got her launched set up everything that I had removed and went on my way.

I had to complain the ins co but in the end they did re reimburse for the haul out.... They were trying to weasel out of the clause. You can see the dilemma for for them... pay to haul all their boats in LI and southern NE? When to issue to directive? I think they should do a reimburse after the fact leaving it up to sailors to make the call. I have been through many canes in LIS- NE and have since then tried to get the boat hauled. Not always possible. Left in a crowded mooring field damage can come from boats broken free from their moorings hitting yours even when your mooring held.


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## outbound (Dec 3, 2012)

Pretty standard they pay 1/2 for a haul. September is hurricane month. Issue has always been is it worth the money to relaunch after the storm goes by. The hassle for the yard is to move boats around after the storm to get those staying on the hard in one bunch and the others wet again.


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## outbound (Dec 3, 2012)

Boutique market. Facts don’t matter. They got you. Premiums don’t reflect risk.
Crew increases risk of abandonment. Look at experience of SDR and ARC rallies doing my specific transit to confirm this opinion.


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## tempest (Feb 12, 2007)

https://www.sailnet.com/forums/attachment.php?attachmentid=124826&thumb=1

I've seen this scene more times than I can count. I don't know a Marina in the entire state of N.J. that didn't suffer huge losses in Sandy. Boat U.S. had a trailer on-site for weeks working on Claims in my marina. Like it or not, This is part of the of Risk " Pool"

Like any other risk pool, the less risky, offset the costs of the more risky.

It's like going out to dinner with 16 people and dividing the check equally. The guy who orders Chicken and Drinks water, is subsidizing the Guy who orders Lobster and Wine.


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## MikeOReilly (Apr 12, 2010)

colemj said:


> I don't think I can agree with that. Insurance being a statistical business can't tell me what the specific risk of my boat is. They can group me in a risk category, and they are quite clear and upfront on what category that is (I am regularly presented with policy and price options around navigation areas, layup times, types of passages, value of boat and equipment, etc), but they cannot know the individual risk of our specific boat and how we use it.


Sure, but what's your group's risk? It's a statistical (actuarial) analysis that is easily communicated. I've never seen anything close to that kind of detail provided by insurance companies. Your policy price does communicate this, but in very gross terms. It's a piss poor way of getting an answer to this basic question.

Insurance is always marketed based on fear and loss. It's certainly not based on rational risk assessment. It could be IF customers were provided a full explanation of their actual risk profile, but that never happens.



colemj said:


> ... If a seller leaves the market completely because they cannot make money at prices the buyers will pay, then that is a broken market - not a scam. This seems to be the case recently.


My scam comment was meant as a joke, but whether you say the market is broken or call it a scam, the result is the same. You have a market failure where one side holds virtually all the information cards, and worse, the other side is increasingly forced to buy due to legal or commercial demands.

If your boat is owned by the bank, then you are forced to buy insurance. Increasingly it seems that marinas are demanding insurance just so boats can tie up to their dock. And if you want to haul out or get some work done, it is also mandated. So buyers are not acting freely, nor are they acting with full knowledge. I'd call this a market failure - at least from the customers' persepective.


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## tempest (Feb 12, 2007)

IDK, It seems like the market works the way all markets do. The Marina, the Bank and the Insurance Company all have risks that they need to hedge against. An owner has choices, albeit limited ones. One can own their boat outright and keep it on a mooring and haul it themselves. Once you ask others to share in your risk and cover your losses, there is going to be a cost involved. How fair that cost is pretty much what the market will bear. 

I have a vanishing deductible ( Zero, now) for having made no claims, in X # of years.


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## Arcb (Aug 13, 2016)

It seems boat owners certainly have some control over insurance costs. My current trailer sailer isn't insured. No need, paid cash for it, not a significant loss if something happens to it and I don't use marinas.

My previous boat was insured (sold 3-4 years ago, so my info is a bit out of date, but not too out of date). I had no choice but to insure it, no yard or club around here would let me use their facilities without it. The boat was my full time home and cruising boat, so fits into this discussion. Insured value about $40k. Regular insurance was about $600/year, plus I was charged $500 Live Aboard premium for being a full time liveaboard. The region covered by my regular rate was the Great Lakes and St Lawrence river including NYS Canals. So, really a pretty big area about equal in size to the US East coast and covering two countries.

The insurance shot way up as soon as I left that region. As soon as I went East of Quebec city I was looking at about $several hundred/month plus the live aboard premium. However, I was only charged the increased rate for as long as I was outside my home region, a 1 month trip would result in a 1 month increase in insurance. So, say a 4 week trip to Gaspe and back would cost me an extra $ few hundred in insurance.

So its clear to me, my insurance company perceived a lot more risk with offshore travel, than they did with living aboard, less than $100/month in live aboard premiums vs roughly $300/ month in premiums for cruising beyond my home region.

Having sailed the Florida Gulf Coast shortly after Irma and seeing the number of wrecked cruising style boats abandoned in the mangroves, I can kind of understand why.


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## MikeOReilly (Apr 12, 2010)

Arcb said:


> It seems boat owners certainly have some control over insurance costs. My current trailer sailer isn't insured. No need, paid cash for it, not a significant loss if something happens to it and I don't use marinas.
> 
> My previous boat was insured (sold 3-4 years ago, so my info is a bit out of date, but not too out of date). I had no choice but to insure it, no yard or club around here would let me use their facilities without it. The boat was my full time home and cruising boat, so fits into this discussion. Insured value about $40k. Regular insurance was about $600/year, plus I was charged $500 Live Aboard premium for being a full time liveaboard. The region covered by my regular rate was the Great Lakes and St Lawrence river including NYS Canals. So, really a pretty big area about equal in size to the US East coast and covering two countries.
> 
> ...


So this is interesting, and illustrative of how variable and loosely connected insurance rates are to reality.

I was cruising the same area as you during the same period in a very similar boat. Our insurance rates for our $60,000 boat was less than yours (somewhere around $500). This coverage extended all the way through Atlantic Canada, with no additional charges east of Quebec City. I think our only limitation was to be 100 miles tostados shore, and I think we couldn't go above 50 degrees North.

I've cruised Newfoundland this past three years. I was with my old insurer up until this year. No change in coverage, and I think the price actually notched down a bit with them. But I switched broker and underwriter (b/c they made me get a new survey, so I decided to shop around), and now pay even less for the same comprehensive coverage. But arguably I cruise in much more challenging waters now.

So &#8230; two brokers accessing underwriters who cover the same turf with apparently access to the same risk data. Yet we get significantly different prices. I think this supports OB's thesis that this market is closer to boutique, which means the price is rather disconnected from reality.

Further evidence; when I conducted a rather extensive insurance survey a few years ago here (some of you may remember), I found the rate people were paying ranged widely from a fraction of a percent to over 6 percent of insured value.


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## colemj (Jul 10, 2003)

I'm not sure why you would expect all companies/underwriters to have the same price for the same product. I don't see that as a sign of a broken or boutique market. It is this way for everything, else nobody would be shopping around for anything they wanted - just head to the nearest store.

In the case of insurance, some underwriters have larger customer pools, larger reserves/investments, larger tolerance of risk, etc. Some might be trying to build more business and pricing more aggressively on the risk scale than another. Some might be over-extended and raising prices to shrink their customer pool, or mitigate risk. There are lots of reasons.

Mark


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## Arcb (Aug 13, 2016)

I was caught off guard by the increased cost east of Quebec. I called just to let them know that's where I was going and they said, I by the way, we are going to charge extra for that. But it wasn't a ton of money and they didn't bug me for up to date surveys, which is a process that makes my blood boil, so I was happy to stay with them. 

I didn't think $1100/year was bad for a year round in water live aboard on the great lakes with the risk of ice damage etc.


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## chef2sail (Nov 27, 2007)

outbound said:


> Pretty standard they pay 1/2 for a haul. September is hurricane month. Issue has always been is it worth the money to relaunch after the storm goes by. The hassle for the yard is to move boats around after the storm to get those staying on the hard in one bunch and the others wet again.


Not an issue on the Chessie where the season goes much longer


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## chef2sail (Nov 27, 2007)

outbound said:


> What continues to burn my butt is my boat is at greater risk in RI than the southern bays of Grenada during hurricane season. But my premium doesn't reflect that fact.
> Similarly believe my boat is more likely to generate a claim coastal cruising than on passage and again my premium doesn't reflect that.
> I know my boat is safer (less likely to develop a claim) in my hands then when crew is on watch. I know my boat is safer when being run by me than a delivery captain. All damage on passages has occurred from crew or on the one occasion I used a paid captain. My premium doesn't reflect that and the next policy requires three on board. Just not congruent to reality.
> In short insurance vendors know if I want to live my life the way I want to I have no choice. Facts don't matter in spite of what some of the above posts say. To say it's Adam Smith just isn't true. It's whatever the market will bear and the market is distorted.


Is your boat safer in your hands for a lightening strike ?

Don't you think because you as a cruiser travel more miles a year that your are more at risk for an insurance company than say a weekend warrior like me?

Don't you think you are more of a risk with all the mechanical gadgets and electronics on your boat you are a greater risk than most?

It is to your advantage that weekend warriors like myself with less expensive boats are in the same pool as you are, we basically subsidize your insurance. At least with cars the differentiate the use in miles.


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## MikeOReilly (Apr 12, 2010)

Arcb said:


> I was caught off guard by the increased cost east of Quebec. I called just to let them know that's where I was going and they said, I by the way, we are going to charge extra for that. But it wasn't a ton of money and they didn't bug me for up to date surveys, which is a process that makes my blood boil, so I was happy to stay with them.
> 
> I didn't think $1100/year was bad for a year round in water live aboard on the great lakes with the risk of ice damage etc.


See&#8230; nary a peep from my insurance company when we told them we were not only sailing to Newfoundland via the St. Lawrence, but that we planned to stay there for many seasons. I never wintered in the water, but I looked into it, and again, our plan covered us without additions. And we were paying something like $535 if I remember correctly.

Not trying to one-up Arcb. Just pointing out how disconnected boating insurance rates are from any actual reality. Certainly reinforces the need to shop around. But companies don't make it easy. Of course, why would they? It benefits them to keep insurance looking like a black box for most boaters.


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## Minnewaska (Feb 21, 2010)

I'm guessing most aren't very knowledgeable of statistics and math, even when they are pretty smart on other matters. One company's risk will be different from the next, solely based upon their predicted risk pool. Ie. How many policies they think they will sell, based upon a given premium calculation. Whether they win or lose that prediction is what business is all about. No guarantees. Insurance companies go bankrupt, just like any other business. They all guess differently and certainly aren't going to let their competition know what there assumptions might be.

Some are even perfectly willing to expect losses, while they build statistical mass, giving a false sense of economy. Some lure in their clients will a losing premium, hoping to raise it later. It's more complicated than it looks to the consumer. I doubt very much many of them are making a killing on recreational marine insurance.


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## SanderO (Jul 12, 2007)

insurance companies are making handsome profits


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## MarkofSeaLife (Nov 7, 2010)

SanderO said:


> insurance companies are making handsome profits


They were never meant to make profits but to be a mutal assistance group, sharing back any profit.

First rule of Wall Street.... don't have money in the bank, buy shares in the bank!


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## outbound (Dec 3, 2012)

Lightening has been mentioned. Factually I’m at greater risk for a strike in R.I. than in Grenada. In fact strike risk in the Bahamas is high, just like Florida but low in the windwards. Still, Florida with the higher risk permits local domestic insurance at lower rates. But once in windwards/leewards rates go up. 

I’m subsidizing you not the other way around. Both statistics and human nature would suggest when your home or major asset is at risk you will take whatever actions reasonably possible to protect it and decrease risk. Whereas you may be more cavalier with a non critical asset viewed as entertainment. Liveaboards aren't losing just a boat. They are losing their house. Offshore passagemakers aren’t just losing a boat. They are likely losing their lives. Don’t you think they are very highly motivated to decrease risk. 

Pursuant to this strongly suspect the ratio of premium paid to claims made if disclosed by the industry would show live aboards and passage makers have lower claims c/w premium than domestic coastal policies. So still believe my segment is a boutique. The justification offered by broker friends is defined risk. When the risk pool is large and there’s a extensive claims history the risk to the insurer is defined. Therefore even if there’s a small profit per policy written ( lower valuations, seasonal use) given there are more policies the risk to the underwriter is lower. In short they are more likely to have a dependable income stream. Also there are other perks to writing domestic policies. Marketing boat policies increases home and car policies. Offshore policies don’t. This incentivizes vendors to remain in the boat policy market.

The above is further confounded by being unable to use claims history as a reliable variable in the calculus. R.I. has had more hurricanes, TSs, nor’easters and other significant destructive weather events than Grenada. My windstorm coverage in Grenada is more expensive and much less robust (higher deductibles) but is way more expensive than what’s available in R.I. Believe this is due to industry either having not quantified actual risk or their knowledge that they have you over a barrow. Think it’s the second as they aren’t stupid and it’s in their best interest to quantify risk.


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## SanderO (Jul 12, 2007)

insurance is not very competitive... seller's market.


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## Minnewaska (Feb 21, 2010)

SanderO said:


> insurance companies are making handsome profits


I don't know that to be true, but I hope it is.

Why? Because insurance companies are highly regulated and have minimum capital and reserve requirements, in order to prove they can actually payout on their insured risks. Back in the day, when insurance was little more than pooled risk, they often just couldn't pay, if the losses came in. Many couldn't pay at all, they were indeed scams.

The point is, for this capital to exist, so that we can have insurance at all, the profit needs to be an appropriate percent if the invested capital. This is no different than one requiring an interest rate on their savings account. However, this investment is at risk of bankruptcy. When the downside is greater, the upside must be too, or who would provide this capital assurance?

I always cringe when I hear "they make billions", therefore they're bad, greedy or should give me some. If those billions are not a sufficient percent of the conceivably hundreds of billions invested for the business to exist, what's the point to referring to their profit level alone. Would you invest in this company making billions, if your return was 1%. I bet not.

No doubt, some hit it big, that's the upside for taking the downside risk. It usually doesn't last very long. Especially, since everyone expects to a bigger return in their 401k, essentially pressuring these companies to take short term risk, hoping for big gains. Inevitably, most companies screw that up.


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## SanderO (Jul 12, 2007)

Insurance companies which issue shares and are traded... have an obligation to their shareholder to make a profit.

Yes it is possible for people to share risk and not have a corporate structure to extract high fees and profits for shareholders.

+++++

Back to OP.

If you want to cruise someplace which is long distance... days I suppose... you have to make a passage to get there. Cruising is living aboard and visiting various ports/exploring which are largely less than a day's sail apart.


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## outbound (Dec 3, 2012)

My experience has included being a weekend warrior for many years, a cruiser for a few years and done a few passages over a period of years. 
When constantly on the boat maintenance is not deferred. Given the absence of a schedule weather decisions are made to maximize safety. Given frequent use skill set is at my best. My tolerance for motion and ability to maintain balance at its best. Would suggest although more miles traveled risk of damage to the boat or myself (therefore degrading my performance) and resulting claim risk is decreased.
Wouldn’t further suggest risk on passage is lower than risk doing coastal. Boat is at its best level of preparation. Maximally crewed. Collision risk and grounding risk at its lowest. Have daily professional help as regards weather routing. Have no reluctance to detour days in advance and hundreds of miles or slow/hove to for days to miss weather. The absence of pop up storms and the risk of hyper local weather is markly decreased. Both while cruising the US east coast and the islands have experienced very local weather events due to land/coast interactions that do not occur in the open ocean. Sure there are white gales, microbursts and the like but they are rare. Sudden downdrafts off mountains, t storms, brief squally weather at bay exits isn’t. Anytime you have a sudden demarcation between cold and hot you can have sudden mixing with resultant sudden events. More likely coastal than ocean. 
I’m sure if I was lucky enough to get on Marks boat she’d be good to go. Like to think the same for most posters here. While working and weekend sailing often I’d take the launch out settle my company down. Show them how the head worked, where things are and just take off. Will admit, unlike now where I go through a detailed check list every time the boat moves, I’d take a peak at the bilge, throw off the pendant and leave. Ok throw stones but I’m sure some here get a bit loosy goosy about best practices when going for a brief daysail with company. Especially when under time constraints.


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## SanderO (Jul 12, 2007)

Insurers don't like offshore passages because help is far away and things can spiral from bad to worse and there is likely no other vessels around to assist... as if they could. Who is going to pay to tow a boat hundreds of miles in the ocean... and then repairs? Coastal accidents lend themselves to cost effective repairs.


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## outbound (Dec 3, 2012)

So a total loss is X dollars but occurs very rarely offshore A repair coastally is Y dollars and occurs much more frequently. I believe X times events is less than Y times events. In other words in a given time frame much more money is paid out per unit insured for repairs then total losses. How does this justify the increased expense of offshore insurance? 
Question remains if this is due to fact or the ability to demand the increased premium. The prior suggestions to force vendors to be transparent about their actual claim history would answer that question. although “regulated” the regulations do not include the need to be transparent about this, ratio of successful claims nor time to settle claim. All three data points would inform the decision of who to buy insurance from and what a reasonable premium would be.


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## chef2sail (Nov 27, 2007)

MarkofSeaLife said:


> They were never meant to make profits but to be a mutal assistance group, sharing back any profit.
> 
> First rule of Wall Street.... don't have money in the bank, buy shares in the bank!


I for one do not agree. I don't want to subsidize cruisers costs.

Don't agree they weren't to make a profit. ...they are private enterprises....they have the right to make whatever they can......you have the right to not use them, no is forcing you to....they are taking all the monetary risks....they are not charities to protect everyone.....that's socialism

If you want a setup where boat owners bond together to get decreased insurance costs, try and convince boaters organizations like SCCA to do it.

If they came up with a plan cheaper than the insurance companies that would put pressure on them to decrease costs...that's how capitalism works.l


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## chef2sail (Nov 27, 2007)

outbound said:


> So a total loss is X dollars but occurs very rarely offshore A repair coastally is Y dollars and occurs much more frequently. I believe X times events is less than Y times events. In other words in a given time frame much more money is paid out per unit insured for repairs then total losses. How does this justify the increased expense of offshore insurance?
> Question remains if this is due to fact or the ability to demand the increased premium. The prior suggestions to force vendors to be transparent about their actual claim history would answer that question. although "regulated" the regulations do not include the need to be transparent about this, ratio of successful claims nor time to settle claim. All three data points would inform the decision of who to buy insurance from and what a reasonable premium would be.


I don't agree with your premise. Would think most loses offshore may be more complete property losses as well as possibly incur liability losses to. I would think they are larger and more expensive boats.

What other private businesses do yo have the RIGHT to ask the formulas on how they make money to. It's up to you as a consumer to figure out how to choose one against the other.

Should doctors be required to publish their P/L statements, the amount of times they have been sued, their mortality or success rates?

I understand why you want these asks but really as a consumer what right do you have to require them to be transparent about. The ones that are...bully for them....that can go into you choice in using them.

Insurance companies take all the risk here....you have a choice to use who you want....if you choose to use that.


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## chef2sail (Nov 27, 2007)

Maybe the insurance companies should separate out the cruisers from the majority of the others they Marine insure. You’d have one large pool of weekend warriors and one small pool of cruisers/ passage makers. 

I’ll bet the cruisers insurance costs would go up significantly and the weekend warriors would remain close to the same. I’ll be speculate but can’t prove that the cruisers insurance costs are subsidized by the bulk of other boat owners .


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## colemj (Jul 10, 2003)

Again, insurance is a pooled-risk business. If we can't agree on that, then there is no point in further discussion. If we do agree on that, then the fact is that pooled-risk follows some sort of distribution curve. A distribution curve can be described by standard deviations. An insurance company doesn't cover the entire risk curve - it makes its bet somewhere in the middle - probably one, but maybe two Sigma - 68% or 95%.

If one falls outside this range - and I suspect cruisers like Outbound and Capta do on one end, as well as the numbnuts that are a menace on the water on the other end - then one either emotionally feels they are either getting ripped off, or they are getting a great deal, depending on which end of the curve one is outside of. The reality is just that - one is outside the business risk decision, and is either subsidizing, or being subsidized by, those inside the business risk decision.

There is no need to understand what insurers think one's individual risk is, because it doesn't matter. The majority of the price is based on that 1-2 sigma risk assessment of the pool, and the rest is based on generic risk of cruising area and distance passaging. As for the latter, no company can know how great you specifically are compared to the majority of people doing what you do. Even though you all know and can prove you are better than all those other idiots out cruising around with you.

That's the "scam", or the "game", or whatever you want to feel about it. It's a business, and one has many choices - stop buying the product, buy a lesser amount of the product, make your lifestyle fit the product, or buy the product amount that fits your lifestyle.



chef2sail said:


> Maybe the insurance companies should separate out the cruisers from the majority of the others they Marine insure. You'd have one large pool of weekend warriors and one small pool of cruisers/ passage makers.


Actually, some do. Markel, for example, has their "Jackline" product that is for cruising boats. It's terms and pricing are different than its separate general boaters insurance products.

Most other companies separate cruiser products by simply having different terms and prices for those doing offshore or large area boating.


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## MikeOReilly (Apr 12, 2010)

chef2sail said:


> I for one do not agree. I don't want to subsidize cruisers costs.


I agree with the principle of pooled risk. It's part of the price of civilization. Heck, it's all over the place, from police and firefighters, to roads, sanitized water and even the military. All examples of communal action - better known as socialism 



chef2sail said:


> Don't agree they weren't to make a profit. ...they are private enterprises....they have the right to make whatever they can......you have the right to not use them, no is forcing you to....they are taking all the monetary risks....they are not charities to protect everyone.....that's socialism


On the question of having a choice&#8230; well, that's technically true, but in reality most boaters have little choice. If the bank owns your boat, then you have no choice. If you want to use a boat yard to haul out or do any work, then you have no choice. And increasingly, if you just want to tie up to a dock for a short while, you have no choice.

But I agree with you. Insurance companies are, by and large, for-profit corporations. As such, their first duty is to the owners and shareholders. The must make a profit, by law and by reality. Without profit, they go broke.

But I think the point OB was making is that insurance in it's original form, was not a for-profit enterprise. It was pooled risk, undertaken by groups of like people, usually by a small enough number of people that personal contact was possible. We could get back to this model for boat insurance, but it is no small task. Which is why we need for-profit corporations.


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## chef2sail (Nov 27, 2007)

MikeOReilly said:


> I agree with the principle of pooled risk. It's part of the price of civilization. Heck, it's all over the place, from police and firefighters, to roads, sanitized water and even the military. All examples of communal action - better known as socialism
> 
> On the question of having a choice&#8230; well, that's technically true, but in reality most boaters have little choice. If the bank owns your boat, then you have no choice. If you want to use a boat yard to haul out or do any work, then you have no choice. And increasingly, if you just want to tie up to a dock for a short while, you have no choice.
> 
> ...


Yep...that's why I suggested the SSCA model. ...it is pooled. Mark just had the best description yet.


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## GeorgeB (Dec 30, 2004)

Interesting discussion. Rather than toss anecdotes and rumors around, I thought to “pull the thread” on my BoatUS policy. Drilling down to marine insurance (and specially “ocean”.) One has to slice the onion pretty thin – too thin for any available financial data that I could find. Turns out that BoatUS is owned by Geico which in turned is owned by Berkshire Hathaway. Geico Auto (I’m assuming that marine is a subset) had an underwriting loss of $310 million in 2017 (latest free annual report). Primarily attributable to three major hurricanes in the U.S. and Puerto Rico and wildfires in California. Eighty seven percent of the premiums were paid out in claims that year. The remainder was operating expenses. Insurance is pretty complicated. There are a lot of additional costs (and revenues) for things like re-insurance, reserves, investments, etc. I think that the reason Berkshire owns GEICO is so they can control the reinvestment of reserves and not necessarily from the operating income or losses in any given year.


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## MarkofSeaLife (Nov 7, 2010)

GeorgeB said:


> . I think that the reason Berkshire owns GEICO is so they can control the reinvestment of reserves and not necessarily from the operating income or losses in any given year.


Yes, that's the strategy as I understand it (my basic undetstanding of it). In the old days us insurance companies held huge ivstabt cash reserves ready for payouts. Buffet saw that, realised it wasn't properly factored in as an asset in its share price. Started buying insurgence companies and stripping that money out.
Couldn't happen in the mutual idea of insurance.


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## colemj (Jul 10, 2003)

MikeOReilly said:


> But I agree with you. Insurance companies are, by and large, for-profit corporations. As such, their first duty is to the owners and shareholders. The must make a profit, by law and by reality. Without profit, they go broke.


I know you didn't say or imply this, but I wanted to make it clear because others have expressed issues with insurance being for-profit, and publicly traded: this is a necessity. Without the ability to go into cash, bond, and stock markets for funding and distributing/ameliorating risk there, there would not be any insurance options at all for us silly recreational boaters. It is unreasonable to expect that an insurance company would simply sit on 2-3 billion in cash waiting for an unlucky mass event, or series of them. The ONLY reason recreational insurance companies have survived the past couple of years at all is because they can leverage their stock, issue bonds, and borrow money. I don't know of a single insurance company covering the US that has been profitable in the past couple of years. Many of them couldn't survive and have pulled out of our market completely.

If you want good, inexpensive insurance for cruising, then go cruise the Med. Or the Maritimes. Or several other places. Insurance is cheap there. The Caribe is one of the worst places to be if one is sensitive to insurance pricing and coverage. You have options for a cruising life. Many options.



MikeOReilly said:


> But I think the point OB was making is that insurance in it's original form, was not a for-profit enterprise. It was pooled risk, undertaken by groups of like people, usually by a small enough number of people that personal contact was possible. We could get back to this model for boat insurance, but it is no small task. Which is why we need for-profit corporations.


I'm guessing that when people aren't pining for the old days of insurance, they are yelling at the kids to get off their lawn. First, the "good 'ol way" of originally doing insurance was for commercial shipping. And not even that - it was for specific boats on specific passages with specific cargo. Imagine having a little recreational sloop back then and stopping in the coffee house to ask the group gathered to insure you and your boat from the possibility of running aground or catching fire.

You are correct that it is no small task - it is an impossible task. Anyone who thinks differently doesn't understand the concept and practice. SSCA? Please - they can't even organize siamese twins. BoatUS was barely large enough to offer some insurance products based on membership groups (and they were public too), but they couldn't keep going in this regard, and sold themselves to Geico/Berkshire - a real insurance company.

I've yet to see a good argument about how boat insurance is a scam, or rigged, or egregious. I've seen real facts presented that nobody in this business has made money recently, and that many companies have folded their tents completely.

Insurance isn't even gambling - when I bet with insurance, I try my hardest to lose the bet. We maintain our boat, upgrade as needed, don't take risks or chances, sail in the right seasons in the right places with as good of weather forecasting as we can get, etc. If I was to gamble in Reno, I would be putting my dimes in that slot machine with my fingers crossed, and standing on my lucky leg, rubbing my lucky rabbits foot, and having my lucky girl blow on the dimes hoping to win the bet.

No, insurance isn't gambling. Both sides are hoping for the same outcome. Insurance is insurance - one is hiring the financial resources of another because one does not have the resources to cover all of the possible risks one is undertaking. While we could possible survive the financial loss of our boat, if we wrecked it on a reef and dumped the fuel tank, we definitely don't have the financial resources to cover the $2 million statutory pollution liability. Let alone the salvage of it.

Mark


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## RegisteredUser (Aug 16, 2010)

If i had a high $ boat, which i dont, and wanted comp insurance, i would see what was available with high deductibles. 
Say, 10k. Cover catastrophe and suck up the smaller stuff. Sleep at night
Should lower costs without fender benders being covered.
Zero deducts seem...insane to me
I have no idea if something like that is even available for rec boats


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## MikeOReilly (Apr 12, 2010)

colemj said:


> I know you didn't say or imply this, but I wanted to make it clear because others have expressed issues with insurance being for-profit, and publicly traded: this is a necessity. Without the ability to go into cash, bond, and stock markets for funding and distributing/ameliorating risk there, there would not be any insurance options at all for us silly recreational boaters. &#8230;


I don't know if it is necessary to have insurance be 'for profit.' Nor do I think it's impossible to set up a not-for-profit insurance company. But I agree, it is *very* difficult to do so in our capitalist countries. (And no, I'm not slamming, or criticizing capitalism. I'm just stating the facts as I see them).

&#8230;



colemj said:


> If you want good, inexpensive insurance for cruising, then go cruise the Med. Or the Maritimes. Or several other places. Insurance is cheap there. The Caribe is one of the worst places to be if one is sensitive to insurance pricing and coverage. You have options for a cruising life. Many options.


Why is the Caribbean so much more expensive? Hurricanes? The Maritimes certainly does get them too, although not nearly as many.



colemj said:


> I've yet to see a good argument about how boat insurance is a scam, or rigged, or egregious. I've seen real facts presented that nobody in this business has made money recently, and that many companies have folded their tents completely.


As I've said, I don't think it's a scam. The casino analogy is an imperfect one b/c, as you say, in the insurance case both sides are hoping the event doesn't happen. But it is apt in the sense that both sides are making a bet based on statistics. In that sense, I do think it is rigged to ensure the company wins. They hold most of the data cards, and are not shy in marketing their products in terms of fear and impact, as opposed to sharing the actuarial odds of an event happening (which is very low for most cruisers).


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## RegisteredUser (Aug 16, 2010)

If the grocery store did not think it could make a profit...it would not be there.
Duh...


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## MikeOReilly (Apr 12, 2010)

RegisteredUser said:


> If the grocery store did not think it could make a profit...it would not be there.
> Duh...


Unless it was run as a not-for-profit :wink.


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## RegisteredUser (Aug 16, 2010)

Da commune, yeah.
Sweet dreams are made of this- annie lennox..
Tis..real life


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## MikeOReilly (Apr 12, 2010)

Perhaps, but you do realize the non-profit portion of most western nations is quite large. Even in the USA it:

• Contributed 5.5% to GDP
• Paid $576.9 billion in wages and salaries,
9% of U.S. Total
• Employed an estimated 13.7 million people
• Had $2.1 trillion in revenues and
• $1.9 trillion in expenses

https://philanthropynewyork.org/sit...ector in the United States Size and Scope.PDF

There are other ways of running an economy.


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## RegisteredUser (Aug 16, 2010)

Gain true control of behaviour...you can have anything your dreams desire.
Not the thread for this...too far out..


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## colemj (Jul 10, 2003)

MikeOReilly said:


> As I've said, I don't think it's a scam. The casino analogy is an imperfect one b/c, as you say, in the insurance case both sides are hoping the event doesn't happen. But it is apt in the sense that both sides are making a bet based on statistics. In that sense, I do think it is rigged to ensure the company wins. They hold most of the data cards, and are not shy in marketing their products in terms of fear and impact, as opposed to sharing the actuarial odds of an event happening (which is very low for most cruisers).


No, they don't "win" because they rigged the system to hold their data cards in secret, nor because they market with fear. They "win" because they are on the house side of gambler's ruin - they have essentially unlimited capital compared to our limited. They can take hit after hit, and have multiple avenues of absorbing those hits, where we can't afford one hit. We might "win" occasionally, but not over the infinite term.

As I mentioned earlier, knowing your exact risk, as understood by an insurance company, is unimportant and inconsequential. You and I know our exact perceived risks. Outbound and Capta have talked at length about their exact perceived risks. Given that, we all are still buying insurance products. The reason is that we do not have unlimited financial resources (I'm projecting here), but we still want to play in this recreational boating game.

We don't buy insurance because we have an unexamined fear of anything, or allowed ourselves to be manipulated. We buy it because we fully understand the impact on our chosen lifestyle if we don't have it.

FWIW, I can't believe I'm defending insurance. It is a large portion of our expenses, and I'm as upset as anyone to be paying more for more limited policies. But I do seem to have a less emotional understanding of it than some. Sure, there probably is fat in the system. Definitely, some of us are subsidizing others because we not only fall outside the risk pool averages, but we also work hard at making sure we are low risk.

Mark


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## colemj (Jul 10, 2003)

Caribe is expensive because of hurricanes (Maritimes are no match here), number of boats (again, Maritimes are no match), length of season, and many other reasons.

Mark


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## MikeOReilly (Apr 12, 2010)

colemj said:


> ...We don't buy insurance because we have an unexamined fear of anything, or allowed ourselves to be manipulated. We buy it because we fully understand the impact on our chosen lifestyle if we don't have it.


Show me any marketing material put out by the insurance industry where there is a rational and reasoned presentation of the stats and odds of an event happening. In contrast, I can easily find reams of examples of insurance being sold based on fear of loss, with total focus on the impact of an event.

The house wins because they know the odds, and can price their product (game of blackjack, or in this case, insurance) so they are on the statistical winning side of the bet. The amount of capital one side has is irrelevant. If they don't price on the winning side, they will still lose, or in this case go bankrupt.


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## colemj (Jul 10, 2003)

MikeOReilly said:


> Show me any marketing material put out by the insurance industry where there is a rational and reasoned presentation of the stats and odds of an event happening. In contrast, I can easily find reams of examples of insurance being sold based on fear of loss, with total focus on the impact of an event.
> 
> The house wins because they know the odds, and can price their product (game of blackjack, or in this case, insurance) so they are on the statistical winning side of the bet. The amount of capital one side has is irrelevant. If they don't price on the winning side, they will still lose, or in this case go bankrupt.


Again, it is irrelevant what the odds are. People here state they know exactly what they are for their situation. I have a good understanding of the odds for us. It doesn't make any difference in pricing. The insurance companies price to maximize their profits. If they go too far, they lose profit because they price people out. You have stated this is the case for you. Others here are obvious outliers in the business model, and are griping because they feel like they are subsidizing others. Perhaps they are. Perhaps Jane and Jack in their weekend, summer seasonal, local cruising are subsidizing them. I don't know, but it doesn't matter.

What would you do differently if you knew the risk analysis and cost analysis of the group you are pooled in? What if you were an outlier to that group - what would you do about that? Do you really expect an insurance company in the recreational boating market to get into the detailed specifics about your vessel, your experience and skill, and your detailed itinerary - and then produce a single product customized to just you? They do this for certain commercial ventures, but do you really expect it for yours?

The amount of capital, or access to it, is highly relevant. It is to casinos, or any similar situation also. The odds, of course, are favored to the house. Why would it be any other way, and how would anyone stay in business otherwise? But look up gambler's ruin - that is the key to how this works, and it is reliant on the house having relatively unlimited resources compared to the client. This isn't a scam or a trick - it is just the nature of the business. If the insurance companies could not ride out a streak of claims, even an improbably long streak of them, then they would no longer be in business. When has a customer, or group of customers, broke a casino? That this has not happened is because casinos are highly capitalized, not because customers on any given night did not ever run the house down.

I really don't understand the argument that insurance is driving me on fear, and that I would be better informed if I had all their actuarial trade secrets that they don't want other companies to have, let alone me. I also don't have Walmart or Amazon's pricing strategies, but I still buy things from them. I've actually never seen any boat insurance marketing, and I have stated our reasons for pursuing boat insurance. No insurance company I've approached or worked with has ever marketed fear to me. They simply ask me what type of policy, restrictions, price, etc I want, and then present me with several options. When I've made choices, none of them have ever told me I'm going to die, or are underinsured, or are putting anything or anyone in jeopardy.

Are you sure you aren't coloring this aspect a bit based on personal opinion, or projecting other insurance areas like life insurance onto boating?

Mark


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## MikeOReilly (Apr 12, 2010)

Of course the odds matter. Insurance is all about mitigating against risk. Risk is proportional to Impact of the event AND the Likelihood of the event happening. So the odds are absolutely critical. 

I’m not saying insurance is scam, only that it is a service weighted in the sellers’ favour. The odds favour the house. That’s how ALL insurance works. If your broker came to you saying, “your risk is exceedingly low”, a lot fewer people would buy insurance. 

You’re right, I do have a good sense of my actual risk. But that’s because I’ve studied the accident stats. I’ve routinely posted access to these stats, but I know few bother to examine them. In these kinds of discussions it is clear to me most people have no idea what their real risk is, but instead focus their attention of the impact of a potential loss — just as the insurance sellers want.

No … I don’t think most boaters have a good sense of their actual risk, much like I think most people don’t have an accurate sense of the risk they face from crime, terrorism or driving a car. But that is intentional (in all of these cases) because there are vested interests that benefit from this ignorance.


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## SanderO (Jul 12, 2007)

Sharing risk is a great idea... and so the insurance industry comes along and monetizes it for profit.

So you have an organization like BoatUS... which has a large pool of members. Instead of setting up a coop with no profits... they do a deal with GEICO,a for profit company, and hand over hundreds of thousands of customers!


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## colemj (Jul 10, 2003)

BoatUS used to operate more as a coop for years. They couldn't survive with this model and changed/sold.

I understand our risk very well, AND I am focused on the potential impact. I don't understand why focusing on potential impact is a negative thing? For 1% of our boat's value, we have covered ourselves against a high financial loss that is low probability of complete loss, but moderate probability of costly damage (at least until we leave hurricane and lightning zones). 

I don't understand why knowing how an insurance company calculates our exact risk is necessary. Risk is not the basis from which most people buy insurance, regardless if an assessment was readily available. People buy insurance to.... (wait for it).... insure an asset against loss. This isn't unreasonable fear, or falling for marketing, or not understanding the risk probability - it is simply a good financial decision and valuable financial tool for many. 

I don't believe at all that if insurance companies said "your risk is exceedingly low", a lot fewer people would buy insurance. Heck, you, Capta, and Outbound have stated that your risks are exceedingly low, yet you still buy insurance.

What is the risk the British crown jewels will be stolen? Probably close to zero, but I bet they are still insured. 

Why do some here think that insurance companies know the detailed risk probability for their specific boat, but won't tell them? They don't have this fine of actuarial. What if they did, and they told you? Would you argue with them? Make them charge you what you think you should pay? Do you really think it would change their business terms and pricing? What exactly would be potential outcomes from knowing the risk assessment of the general boating pool one's insurance underwriters have grouped them into? I've asked this before, but have not received any answers other than restating the companies won't share that data, so the market is slanted or rigged.

However, insurance has paid off for us in the past. Again, our payoff for a lightning strike not only got us all new equipment, it covered 10yrs of insurance payments. 

I hope to never have a claim again.

Mark


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## MikeOReilly (Apr 12, 2010)

We're obviously talking past each other, and neither is listening, so I'll offer this one final observation and then do my best to move on. You stated



> Risk is not the basis from which most people buy insurance, regardless if an assessment was readily available. People buy insurance to.... (wait for it).... insure an asset against loss.


This is EXACTLY the definition of risk. You are insuring against a potential loss. The odds of a loss happening are absolutely pertinent to your assessment of your risk. Of course, the Impact of the loss matters. It is the other factor in the risk equation. I've never stated otherwise. But the odds of an event happing do matter to rational risk assessment.

You may know your risk (Impact x Likelihood) - I never said you didn't. But it's clear to me that most people don't. And the industry does its best to focus on the Impact of a potential loss, while failing to communicate the Likelihood. I wouldn't expect them to do otherwise - they want to sell insurance, and fear is a great motivator. But clearly they know the actual risk we face, because that's how they make money. It's the same formula for a casino; they know the odds, so can price their service (playing blackjack or selling insurance) accordingly.

Insurance is a service we buy. It is based on a risk assessment AND a cost-benefit analysis. If my risk is low, but the cost is also low, then it can be a good deal. I stated very clearly that if my comprehensive insurance failed the value test, I would switch to liability-only (b/c I have no choice but to carry this level of insurance). I lived in a home for 10 years with ZERO insurance b/c the cost exceeded the value when compared to my risk. I do put my money where my mouth is.


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## outbound (Dec 3, 2012)

My other insurance policies give me a break for prudent behavior and absence of claims over the years. That’s been true for 
Auto
Medmal 
House
Umbrella 
Workmen’s comp
Liability (trip/fall for the office)
Global liability 
Fire
Flood
Windstorm for residence and commercial properties 
Acts of government, crime, war
Lightening strike or electrical failure 
Above policies have been discounted for everything from electronic monitoring, construction details, and personal behavior as well as other things.
My marine insurance used to be the same. That’s no longer true. Please offer one reason why my insurance has become so much more expensive, deductibles so much higher and behavior so much more restricted on the basis of fact. Grenada experienced a TS this past Saturday. Forecast predicted 35kts g50 as worst case. Actual event was was wind in 20kt range. Grenada has not experienced windstorm event requiring claims since 2004. Still multiple insurance companies consider it as being in the zone with rates the same as BVI or Bahamas. Not supported by fact. In fact from recent experience as CC changes risk I’m at more risk in R.I. than Grenada. Now in process of moving from pantaenius to concept as best of a host of bad choices. Other choice is Netherlands insurance company. Have not seen any post that negates my view we are treated as a boutique segment and premiums do not reflect risk. Nor any post supporting statement with facts that cruisers are subsidized by coastal sailors. Continue in my view that is not supported by actual experience. Continue to believe we pay more, have the same or fewer claims and policies are more restrictive.


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## Don L (Aug 8, 2008)

maybe it just falls into the "because they can" world of logic

they don't need the caribbean boat business and so if they get some they make it really worth it for them

I know that 3 years ago when I got a quote it was 300% more for me to insurance for the caribbean than for Florida and the Gulf of Mexico. Not much logic to that really.


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## colemj (Jul 10, 2003)

outbound said:


> My other insurance policies give me a break for prudent behavior and absence of claims over the years. That's been true for
> Auto
> Medmal
> House
> ...


Every marine insurance company we have used has given us discounts for various things - automatic fire suppression systems, lightning protection systems, boating certifications, Coast Guard inspections, being out of a considered dangerous zone during certain periods, etc.

For sure, we are getting a discount based on our experience and track record. I say this because we recently sold a boat that had just come up for insurance renewal, so we knew the price from that company, for the coming year, for that boat, in that cruising area. The new owner applied for the exact coverage, in the exact cruising area, for the exact boat, for the same coming year, and ended up paying 40% more than us. When he inquired, he was told that the difference was based on difference in experience level and unestablished track record.

This is very common. We have an owners group that sometimes talks about insurance, and the prices are all over the place, even for the same company covering the same boat in the same areas. This must reflect something more than random.

So perhaps you are getting a discount on your premium. It might not be as much as you want it to be, but I bet the insurance company has it figured out. You might think RI is more risky than Grenada for hurricane season, but I bet it isn't. You might think Grenada is safe from hurricanes because it hasn't seen one for 15yrs, but I bet the damage of a hurricane there is riskier than RI. BTW, the last hurricane to come near RI was 28yrs ago.

The fact is that marine insurance has not been a good business for the past few years. This is reflected in pricing, terms, etc. They have pushed boundaries back trying to mitigate their exposure. Storms are forming out of normal season, have been more intense than in the past, have hit more unusual places, etc. No doubt some climate science goes into their actuarial assessment.

FWIW, I've never had a premium lowered in any insurance product for prudent behavior and lack of claims. Well, I got a discount on health insurance for not being a smoker, but that is it. The rest of it is simply reflected in the premium price - which I just related is the same for marine insurance.

Let me know if the Netherland company will insure you. We have used two Netherland insurers in the past with great experiences, but they both dropped us eventually because we were US citizens. No non-US companies we have contacted will write policies for us, and tell us they won't insure US citizens anymore.

Mark


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## SanderO (Jul 12, 2007)

I was under the impression that the profit model for an insurance company is not the spread between premiums and management/pay outs for losses.... but revenue from an investment model. I am usually wrong about these things however.

"How Insurance Companies Make Money
As an insurance company is a for-profit enterprise, it has to create an internal business model that collects more cash than it pays out to customers, while factoring in the costs of running their business.

To do so, insurance companies build their business model on twin pillars - underwriting and investment income.

... Investment Income
Insurance companies also make a bundle of money via investment income.
When an insurance customer pays their monthly premium, the insurance company takes the money and invests in the financial markets, to increase their revenues.

Since insurance companies don't have to put cash down to build a product, like an automaker or a cell phone company, there's more money to put into an insurer's investment portfolio and more profits to be made by insurance companies.

That's a great money-making proposition for insurance companies. An insurer gets the money up front from customers, in the form of policy payments. They may or may not have to pay off a claim on that policy, and they can put the money to work for them right away earning investment income on Wall Street."


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## colemj (Jul 10, 2003)

Don0190 said:


> I know that 3 years ago when I got a quote it was 300% more for me to insurance for the caribbean than for Florida and the Gulf of Mexico. Not much logic to that really.


I think that has changed in the recent years. Three years ago, we paid less to be in FL than the Caribe, but two years ago, our company moved that line up to the FL/GA border. Now FL is the same as the Caribe.

The Caribe has taken it on the chin with hurricanes recently, but FL has just been lucky - many extremely close calls narrowly averted at the last minute, with one recent large hurricane sparing total destruction of the state only by following a narrow, unlikely path through it and missing most populated and coastal areas. The Gulf side has had recent catastrophic hurricanes, not including Katrina.

So I wouldn't put FL or the Gulf in a different hurricane risk assessment than the Caribe. Particularly since the insurance exposure is much higher for FL/GOM.

Mark


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## SanderO (Jul 12, 2007)

colemj said:


> I think that has changed in the recent years. Three years ago, we paid less to be in FL than the Caribe, but two years ago, our company moved that line up to the FL/GA border. Now FL is the same as the Caribe.
> 
> The Caribe has taken it on the chin with hurricanes recently, but FL has just been lucky - many extremely close calls narrowly averted at the last minute, with one recent large hurricane sparing total destruction of the state only by following a narrow, unlikely path through it and missing most populated and coastal areas. The Gulf side has had recent catastrophic hurricanes, not including Katrina.
> 
> ...


right...

Let's charge customers based on random weather related damages last year!... Canes are costly. We got that.


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## Don L (Aug 8, 2008)

colemj said:


> So I wouldn't put FL or the Gulf in a different hurricane risk assessment than the Caribe. Particularly since the insurance exposure is much higher for FL/GOM.
> 
> Mark


I'm sitting here right now in Gulfport MS with covered comp insurance that is basically the same price as I was paying 3 years ago in the Northeast. It was 300% more for insurance to go to the caribbean.

That's a fact for me with no guessing involved.


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## MikeOReilly (Apr 12, 2010)

Don0190 said:


> maybe it just falls into the "because they can" world of logic
> 
> they don't need the caribbean boat business and so if they get some they make it really worth it for them
> 
> I know that 3 years ago when I got a quote it was 300% more for me to insurance for the caribbean than for Florida and the Gulf of Mexico. Not much logic to that really.


I think you're right Don. They charge what the market will bear, just like any other business. Your example is similar to mine and Arcb's. Same region, nearly the same boat, quite different premiums.

BTW, I've never been given any discounts for experience or training. I specifically tried this a few times. I was told all the courses and certificates and years don't matter. Maybe this is how it works up here, with my risk pool, I dunno. But again, it is a fact.


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## colemj (Jul 10, 2003)

SanderO said:


> right...
> 
> Let's charge customers based on random weather related damages last year!... Canes are costly. We got that.


Are you proposing they charge based on future damages in the coming year? I don't think they have a crystal ball.

Mark


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## SanderO (Jul 12, 2007)

colemj said:


> Are you proposing they charge based on future damages in the coming year? I don't think they have a crystal ball.
> 
> Mark


Mark I haven't thought about this. I would prefer a model with less profits in there.


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## colemj (Jul 10, 2003)

SanderO said:


> Mark I haven't thought about this. I would prefer a model with less profits in there.


I'm not sure anyone has shown that the marine insurance business is highly profitable. It's a fact that many companies have pulled out of the marine business entirely. Another fact is that many companies have dropped certain boats and cruising area categories. Since many companies are publicly traded, we do get to see their balance sheets, and many of them have been reporting losses in the marine category for the past couple of years.

None of that seems to point to egregious profitability to me.

It may be that high insurance prices, with more restrictive terms, now results in a normal profit margin for a company.

I don't know, but there are data suggesting this business is not as highly profitable, or as customer antagonistic, or as seedy, or as arbitrary as some are making them to be.

Mark


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## outbound (Dec 3, 2012)

Mark you seem to like to tell me what has happened in my life never occurred. Find this quite unacceptable. Apparently others in this thread have had the same occurrence. You’re back on the ignore this. Took 1/2 a day. Shorter than last time. Good work. Have a nice time.
Btw I ve gotten the discounts mentioned above.


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## Arcb (Aug 13, 2016)

I don't see any reason its unreasonable for insurance to require 3 persons on a 45+ ft boat on an offshore passage of 24 hours or more.

In the commercial world there is a formula used to calculate minimum safe manning numbers. 

The matrix does not just assume routine watchkeeping, on an easy passage. It works on the assumption the boat has to be able to continue safe navigation in an emergency situation; fire, flooding, man overboard etc. When you start taking crew away from the watch keeping cycle to control flooding, launch life rafts or deal with a fire, 3 is not a lot of people, especially in the kind of prolonged emergency one might encounter offshore.


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## Donna_F (Nov 7, 2005)

outbound said:


> ...
> The OCC definition is to determine who can join. There are many peoples of all ages in that group. My understanding is very few are members of any traditional yacht club as there's no benefit to being in one as you wander around. As with all groups like this the administration is dust farters but the membership seems to be a pretty active sailing group. ...


Oh dear. John and I are OCC full members. Note to self: Don't volunteer to be a part of the administration once we start farting dust. :wink

Anyone can join at an associate member level. Only those who have done the 1500 non-stop can be "full" members.

What made us eligible for OCC membership was crewing on other boats as a way of determining if we even like crossing oceans before we buy our next boat, which is what we intend to do with it. I have some long passage goals that John is happily on board with. The first crossing as crew and a subsequent trip also reinforced my choice of our next boat (NOT the boats we were on). What made me decide to join was the wealth of information available from a huge number of people who are doing what we want to do.

I guess I don't think about the cruise v. passage terminology as much when I do my research. If what I'm reading about or the person I'm listening to fits what I want to do, it doesn't matter whether someone considers it "cruising" or "passagemaking."


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## outbound (Dec 3, 2012)

So far I’ve used simple judgement on this. If I have a newbie I take 4 otherwise take 3. If its going home(north bound, with the trades and Gulf Stream) during the spring. it’s usually a easier trip so less strict about prior experience and their having sailed with me before. If going south in the fall getting the east in is harder as is likelihood of weather so want the best crew possible. In short unlike a ship there’s a huge variance in crew skills and personalities that’s largely unknown to the captain regardless of details of vetting, resumes, and recommendations. Know crew I’d be happy to double hand with and know I’m better prepared and safer than on other occasions having 4 aboard. Most cruising boats can be easily run by one. Speaking in the 40-60’ range. Single hand on routine watches. Even with mechanical failure or severe weather 2 skilled people’s suffice. I try to be set up that one suffices. Bad weather and hurt or sick or tired out goes the jsd. I’m not racing. I no longer single this transit solely due to risk of injury leaving me at risk. 
Still I object to formulaic thinking. Rather approach each situation on its merits and with logic. IV rejected crew and accepted crew on short notice either due to that crew being not at their best (‘flu or other illness, family obligations etc.). Policy requires each member be vetted by the insurance company. This may cause me to lose a weather window or Present difficulties as I already cleared/ paid my bill or other things. Judgment about crew and transit should be left to the captain. If he screws up it should be on him/her. If he has a tract record and hasn’t screwed up should be left alone. My last insurance company (before pantaenius) left crew decisions to me. They didn’t require that they vet them nor the number required. I’m no great shakes, not a rock star, but think a middle of the road cruiser. Given their own life and their own boat is at risk think that’s sufficient motivation to do the right thing. Think the captain/owner is in a better position to judge than an actuary looking at a resume having never met the prospective crew.


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## colemj (Jul 10, 2003)

outbound said:


> Mark you seem to like to tell me what has happened in my life never occurred. Find this quite unacceptable. Apparently others in this thread have had the same occurrence. You're back on the ignore this. Took 1/2 a day. Shorter than last time. Good work. Have a nice time.
> Btw I ve gotten the discounts mentioned above.


Not sure where I've ever said your experiences never happened. Not sure where I've ever said that about others.

I've tried to be engaging in this thread, and have only tried to debate relevant points.

Mark


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## Calmwater (Aug 5, 2018)

Interesting how the discussion navigated from sailing/cruising/passage making terminology - that to my opinion is just an individual preference to insurance - indeed a globally painful matter. 

I had the questionable pleasure to shop for an offshore insurance this year, to cover a $100K in value cruising boat (certified and built to Loyd’s specs) docked in St. Lucia and going through a major refit - mostly on the hard and fully on the hard between July and November. A nightmare.:

• my usual US carriers didn’t understand what I was talking about. Other US brokers made so many restrictions that made the overall insurance offer quite worthless. 
- the former German owners had a worldwide liability only coverage for a premium of 285 Euros a year! - from the most prestigious carrier group in the world. 
- Quotes in the Caribbean were ridiculously inflated at $5,000-8,000 for a comprehensive coverage. They refused to offer a liability only policy. 

So eventually had no choice and register the boat in the Netherlands and get the insurance policy In Europe at a cost ranged between 700 Euros for liability and medical for the crew/guests and captain/owner to approx 1800 Euros for a comprehensive full coverage. 

My analysis is that US cruisers are, in fact, forced to subsidize millions of inshore high risk motor boaters liability cases in one end and for the hurricane season disasters - almost 100% for boats docked/moored/on the hard in the high risk zones - on the full value of their boats at the other end of the pond. — both ends here are unrelated to offshore or even coastal cruisers. Especially as insurers require you to move the boat down to Grenada or up to the US during the hurricanes season. 

I was able to find a solution based on my personal situation, dual citizenship etc. Mike mentioned very reasonable rates in Canada, but the US market overall insurance situation makes no sense as far as I can understand when it comes to sailors/cruisers.


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## outbound (Dec 3, 2012)

Spot on Calm. That’s reality!!! 

Had a $8000 jump in premium from pantaenius US so in process of changing to a different company. So far had a unnecessary survey done to justify hull value pissing away hundreds and will get less effective insurance for a little more money than last year. 

Storm plan is ridiculous. On my own have always done a steel cradle as I don’t trust jackstands. And straps to concrete blocks at each cleat. Pantaenius required straps every 10 ft. I’ve always examined my boat every other week or after any significant storm. Insurance requires yacht management and storm plan from the yard. 

Like you looked into international insurance. There’s a company in Grenada called Netherlands. It’s local. There are a few others. Unfortunately from talking with other cruisers have come to believe you’re best off dealing with a company chartered in the same country you’re flagged in. I’ve never had a claim but lead to understand if you do it makes things easier.


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## Minnewaska (Feb 21, 2010)

This must be an interesting reality. Only those with expensive hulls seem to bother to insure hull value. Therefore, not many, the significant minority. A small pool is trying to cover a big loss potential.


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## MikeOReilly (Apr 12, 2010)

Calmwater said:


> ...My analysis is that US cruisers are, in fact, forced to subsidize millions of inshore high risk motor boaters liability cases in one end and for the hurricane season disasters - almost 100% for boats docked/moored/on the hard in the high risk zones - on the full value of their boats at the other end of the pond. - both ends here are unrelated to offshore or even coastal cruisers. Especially as insurers require you to move the boat down to Grenada or up to the US during the hurricanes season.
> 
> I was able to find a solution based on my personal situation, dual citizenship etc. Mike mentioned very reasonable rates in Canada, but the US market overall insurance situation makes no sense as far as I can understand when it comes to sailors/cruisers.


Completely agree, and I've been pointing out this fact for a long time that we (people who travel on cruiser-level boats) face very low risk. Despite this, some of us are facing steeply rising insurance rates, and perhaps even more insidious, more restrictive and prescriptive limitations on where and how we can sail.

Insurance is a product that pools risk. Low-risk folks always "subsidize" higher risk people. But when the burden become egregious, people start to speak with their wallets. I mentioned the recent CF poll showing a significant shift in the proportion of people going to liability-only policies vs full coverage. IF this is true, it certainly suggests a tipping point may have been reached.

I think Calm's analysis is reasonable. And since insurance risk pools are artificial constructs, one obvious solution is to group these higher-risk boats into their own pools, and have THEM pay the full cost.

Boats that remain docked/moored in hurricane zones should pay the high premium price based on this higher risk. Of course this would mostly be charter fleets. So too with zippy small boats. These boats are far and away the most dangerous craft. Put them in their own pool and let them pay the full price of their risky activities.


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## Calmwater (Aug 5, 2018)

It is a reality prescribed to kill the insurance business of US carriers. This usually means that new, better and smarter carriers will get in. That's what happened to the lousy taxi companies with Uber and insurers deserve no better.

I think sailors here and through CF and other groups should somehow unite and get a better negotiation position - I could expect BoatUS, SailUS etc doing something for us rather than only for the political and business interests but maybe I'm dreaming here.

Boats and risks are not different in Europe but sailors there stay with carriers for all their life rather than shopping each year. And they pay about 10% of the premiums we are asked to pay here.

As for a hull comprehensive insurance - "expensive" is a relative term, losing a $100-120K boat - especially my true love boat ? will be a terrible pain but not a financial disaster - I have my condo docked on the hard across from the boat future wet dock, once bringing her from the Caribbeans next spring. - Yet, I'm not willing to waste 7-8% of the boat's value each year for nothing. I'm aware of the grief clients are experiencing with insurance claims.

Will use that money for better safety gadgets, saving account for my future boat etc. ?



Minnewaska said:


> This must be an interesting reality. Only those with expensive hulls seem to bother to insure hull value. Therefore, not many, the significant minority. A small pool is trying to cover a big loss potential.


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## colemj (Jul 10, 2003)

Calmwater said:


> My analysis is that US cruisers are, in fact, forced to subsidize millions of inshore high risk motor boaters liability cases in one end and for the hurricane season disasters - almost 100% for boats docked/moored/on the hard in the high risk zones - on the full value of their boats at the other end of the pond. - both ends here are unrelated to offshore or even coastal cruisers. Especially as insurers require you to move the boat down to Grenada or up to the US during the hurricanes season.


I've tried to make this point several times. Being a pooled-risk business, with a distribution curve, if one falls outside the standard deviation used to calculate average risk, then one either subsidizes, or is being subsidized by, the majority of the people inside the average risk. If the average risk is high, then average prices are high, and those falling outside the average are paying more for their risk than others.

So if the average risk pool consists of similar boats in similar situations, like possibly in Europe with no hurricanes and few inshore motorboats, then there aren't many falling outside the standard deviations, and those who do aren't being hit as hard as in the US, because the average risk is lower.

The problem is that there is no viable business in finely slicing risk groups up - the pools become too small, particularly at the outlying ends we are complaining about here. Instead, the companies push the average risk in a more profitable direction. This is what is happening now. It is quite possible that we will be dropped by our insurance company this year simply because we want to spend the winter at 23*N instead of 30*N.

There is no denying that US insurance companies are either pulling completely out of the recreational boating market, or are dropping coverage for many boats in what they consider riskier behavior or areas. They would not be doing this if they didn't have good, statistically valid reasons.

Mark


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## colemj (Jul 10, 2003)

MikeOReilly said:


> Boats that remain docked/moored in hurricane zones should pay the high premium price based on this higher risk. Of course this would mostly be charter fleets. So too with zippy small boats. These boats are far and away the most dangerous craft. Put them in their own pool and let them pay the full price of their risky activities.


They pretty much do for hurricane zones. Premiums are very expensive in FL compared to GA, for example - a distance of 20nm between "safe" and "usafe" marinas. For us, it is double, and I've heard triple from others. Sounds like Outbound has also experienced this. Other companies are just refusing to insure within hurricane zones, which is just another form of higher cost for being there. I'm hearing Geico and Pantaenius US are dropping coverage altogether of boats in these areas, or are putting large limitations on hull value and terms.

I don't know about zippy small boats and what they pay relative to others.

So they are essentially in their own pool. The problem is the outliers to that pool - namely safe cruising boats and operators in lower risk, but still hurricane-defined, areas. There is no business viability to slicing this small group out and insuring them separately.

Hopefully Calmwater is correct, and this will open opportunities for more creative and nimble business models to jump in.

Mark


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## Minnewaska (Feb 21, 2010)

Is it true that EU premiums are 10% of US for the same coverage? That sounds exaggerated. 

On the other hand, I’m sure liability and storm claims are lower in the EU.


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