By Steve Morrell
Hurricanes and Boat Insurance Crisis?
After the big hurricane years of 2004-5, boat insurance skyrocketed, making ownership of a boat in Florida impossible for many. What happened?
Let’s not place all the blame on those two hurricane years. A problem was brewing for many years. I am going to put a lot of it on boat owners who do nothing to prepare their boats for a storm. And let’s not forget the insurance companies. They have reaped the profits from many years of no storms. Now they want to forget those gains.
About the only people who are innocent in all this are the boaters who love their boats and take the time to prepare them for a storm. And this is the group that is going to pay for this.
How many times have you gone down to the marina and seen boats that have no preparations at all for an impending storm? With the canvas and sails still on as though it was going to be a beautiful, calm day? With no extra dock lines or other preparations? How many times have you gone down to the docks after a storm and seen the boats with their sails up—now destroyed—torn from their slips and the docks and perhaps having caused damage to another boat—maybe even yours?
How many people do you know that joke that their best storm protection is making sure their insurance is paid up? Who joke that they need a new sail, or even a new boat?
It’s not so funny now when I hear of sailors who can’t get insurance because of their older boats—even though they were the ones who cared for and prepared them during the last storm? For years, insurance companies have reaped the benefits of high rates and no storms. (Compare them to home insurance cost-to-value ratios.) Now they want high rates as though those storm-free years never happened. There is a bit of a monopoly by insurance companies, so they can pretty much tell us what the prices are.
Insurance companies were lax for many years in paying out, too. How many stories have I heard where they paid out with no questions asked? How many boats were rebuilt that were falling apart before a storm? How many sails got replaced because no one prepared their boat by removing the sails for a storm? Did insurance companies give you better rates if you prepared your boat? Not that I ever heard of.
If we don’t make some changes in the boat insurance world, this will be another way boaters will no longer be able to afford boats. Maybe laws will have to be passed similar to auto insurance to keep the rates down for all. An example is a law passed last year that allowed marinas to put in their contracts that if a boat owner doesn’t prepare his boat for a storm, then the marina will, and they can charge the owner for the work.
How about if insurance companies don’t pay for a new roller furling headsail (or main) if it wasn’t removed before a named storm? Or they don’t pay for a new Bimini or dodger if it was left up? Or the insurance company doesn’t pay for the boat, left with no extra lines for the storm, which destroyed your boat?
And they lower your rates because you did all these things?
This post originally appeared as an editorial in the February 2007 issue of SOUTHWINDS. It has been slightly edited for the website.