Quite the frustrating ride we have with insurance. I suspect a lot of the issues come from the basic assumptions of the insurance business. It is about spreading risk between a large pool of more or less similar customers. Some customers are percieved to present a bit higher risk, and they pay more, and lower risk customers pay a bit less. In theory, the (Cost per unit of Risk) is as close to a constant as the actuaries can calculate it.
Then along comes a boat like Harmonie. They ask us some questions, and they don’t quite know what to do with our answers.
- “What is your Home Port? Where do you keep your boat?” No one place, we travel all the time.
- “What will you do if you are in the path of a large storm?” That greatly depends on where we are.
- “Where do you live?” On the boat.
It’s not that NOBODY does these things, but very few people do, and the data set that is available calculating risk is actually quite small.
We have gotten a lot of advice from many people. Some of it very helpful, some… not. Frequently the advice consists of “my policy is really cheap, you should check it out.” So far, we have yet to find a “really cheap” policy that meets even our basic needs, but if one does happen to turn up, we’ll be all over it!
Several companies we talked to were based in the UK or Down Under, and had no interest in an American flagged vessel in American home waters.
Several companies had policy language that was unacceptable to us, especially around “latent defect,” and “inherent vice” losses. Some did not handle depreciation issues around repairs in a fashion we thought was reasonable.
Of the few that survived this far down the weeding out process, it became clear that the “home port” issues were going to be a big stumbling block. Basically, you tell the insurance company that in the event of a “named storm” your boat will be located at your home port, and secured exactly as you described in your storm plan. They use that information to develop the risk and cost of the policy.
If you are NOT in your home port and suffer damage during a named storm, your policy is not valid–so sorry! The way around this is to tell the insurance company every time you are in the path of a storm where you are, and your detailed storm plan, and hope that is acceptable to them, maybe with a rate modification. This is a very different consideration than the allowed “cruising range” in the policy.
We also found that most were “coastal” policies with coverage limited to less than 200 miles offshore.
In the end, working down the check lists for what we wanted, there was ONE policy still in the running. The Jackline Policy from the Gowrie Group. The coverage wording was mostly what we were looking for. It has true world-wide coverage. With a few reasonable limitations, we can go anywhere. There is no home port issue to fret over. They also offered the kind of general liability coverage that most people get through a homeowner’s policy, which is very hard to come by from other venders. This insurance program has been around for many years, catering to the few boats who do exactly what we do.
On the downside, it is expensive. We went from 2.5% of hull value for a limited cruising area to over 4% for worldwide. You get what you pay for.
Of course the REAL measure of any insurance company is how they handle claims. We hope we never find out…