I-36 Insurance Options

In early 2005 our members circulated a series of emails on the subject of getting marine insuance for our Islanders. As you will see below, one issue seems to be the age of the boats, and maybe even a reflection of the hit the marine insurance industry took from five hurricanes in Florida and surrounding states in the Fall of 2004.

With over two dozen comments, listed in order from first to last, we've posted a response from insurance broker, and loyal crew aboard fleet champion Peter Szasz' Midnight Sun, Chris Boome, that summarizes many of the issues, and shown it right after Lorraine Hillman's initial request.

If you wish to add your own experience, you can email it to : Webmaster@islander36.org (Please do not email asking for recommendations!!!!)

This is what started it all:

I am Looking for insurance for my 1976 Islander 36. Because of it's age it's not easy. My marina here in Bellingham WA now requires a policy to be in place to have a boat there. Does anyone have any sources for good insurance. I'm in WA., however most companies seem to be out of state any way. Thanks.

Lorraine Hillman, lmhillman@yahoo.com

I am really behind at work these days and don't have time to put together a comprehensive Islander 36 response to all of the issues brought up in the e-mails about insurance, but if you feel this is appropriate, here are a few comments to hopefully help your fellow Islander owners separate the apples and oranges:

As a point of disclosure, besides being a life-long sailor on San Francisco Bay, and sailing with Peter Szasz the last 2 years on Midnight Sun, I have also been an insurance agent for the past 12 years representing Farmers Insurance for home autos, life and yes boats. About 3 years ago I also established a realtionship with Mariner's General Insurance to help them in Northern California. Mariners has been insuring yachts since the mid 1950-s and has offices in California, Seattle and Florida. Mariner's represents several excellent companies so there are very few risks we cannot cover.

In general, Islander 36's (as much as I like them personally) are not very exciting for insurance companies. They are low value older boats. Low value boats can't generate much premium...older boats tend to break things more often (in general). If you find somebody who is willing to do the work to find a specialty company that will look at the class as a whole, you will need to produce statistics. Not letters from owners, but Loss Runs from the various Insurance companies etc. You also need to know that if the program doesn't work, your insurance program will be out the door...(if West marine can't keep a carrier, I doubt 200 Islander 36's will be able to). You must also remember, whoever would put this "group" together for you would be doing it as a labor of love, it is not something that is a money maker for the agent, and probably not for the insurance company.

Regarding the different polices/companies.

West Marine is not in the business anymore because they sold insurance for too cheap of a price without underwriting their book of business well enough, so the company they represented did not want to continue to take losses.

Years ago I worked for Barient Winches and the engineers who designed the stuff for the big boats said we would be way better off to just send the people who wanted a small # 10 winch an envelope with $ 10 in it rather than selling them a winch that we lost $ 20 on.

So, West Marine slid everything over to Boat US (a very good company)...that still sells boat insurance. The Insurance company behind the policies is CNA which is an "A" rated carrier wirh a "Negative" comment (This means the rating company thinks there is a good change the creditworthness of the insurance company will be lowered in the future). Part of the reason is the high loss ratios they are experiencing on small boats. They don't have the big multi million dollar motor yacht market to offset it.

Obviously from reading the e-mails on insurance companies, the comments depended on claim experience. (or with a lack of claim experience, a low rate). The Boat US love fest comments were because they have a very efficient system for doing what the insurance contract says. If the contract says they have to take out depreciation, then they do it. If it says they don't have to take out depreciation, then they won't. One thing I would be worried about with Boat US is that they only represent ONE company, so if they don't keep the COMPANY happy, they have to start looking for somebody else to cover their boats, or they are out of business. (Boat US has not always represented CNA...these things do change).

There seems to be a lot of confusion about the "Auto Compnaies" boat policies and the true yacht policies.

Basically, the auto companies are good:

1) If you need Liability insurance for your marina and don't want to haul the boat out and get a survey. If you ask your homeowner's insurance company to insure your Islander 36 for LIABILITY only and name the Marina as additional insured, it should cost about $ 60-70- per year for $ 300,000 of coverage. No survey required.

2) If you want physical damage coverage, as you have noted in your e-mails, many times the auto companies will cover them. Their policies (with the exception of the Farmers yacht policy) are generally Actual Cash Value policies which means that the insurance company tells you how much your boat is worth AFTER it sinks. These policies usually also REPAIR the boats with a deduction for depreciation (hence the depreciation being taken for the guy who had propeller damage). ( Allstate does have a "replacement cost endorsement that will take care of repairs without depreciation, but the policy is still lacking for a total loss.) Every company has little differences and the unfortunate part is that many of the agents for the auto companies don't have a clue about boats.

(Note regarding Progressive: They do have an Agreed value Option and they do offer a Liability only policy, but as you know, they slam the door when the boat gets to be 25 years old...age discrimination is legal with yacht insurance).

Just the other day I had a guy who needed liability only insurance for his 1970's Columbia 23...I told him he could get it from the State Farm Agent who handled his condo policy...his State Farm agent told him 2 times it is not covered...so I finally told him exactly what part of the policy would cover it and where to fnd it in the policy...the State Farm agent apologized profusely. State Farm is a good company and the agent is probably a good agent who just never took time to read the fine print about boats.

You must remember that the companies are not trying to cheat you, they are just doing what is said in the insurance contract.

Earlier I mentioned that Farmers was different from the other auto companies....Farmers used to have the same type of policy as State Farm but Farmers was purchased by Zurich a few years ago which has an excellent and very competitive "yacht policy". The exact same policy is offered by brokers (Zurich Policy) and by Farmers Agents (Mid-Century Insurance).

Regarding agent intervention, if there is a problem, you certainly would like an agent to go to bat for you. This of course means the agent must have the inclination AND the knowledge to do so. But remember, the agent will never get the comapny to do something that's not in the contract, but a good agent should ALWAYS be able to tell you what part of the contract does or does not cover the issue.

Another advantage of having an agent who knows the marine business is when you may decide to do something special like the Ba Ha Ha or the Pacific Cup...PLEASE NOTE: if you plan on these types of events, you really need to discuss this with your agent as soon as possible. A change of companies might be required. A survey may be required (including fixing whatever the surveyor suggests) also, there are companies that will not take an older small valued boat just before a big trip etc, but if you have been a client for a few years, you might be able to get the endorsement exception.

So, now you decide you want a true "yacht" policy which gives you an "Agreed value" policy.

Some advantages of an agreed value policy:

1) If the boat is a total loss, you get the amount the boat is insured for (without deductible in most cases).

2) In the event of a total loss, many agreed value policies will pay for the boat at policy limits AND allow the same amount for "slavage"...(this has nothing to with towing)...but if your boat is washed up on Baker Beach, you not only lose the boat, but you are required to clean the mess up which can be very expensive.

3) most items are repaired at "replacement cost" (no deduction for depreciation)...sails, canvas items and engines over ten years old are always an exception (so, if you re-power, be sure to give your agent the details).

4) Regarding PRICING on Agreed value policies...on boats like the Islander 36, there quite frankly is a big difference. Remember, a lot of companies don't want to insure boats over 20 or 25 years old and they would all rather insure 3 new motoryachts (total value $ 4, million) than 100 Islander 36's ($ 4,000,000 at $ 40,000 each).

So, why not just shop around all the time? Again, with the older boats, survey requirements will be more stringent, so you might have to get a new survey a year or two earlier than otherwise, which would defeat the purpose. Also, as I said before, you do get more "clout" for certain exceptions when you are with a company for a while.

Right now, Zurich and Farmers are very competitive for an excellent product. 2 years ago, Travelers was REALLY competitive, now, they are getting up there in some cases.

It is amazing to me all of the comments that have been written about the price of insurance while speaking of policies that are completely different. It's actually kind of funny how many times someone will call because they just received a "giant" increase in premium and they announce that they are "shopping" for a better "deal"...only to find out their premium is $ 395.

People always worry about the price of the insurance before they have a claim. On March 26, 2004, my younger son totalled my car. By all rights he and his passenger should have been severely injured and or killed. After I got "the call" and I knew they were both alive, as I was walking to the scene I was struck by 2 things:

1) I never knew our town had so many emergency vehicles with so many flashing lights.
2) I was relieved that I had really good auto liability coverage limits including an extra $ 1,000,000 Umbrella Liability policy...I was not thinking about the cost of my insurance, I was just glad I did not have to worry about losing my home because my 17 year old kid screwed up.

My suggestion is to find an agent that you trust and you like working with and listen to what he says. Tell him your plans so that he can run through some of the "what ifs" before you are even aware there might be a problem on the horizon. Think about how you run your business as compared to how you shop for your Islander 36 insurance. Do you have long term relationships that you have built up with people you can count on, or do you throw those out the window to save a hundred bucks?

I hope a few things in here help clarify the insurance issue for you.

See you on the race course!!

Chris Boome
Chris Boome Insurance Agency
License # 0A99058
1004 Oak Grove Avenue
Burlingame, CA 94010
Phone: 650-373-0595
Fax: 650-548-1585
web: www.chrisboome.com

I had the same problem. I went through McGinnis Insurance Services, Dave Sneary. He got me a policy with Zurich Insurance Company. His telephone number is 800-486-4008. E-mail is mcginnisins@aol.com.

Jim Higdon, jbhigdon@townsend.com

I bought my I36 in Gig Harbour, WA (near Tacoma), and after a time, brought it down to the SF Bay Area. I have been insured by Boat US/West Marine the whole time. I am very happy with them.

Robert Aston, astonr@ix.netcom.com
Pegasus in SF, 2/25/05

Or you can call Carolyn at the same agency - she just wrote my policy on my 1974 Islander.

Frank Burkhart, islandgi@ix.netcom.com

I have a 1971 Islander 36 and I'm insured with BOAT US. I think they initially required a marine survey within the previous 12-24 months when I signed up with them. Seems like a good policy with better geographic coverage and cheaper than what I had previously.

Ralph Greenwood, RGrnwd@aol.com
Tranquility, 2/26/05

We switched to West Marine about 2 years ago. They've now sold that to INAMAR Recreational Marine Insurance. They seem to be pretty good. They did require a survey before providing coverage on our 1982 Islander36, Mischief.

Charles Hodgkins, charles@sailingmischief.com
Alameda, CA, 2/27/05

BoatUS did offer to insure us without a survey, provided we filled out a comprehensive "Self Survey" form.

Hank, hank.williams@us.army.mil
I36 Night Train, 2/27/05

Almost a year ago now I had the same issue when the West Marine program fired the old and hired a new underwriter (INAMAR). The new underwriter changed my annual rate from $520. to $1,169. for no reason what-so-ever. They just sent me the bill upon renewal.

When I spoke to a senior manager on the phone, after a lengthy conversation he finally admitted that there wasn't any mistake but that they actually don't care to insure older boats! That the only reason they even offered a rate to WM's former customers' upon policy renewal without question, was that that was part of their takeover agreement with WM, that they would continue to service the old customers from St. Paul. Believe it or not he even got into points about the fact that they are such a large marine insurer of privately owned vessels, their losses due to hurricanes along the south eastern states and gulf region are profound and they defer all the costs over their entire customer base in premiums.

Unfortunately Randy (or his people I guess) didn't think to cover the pricing part of it.... I spoke to WM about it and they did say they'd heard of the problem but there wasn't anything they were aware of at the time which was going to correct the issue.

In the end I found great success with Boat U.S.. I learned that while they are in fact owned by WM, there are still sections of the business which are run separately. Insurance was one of them (that was almost a year ago so I hope that hasn't changed). Their insurance people (can't recall underwriter name just at the moment) offered me a policy and kindly accepted an in the water survey based on Moriah being a well cared for boat. The annual premium for $300,000.,etc..is now $480..! That's a lower cost than what I had originally paid with WM/St. Paul.

Ashley Trewman, Atrewman@legacytsi.com
Moriah, 2/28/05

I suspect that the explanation for boat US insurance still working well is that the insurance industry is regulated, and buying one's only real competition is not allowed in that industry. Too bad the marine supply business is now a virtual monopoly -- we have only just begun to pay for this fact.

I was told by the rude person at West Marine Insurance that they don't want to insure older boats. For me, this is enough reason for all Islander owners to look elsewhere. If they haven't screwed you yet, your turn will come. Fortunately, you don't need to deal with these people at all.

I ended up with AAA. No survey, no muss, no fuss, no insults on the phone. I have AAA car insurance, and that helps the rate a bit, if you have a homeowner's or renter's policy, you can get both liability (what the marina wants) and hull insurance for the boat added as a rider to it. So try your homeowner's/ renter's insurance carrier, and if they can't help, maybe you need a new policy.

Michael Daley, michaeld@pon.net
Laughing Matter, 2/28/05

I am currently insured with BoatUS and have been for the last 8 years. This year they raised the premium about 20%, so looked around for other coverage. Contacted AAA as they have my auto and homeowner coverage. They informed me that they don't insure boats over 26'. However they did refer me to another insurer. The other insurer wasn't interested due to the age of the boat (1978).

I decided that BoatUS wasn't so bad after all and renewed with them. Annual premium was $580 for declared value of $46K. From all of the info passed under this thread it seems BoatUS is THE company to go with.

Jim Joubert, jwjoub@earthlink.net
Mon Ami, 2/28/05

Hmm, I'm paying $700 for $40,000 agreed value and 300k liability on a '72, through Mariner's General. Been with 'em for 16 years. The carrier presently is INAMAR.

Mark Wyatt, markbwyatt@ricochet.com

Jim (Joubert),

When was this? AAA recently renewed my 1971 with no increase -- but I don't have the rate handy. Maybe your agent wasn't trying very hard. If we all compare our rates, we may learn a few things.

Is there any chance of our getting a group rate as an organization??

Michael Daley, michaeld@pon.net
Laughing Matter, 3/1/05

(To: Michael Daley)

My insurance is underwritten by Zurich through McGinnis. For a declared value of $45,000.00, and with a 6 month old out of water survey, the premium is $786. Since my Dad had Blockbuster insured at around $680 I didn't figure the increase was too bad.

When I called West Marine, where he insured it, they told me their "25 year" rule (Blockbuster is a '78). I checked with AAA (where I have my auto insurance) by e-mail and they told me they didn't provide such insurance.

I agree, there is good evidence that we should all try to get together on this for a group rate. But so far BoatUS sounds like the best.

Jim Higdon, jbhigdon@townsend.com
Blockbuster, 3/1/05

With all this interest in Insurance, why not invite Chris Boom to give us an update?? Spring meeting, or Encinal cruise??

He is an I36 sailor and an expert on the subject.

Peter Szasz, pszasz@att.net
Midnight Sun, 3/1/05

I've been insured with Allstate for several years now at $300 per year. They don't go looking for boats to insure but if you ask they will give you a quote.

Jim Garrison, jimleegarrison@yahoo.com
Raspberry Tart, 3/1/05

I also have been using Allstate for years. My 1980 is insured for $60,000, boat equipment $6000, liability $500,000, Medical $5000. / person with $250 deductible. Total yearly cost, $274.00

Harry Farrell, PACHIGH@aol.com
Pacific High, 3/1/05

I just paid my premium for my '78 Islander from Allstate for $270/yr.

Jeff Mezzetta, jmezzetta@mezzetta.com
Eye Level, 3/1/05

These Allstate prices seem very low. Can anybody tell me if they are the typical marine insurance all-risk, agreed-value type policies, or are they the car-like actual-cash-value type policy?

Heaven forbid, if the boat ever gets converted completely to a "liquid asset" that point becomes very important!

Mike Bennett, mbennett@astrosociety.org
Freeport 36 Getaway, 3/1/05

In the 1990's I was a part owner of a Santana 30 insured through BoatUS. During a race we did a little dredging with our keel, resulting in just under $5,000 in damage. The claims process could not have been better. The boatyard wanted to open the keel-hull joint to check for hidden damage and BoatUS' claims department authorized them to start right away. At the time, the boatyard had several BoatUS insured boats being repaired there, all of which were being handled by the same surveyor (who was apparently "down there all the time"). I called BoatUS back and asked them to assign our case to him (which they were happy to do). Our boat was repaired (complete with a professionally faired keel) back in the water, and the claim paid in full in record time. The only impact on our insurance rate was that we lost our 10% "never had a claim" discount for one year (after one claim-free year, they reinstated the discount).

When I was shopping for insurance for our I-36 in 2000, there were some less expensive companies than BoatUS (some were significantly less). Before deciding, I paid the boatyard manager a visit and asked his opinion of some of the companies, based on their experiences with them. He said that the best companies were the ones that specialize in boat insurance (with BoatUS on top) and the worse ones were those primarily in other lines (like auto and homeowners). He said that in some cases, the companies would actually send auto claims adjusters/appraisers instead of marine surveyors. He cited one example in which an adjuster tried to approve less than the full amount of the repair by depreciating the propeller.

Even my agreed value, full replacement policy from BoatUS has a depreciation clause (for things like sails, outdrives, gel coat, etc.). Fortunately, it appears that their claims department and the surveyors they use are reasonable enough to understand that a 20 year old boat still needs to be repaired with new materials (and at current labor rates).

My BoatUS policy is underwritten by CNA Insurance. It seems, however, that they handle their own underwriting and claims. I suspect that BoatUS policies are generally more expensive than other carriers (who knows better than them the financial impact of hurricanes on boats?). Nevertheless, I think the added peace of mind is worth the extra expense. Also, it's nice to be able to deal with an insurance company that understands that it's possible for a 25 year old boat to be just as seaworthy as a 5 year old one (if not more so).

Cliff Cohen, cscohen@iconn.net
Latitude, 3/1/05

I have been reading this thread with interest. Comparing premiums is much the same as comparing apples and oranges. Without comparing coverages, comparing premiums is useless.

Inorder to have proper coverage you need a "marine policy" many non marine policies do not cover salvage and with out salvage coverage a simple tow off the rocks can become a financial disaster. Here on the great lakes many unscrupulous towing companies are using the marine salvage laws to sieze boats.

Marine laws do not come under the normal court system. I would agree with the suggestion to have someone come and speak on the subject at your spring meeting. It would be well worth while. I have gone to Progressive only because my old policy was not a marine policy.

Jeff Crosby, islander77taboo@yahoo.com
Taboo, 3/2/05

OK -- I'll join the dialogue on this most interesting subject.

I use State Farm, and have for 12 yrs. Since 1999 my premium has remained fixed at $570/yr. This is net of a $64 diesel discount. Coverage is $45,000 -- $500 deductible -- $500,000 liability.

As suggested by others, it is essentially automobile type coverage, not marine. The reason I use State Farm is that all my cars, house and a sizeable umbrella policy are with them. The Umbrella would not apply to the boat unless they carry the boat insurance. My concern has always been less the hull which is relatively small in value vs the potential liability of someone falling overboard and drowning.

I do think Peter's suggestion of having an "expert" discuss the subject with us a good one!

Don Henderson, henderkin@comcast.net
Kindred Spirits, 3/2/05

Allstate does indeed sell insurance at a very good rate, but you have a boat that is 25 years old, like about 90% of our fleet seems to be, forget it. If you have established boat insurance then they will keep you on, but no new policies. This was all as per my Allstate agent.

I sent an e-mail to Bloome, as suggested by Peter Szasz, but have not been replied to as of yet.

Smokey, sailsolace@netzero.com
Evanescense, 3/2/05

I would venture to guess that if all the members of the list decided to go with say "Progressive", there might be a volume discount. We all know that Islander owners rarely make a claim, and keep their boats in excellent condition. Right?

Larry Gotch, BrendanG@aol.com

I took the lead on the group buy for replacement windows / hatches through Mark Plastics for our group, Noble Brown took the lead for the group on buying ports through Beckson. Which one of you guys wants to be point man on seeing if we can get a "group buy" put together on insurance for Islander owners? We could also tap into the Islander board at Sailnet to possibly increase out numbers.

Also, if you guys on the Left coast do have a guest speaker on the subject, could you take some notes and paraphrase the speech for the rest of us? And/or perhaps putting it in the Islander 36 newsletter?

Hal Newall in MN, Ficadoor@aol.com
Mariah, 3/2/05

I got a clarification of AAA's policy on insuring boats as riders to (CA) homeowner's or renter's policies:

If the boat is over 15 years old (i.e for an Islander), it will need "inspection". What this consists of can vary from photographs to a haulout and survey -- it's up to the inspector.

In my case, although I think originally an inspector was going to come photograph the boat in it's slip, after I talked to my agent and emailed him a series of photos showing the boat inside and out (including the CF number) in the slip as well as sailing, I was approved. I even got a discount on my auto rate -- I guess they figure while I'm busy running the boat into freighters I'm not running the car into guardrails. I think it depends a lot on the agent, too.

He said AAA couldn't do a group rate for us, but that a specialty insurer might be interested. He didn't know of one, however.

I am interested in the differences in coverage, salvage, etc, but don't know enough to say anything about it. I should think a Vessel Assist card would take care of the salvage issues under most circumstances. Opinions?

Michael Daley, michaeld@pon.net
Laughing Matter , 3/3/05

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