What is the most important question you can ask? Why don't most people ask it?

How much hull insurance do I need on my boat?

How much liability (Protection & Indemnity) insurance do I need?

What does uninsured boaters cover?

What's wrong with an Actual Cash Value policy?

Why do I need a survey, and how often is it required?

What are navigation limits and cruising endorsements?

Is it safe to insure with a foreign insurance company?

What is typically covered under towing expenses?

How do I obtain coverage for my boat if I charter it?

Is my boat covered if I ship it overland?

Are my dinghy, outboard, and jet skis covered?

How long is the grace period for non-payment of premium?

What is the most important question you can ask? Why don't most people ask it?

"How do I know the insurance company will pay if I have a loss?" is the most important question any owner can ask -- yet almost none of them do. The answer is that there is no way to guarantee that the company will pay a claim. Scary, isn't it? Before you run for the door, there are some important indicators every owner should check before they choose an insurance policy.

First and foremost is the quality of the insurance carrier you and your agent choose. All insurance carriers are rated by three companies who analyze each company's financial strength and their ability to pay claims. These companies are: A.M. Best, Standard & Poors, and Moody's.  The fine companies we use and their individual ratings are listed on this website. Just click on "Our Carriers" to check their ratings.

Also, all professional Marine Insurance Agents should carry their own liability coverage, more commonly called Errors and Omissions Insurance (E & O). This covers the agent in the event he makes a mistake and your loss is not covered by the insurance carrier. Unfortunately many Marine Insurance salespeople and brokers don't carry E & O because it is expensive. The question no owner ever asks, but should, is "How much E & O insurance do you carry, Mr. Agent?" If the answer is "None." find another agent. A professional one.

Remember, there is a lot more to consider when choosing a marine insurance policy than price alone.

How much hull insurance do I need on my boat?

We recommend a value that represents the lowest dollar amount (within reason) that you would be "comfortable" with if you suffered a total loss. Here are some points to consider:

• Total losses are infrequent events.

• Partial losses are the most common claims.

• The maximum insured value is normally the market value on the vessel survey.

• Your deductible is a percentage of the insured value, so a lower insured value not only reduces your out-of-pocket cost on a partial loss but also minimizes the total premium you would pay.

• A reasonable choice for the insured value is usually the purchase price, plus or minus a little.

Call us with any questions you have. Our professional marine insurance risk management counselors will assist you in your decision. We can custom tailor coverage to fit your lifestyle.

How much liability (P & I) insurance do I need?

Ideally a value that is more than the total of all bodily injury and property damage combined that you might be legally obligated to pay in the event of a loss. A good crystal ball comes in very handy when trying to determine this figure!

Here are some points to consider:

• Most marinas require a minimum of $300,000. Our advice is to purchase a minimum of $500,000. The increased cost is minimal.

• It is common to at least match the P & I (liability) limit with the value of the vessel.

• A common mistake is to match your net worth to your liability limit. The key is to purchase enough coverage so that any probable accident or occurrence will not exceed this amount.

• A personal liability umbrella policy may be an appropriate way to cover yourself for this risk.

This is always a difficult decision. Please call us for any help you might need in determining your P & I limit.

What does uninsured boaters cover?

No, this does not cover your boat. It covers your guests in the event they are injured by a boater who does not have marine insurance coverage -- and is at fault.  Very few uninsured boater claims are made. Your liability coverage is primarily used to pay most medical claims.

What's wrong with an Actual Cash Value policy?

Most agents and brokers recommend against this type of policy. We believe that this type of marine insurance policy has its place. Typically it costs much less than an Agreed Value policy.

This is the main reason many agents and brokers don't like to sell it. It pays them less commissions!

In reality, marine insurance policies written on boats over ten years old contain much of the same language and restrictions as an Actual Cash Value policy.

For example; the endorsements on a policy for a ten year old boat state that most of the electronics and machinery will be depreciated, not replaced with new items. Therefore the policy holder receives an Actual Cash Value coverage at an Agreed Value price. Not very cost effective.

Our recommendation for boats between ten and twenty years old is to at least consider the Actual Cash Value marine insurance policy. You could save a surprising amount without sacrificing coverage. Give us a call to compare.

Why do I need a survey, and how often is it required?

Surveys are necessary to prove the condition and value to the underwriters. The values of the same type of vessels can vary substantially. This is due in part to differences in condition as well as equipment, electronics, and engine options. A well-kept vessel is obviously worth more than one that has been neglected.. Only a marine insurance survey can determine these differences. The surveyor is the eyes of the underwriter.

The "shelf life" of a marine insurance survey is usually three years. Some older wooden vessels may require more frequent inspections. In any case, a competent marine surveyor is also an insurance policy of sorts. He can often find a problem before it becomes an accident. 

What are navigation limits and cruising endorsements?

Most marine insurance policies provide a cruising territorial limit -- an area that you must stay within for your coverage to remain in force. If you want to travel outside your navigational limits you must obtain prior written permission from the insurance company. Usually there is only a minimal additional charge and a short questionnaire that must be completed prior to leaving. Oversea Insurance can provide worldwide coverage for any vessel on any ocean. 
 

Is it safe to insure with a foreign insurance company?

Yes. In fact we often write insurance with some London based companies for those risks that the domestic carriers cannot write, such as unusual navigation limits and certain mega-yachts. If there is a problem with foreign carriers it will usually arise during a disputed claim. If you live in the USA it is much easier to deal with a USA based insurance company than one located in a foreign country.

In our many, many years of experience we have never paid a claim! Just kidding. We included that to see if anybody reads this stuff!

However, we have experienced some slow claims payments from certain foreign syndicates -- but we also have never had a claim denied. Certainly some are better than others, and as such we try to place the special risks with those syndicates. If your risk is a standard one, and your vessel is moored in the USA, you might be better served to use a domestic carrier. They usually will offer quicker claims response and good customer service.

What is typically covered under towing?

This is intended to cover incidental towing and miscellaneous services. If a meaningful covered claim takes place, the towing costs are part of the larger claim and not limited to the towing limits.

How do I obtain coverage for my boat if I charter it?

It depends on which marine insurance policy you currently have and how much chartering you will do. Many companies only require a simple endorsement if the frequency of the charters is small. If you plan on chartering your boat on a regular basis, you might need to replace your current policy with one that covers commercial charters.

Charter boat coverage can be confusing at best. You should consult a marine insurance specialist to ensure that you are covered. Give us a call or fill in the on-line quote.

Is my boat covered if I ship it overland?

The language on many marine insurance policies in regards to overland shipping is vague at best. Always call your insurance broker to verify coverage before the move. We have yet to find a trucker that didn't say they were fully insured.

The problem is they often are not.

Do not rely on a trucker's representation alone! Their policies usually don't cover cargo for damage caused by "Acts of God". Don't take a chance with your boat. Call us for clarification or for a specific endorsement for the move.

Are my dinghy, outboard, or jet skis covered?

Depending on the underwriter of your policy these items may not be automatically covered. To be safe, call us so that we can check to see if they are specifically endorsed in your policy. The additional cost is minimal and the frequency of loss is much higher than losses from other claims.

How long is the grace period?

Unlike some other forms of insurance, there is usually NO GRACE PERIOD in marine insurance. Each underwriter is different. DO NOT RELY ON ANY GRACE PERIOD. Please call us for any clarification.

OVERSEA BOAT INSURANCE AGENCY, INC.
MARINE INSURANCE FAQS