This month, Joe Kolisch at USI Florida answers a few questions, providing information for down-island owners and cruisers. As with our previous contributions from expert, all of his comments are general and directed toward owners of private pleasure yachts –commercial boat owners and/or operators should contact their boat insurance representatives for information specifically for them. Additionally, Premium Finance gives us a brief rundown on the how and where of financing insurance premiums – good to know when working up a budget!

The process of obtaining boat insurance does not have to be a daunting one. Break the process into steps, ask questions along the way, and don’t be afraid to comparison shop. In an effort to make your task easier, I have summarized and listed below the common threads running through all of the remarks from our experts.

• Educate yourself. The knowledgeable boater is not only a better boat insurance risk than the uneducated one, he or she – as well as the crew, vessel and other boaters – will be safer on the water. There is no excuse for failing to obtain information in any way you can – from free boating courses, books, the Internet and experienced boaters.
• Do your homework! Utilize the various resources presented in this series to help you understand boat insurance terms, requirements and cost. “The more extensive a man’s knowledge . . . the greater will be his power of knowing what to do.” Benjamin Disraeli, British statesman and author (1804-1881).
• Locate and do business with a reputable insurer, one that understands the needs of boaters and that has done business in the Caribbean. Don’t be afraid to ask for references.
• Work with your boat insurance agent to make certain that all of your specific needs are addressed by the terms of your policy. A “blanket policy†is not optimal; if you are offered one, keep shopping.
• When you choose a boat insurance provider, make certain that you understand the terms and limitations of your policy. Read the fine print! If you don’t understand your policy, ask for an explanation. If you don’t get a satisfactory one, again – keep shopping.
• The purchase of a policy does not end your relationship with your agent – continue to communicate! Report changes in your cruising destination, boating habits and education level. Always report any accidents, even if they seem insignificant at the time.
• Keep records of and receipts for all work done to your boat – including upgrades, repairs and routine maintenance. Your boat insurance representative may need them in the event of a claim.
• Do everything you can to prevent the loss of your vessel – make a hurricane plan, theft-proof – as much as possible – your boat and dinghy, and have electrical systems, rigging, through-hulls, engines, etc. regularly inspected.

Next month: Budgeting: Monthly Storage … Finding it and paying for it.

Ask the Expert Section:

Joe Kolisch Yacht / Watercraft Insurance USI Southeast 201 Alhambra Circle, Suite 600 Coral Gables, FL 33134 Direct phone: 305-357-2053 and 800-516-5292 Fax: 610-537-9627 Mobile phone: 305-992-3482 E-mail: joe.kolisch@usi.biz

1. Why does boat insurance cost so much?

Boat insurance costs by company are based on the risk factor. Boat Insurance is “Property ” insurance based on results, loss ratios of an insurance company and an insurance and cost of re insurance (insurance company purchase of insurance for catastrophic loss). Results in recent years have not been as profitable in windstorm areas such as the Caribbean and Coastal areas.

2. What are requirements to qualify for boat insurance?

There are two factors: The first is the boat: boats over 20 years require current acceptable out of water surveys. Some vessels that may be excluded from coverage are tri-hulls, Ferro-cement, carbon fiber, high-speed boats, race boats, and boats in need of repair or that are not seaworthy. The second factor is the Owner/Operator: Unacceptable risks can be the following: An owner with a more than two recent losses, and owner with no or little boating experience (underwriters would require a Captain to be command).

3. Would down-island boat owners run into any special difficulties when trying to obtain insurance?

Generally, the fact that a boat owner is down-island should not present a problem. Exceptions could be locations such as Cuba, Colombia and Haiti. In some cases, some Underwriters look more favorably upon a non-US Flag owner and vessel due to reasons of liability.

4. What about US owners/citizens cruising down- island (South of the Bahamas)?

Normally, US insurers will not provide coverage in the Caribbean. Some underwriters might provide Caribbean navigation, but not during storm season. The other option is obtain a quote from the UK Yacht Insurance market (Lloyds and other English Underwriters).

5. Do you have any general insurance information for boat owners?

For windstorm deductible, apply normally double or higher on partial and total losses, and note that older vessels have higher rates than new boats. Not everything on your boat may be covered – there are exclusions and general conditions. You have to understand what is covered, what is excluded, and how losses are paid. Your agent/underwriters should be willing to answer your questions or allow you to review a sample policy.

Premium Finance Company

Premiums for boat insurance can be financed through your insurance agent. When you purchase coverage, your agent can offer on-the-spot financing. There is no need to contact a finance company ahead of your insurance purchase, or even contact them directly – your insurance company should take care of all aspects of financing your premium. We offer premium financing in the USVI, BVI, Anguilla, St. Maarten (Dutch side only), Antigua, Dominica, St. Lucia, St. Vincent, Grenada, Providenciales, Turks and Caicos Islands and Grand Cayman.

NOTE FROM JSW: If you are a boat owner, former owner, boat broker, boatyard owner, marine store owner/worker or have experience with any other aspect of boating – insurance, haul-outs, financing, marinas … you name it – and would like to share some of your experience, I would like to hear from you. Please send your comments, and a picture of you, your boat or your business logo, to me via e-mail at SummerVI@earthlink.net. Please include your business name, website and other pertinent information. I reserve the right to edit remarks and will submit as many as I can to the publisher, who reserves the right to do even more editing.

Top Surfing Spots

http://www.geico.com/boat/about.htm – This company sells insurance, as well as offers a very general explanation of what boat insurance is. The best thing about this site is their link to a long list of definitions of insurance terms; understanding insurance terminology will help you understand your policy.

http://www.insurexchange.com/glossary/premiumfinance.htm – This site offers a long list of boat insurance companies. Each name is accompanied by a small info blurb and a link to the company’s website. Overwhelming at first glance, but great for shopping and price comparisons.

http://www.insurexchange.com/glossary/premiumfinance.htm – Offers a glossary of premium finance terms, as well as a search tool for company ratings.

http://www.saga.co.uk/finance/boat/ – An interesting UK site. The company offers insurance in all areas, and not just for boats – you can get insurance for your sailboard! Best about this site is their “Comprehensive Guide for Protecting Your Boat†that is offered in PDF format. The policy booklet is also available in PDF format.

http://www.boatus.com/seaworthy/default.asp – Published quarterly by the BoatUS Marine Insurance Damage Avoidance Program, articles from this magazine are available online. The articles are geared toward loss prevention. The detailed descriptions – in the magazine as well as in editor Bob Adriance’s book – Essential Lessons from BoatUS’s 20-Year Case File of Things Gone Wrong – of how and why boats have been lost should scare the hell out of any sane boater.

Boat Buying Tutorial

Guide Tips for Buying a Boat

J. Summer Westman took an in-depth study into How To Buy a Boat. I think it is a tour that each of us in the Marine Industry needs a refresher every now and then – especially before you buy or sell your next boat. These same lessons are valuable for sail boats or power boats.

• Part 1 – How will I use my boat?
• Part 2 – What do I really want
• Top Five Buying Tips for Boat Insurance
• Tips on What to Consider When Buying Boat Insurance
• Why does Boat Insurance Cost So Much?
• Steps to Follow When Buying Boat Insurance
• Part 6 – The Budget: Slip Fees and Hurricane Storage
• Part 7 – The Budget: Maintenance Fees and Other Costs
• Part 8 – How to Find Your Boat
• Part 9 – The Art of Negotiation
• Part 10 – Brokers, Lawyers and Contracts! Oh My!
• Part 11 – Survey and Sea Trial
• Part 12 – Transporting your Boat

Here is a handy list of Boat Brokers in the Caribbean