I just returned from the annual Yacht Broker’s Assn of America (YBAA) University session. This is a gathering of yacht brokers and new boat sales people, along with industry experts in various fields. The meeting alternates each year between Newport and Annapolis, this year we were in the latter. The YBAAU is part of the continuing education program we have at YBAA, as continuing education credits are required to maintain one’s Certified Professional Yacht Broker (CPYB) credential.
Why would you care about our meeting? Because we came back with information that may be of interest to some of you. We’ll be sharing the information over the next couple of weeks. First up, a look at the state of the marine insurance market—a hot topic among boat owners.
At the YBAAU, we had an excellent presentation by Bob Peck of Triton Marine Insurance. If you currently own a boat, you almost certainly noticed a sizable increase in your premium this year. That said, marine insurance is not as expensive as most people expect it to be, but the rub is obtaining coverage in the first place. The whole insurance industry took an $118,000,000,000 loss due to Hurricane Ian, and this catastrophic loss had a wide ranging impact across the industry. Four large companies failed, and there are fewer markets for your agent to place your coverage with.
Four main areas the underwriters look for when a customer is looking for insurance are location of use, age of vessel, owner experience, and the “10-foot rule.”
- Florida has become a very difficult place to obtain coverage, and so has the Caribbean. If you can get coverage at all you need a storm plan, along with other stipulations.
- The age of the vessel is also a key criterion, the older the boat the more difficult it is to obtain insurance.
- Owner experience was always an issue, but until recently it was rarely an obstacle to coverage; it was more a pricing factor. Now brokers need to work with their agents to develop a plan to cover new owners who have little to no prior boating experience. A package containing training is usually required.
- Finally the “10-foot rule” means the companies normally do not want an owner to move to a larger boat that is more than 10 feet larger that the one they currently own. A customer who currently has a 17-foot center console runabout is unlikely to get coverage for a 40-foot boat for example. Often they are requiring that a captain be aboard for a specified period of time while the owners gain the requisite skill and experience.
- Other problem insurance risks are liveaboards and houseboats. The larger and more expensive the boat, the more these rules come into play.
- Here at RCR we have been fortunate, through long-established relationships with marine insurance specialists, to get our customers covered but it has not always been quick and easy. Our suggestion is that if you presently have coverage, don’t think of moving to another carrier to save a few bucks, be satisfied that you have a policy.