Having boat insurance can offerng piece of mind, however why pay more than you need too?

This column is a bit of a departure from our last several “how-to” articles. However, it is about a subject probably near and dear to your heart: saving your scarce sailing dollars for the good things in sailing that really count, like new sails or hardware.

The insurance policy on our Pearson 10-meter Grit recently came up for renewal. While we expected a modest increase and had budgeted accordingly, what we received was shocking. Our renewal offer weighed in at over $1,200.00 for the annual premium. After thinking about it for a few minutes we decided it had to be an error. After all, the boat was only insured for $25,000 and that premium was almost 5% of the total value. Add the deductible at 3% of hull value and, well, “it just isn’t possible,” we told ourselves. That night we fired off an e-mail to the insurance company and asked them to take a second look.

We began getting a little nervous after a week without any reply. The existing policy only had about a month left to go and we were concerned about a lapse in coverage. We decided we had better follow-up. After a couple of phone messages we received an e-mail stating that “Yes, an error had been made.” Our new quote for a renewal was now only $1,170 for the year, not exactly the savings we were looking for. Frustration now at full throttle, it was time to talk to a live person. We finally connected with a very nice representative from the insurance company. Unfortunately, we quickly discovered that the quote was real. The “problem” we were informed was that our boat was getting old. At 28 she was moving into a much more expensive category. Hanging up the phone, we decided to shop around for competitive quotes. Something had obviously gone wrong with our first choice, because that company advertised that it was the place for “classic yachts.”

The next step on the journey was to fill out an on-line quote request from one of the largest marine insurers. We’d had insurance with them years ago, continued to read generally nice things about them on the SAILjazz e-mail lists and figured they’d be more competitive. Imagine our surprise when our quote from them was actually higher than the original renewal notice. Once again, we put in a phone call to see what was driving our costs so high. Interestingly, one of the key questions was, "who are you presently insuring the boat with?" Paint us skeptics, but that seemed to be a bad sign. It wasn’t hard to imagine a competitive rate chart on the other end of the phone… something like let’s quote $100 less and we’ll be winners!

Initially, we thought we had scored a positive change when they told us that they had mistakenly rated the boat as 38 years old versus 28. Unfortunately, changing the age didn’t produce a significant change in premium. After a long discussion involving lots of back and forth on various combinations of higher deductibles, an agreed value of only $25,000, and limited navigation areas we were finally able to get the premium quote down in the $1,100 range. We asked why the premiums were so high and got the “hurricane” answer. According to the representative, the combination of last year’s hurricane damage and our location in Charleston, SC was driving the premium up. Deciding that we needed a bit more time to think about this, we asked how long the quote was valid. This seemed to produce a stunned response on the other end of the telephone. Our representative was very surprised that we weren’t signing up on the spot.

Getting a survey for GRIT paid for itself and then some!

We remembered that several e-mail forum posters had recently mentioned going to their homeowner’s insurer for affordable coverage on their sailboats. We’ve always followed the conventional wisdom that boat insurance should be purchased from a specialist. At this point, we decided we had nothing to lose so we called our homeowner’s insurance company. We got off to a great start. They immediately transferred our call to their “boating specialist” and we were pleasantly surprised to be speaking with someone who seemed to understand sailboats. After answering some basic questions, he gave us a preliminary quote in the $800 range. Unfortunately, this was for a “Blue Book” value of $18,000, and somewhat below what we felt the boat was worth. He said we could ask for higher coverage but doing that would require a new survey. This was a frustrating development as the boat had been surveyed just 18 months ago. Despite several pleas, and even faxing the old survey in, they wouldn’t consider adjusting the agreed-upon value without a new survey.

Adding up the costs, we decided to get the new survey. While it looked like a draw on the first year, we could at least see savings down the road. There was also the hope that a survey would show our boat was in great shape for her age — perhaps leading to a premium reduction. We contacted several surveyors and, now down to three weeks before our current insurance expired, selected the one who was available on short notice. Talk about lucky choices. We’ve worked with several surveyors in the past and none were more professional or responsive than Bob Turner from Noyce and Associates. Bob turned the survey around in three days, even offering to fax a copy to the insurance company for us.

Saving a few bucks and having a happy crew makes for a good day!

In short order we received a series of questions from the insurance company. Did we plan to race the boat? Would we fix the three recommended items? Imagine our shock when the agent gave us a final premium quote of $480 per year. Suspecting that something had to be wrong, we asked them to send a copy of the policy so we could review it. A close examination established that the policy was superior to the both the insurance we had, and to the other quote we had received. There were no limits on the navigation area, the coverage was otherwise identical and the agreed-upon value was higher. Needless to say, we executed the policy that day!

In fairness, we have to say that we’re not insurance professionals. We don’t pretend to understand exactly how an insurer determines the premium for a specific risk. Nor do we fully appreciate the marine insurance industry’s current trials and tribulations. We do know we’re very pleased that we took the time to explore other options. Including the cost of the survey, we saved almost $300 this year. If everything stays equal, our savings will almost double next year, as a survey won’t be required. Those savings can be put towards continuing our upgrades and that’s a happy thought. If you’re not happy with your premium then perhaps it’s time for you to explore other options.

Reference:
Bob Turner, Marine Surveyor
Robert A. Noyce & Associates
843-327-9189 (Charleston, SC)