{"id":138036,"date":"2022-04-13T08:30:57","date_gmt":"2022-04-13T07:30:57","guid":{"rendered":"https:\/\/www.yachtingworld.com\/?p=138036"},"modified":"2022-04-13T08:44:02","modified_gmt":"2022-04-13T07:44:02","slug":"bluewater-cruising-insurance","status":"publish","type":"post","link":"https:\/\/www.yachtingworld.com\/features\/bluewater-cruising-insurance-138036","title":{"rendered":"Bluewater cruising insurance \u2013 what you need to know"},"content":"There\u2019s no getting around the fact it has become a lot harder to get boat insurance, particularly bluewater cruising insurance. However, there are still ways to secure good coverage \u2013 you just need to know what makes insurers tick.\r\n\r\nIf you want to ruin any cruising sailors\u2019 potluck party on a tropical beach, just drop in a question about boat insurance. Many boat owners have stories to tell. Just about every aspect of the process has become more complicated for bluewater cruising insurance, it takes a bigger chunk out of the cruising budget every year and the rising deductibles make it more and more tempting to go uninsured. So, what is going on in the market and how do you get proper insurance to match your cruising plans?\r\n

How bluewater cruising insurance works<\/h2>\r\nFirst, let\u2019s look at who you are dealing with when you try to get your yacht insured for a trip to the Med, the Caribbean or a circumnavigation.\r\n\r\nThe insurance company covers your yacht: they write the cheque when there are damages to it or when you\u2019ve caused damage. All this depends on the conditions that you agreed to when taking the policy, but in general, you don\u2019t deal with the insurance company directly when you try to get insurance for a bluewater itinerary. Unlike car insurance, boat insurance is a very specific product and it requires a tailor made approach. Most likely you\u2019ll do business with a broker or an underwriting agent.\r\n\r\n[caption id=\"attachment_138045\" align=\"alignnone\" width=\"630\"]\"\" Uninsured yacht owners could face enormous salvage, repair and environmental damage costs if the worst should happen. Photo: Ben Welsh Premium\/Alamy[\/caption]\r\n\r\nThe broker considers you, your boat and your plans and presents this \u2018package\u2019 to several insurance companies. A single insurance company may want to insure you, but it could also be a syndicate of insurers: each insurer accepting a certain percentage of the risk presented by your package.\r\n\r\nThere are different kinds of brokers; the difference lies in the amount of work they take off the hands of the insurance companies. If the broker is just helping you to get cover for your beautiful blue water itinerary, you\u2019ll get a policy with the header of the insurance company. If the broker does a lot more work, for instance manning phone lines for 24\/7 assistance and handling of claims, you may find their company name at the top of your policy. Brokers that take the most work off the hands of the insurers are called managing general agents (MGAs).\r\n

What has changed?<\/h2>\r\nWhy has it become more complicated to get yacht insurance for blue water voyages? Mike Wimbridge, managing director of Pantaenius UK, explains: \u201cYacht insurance for offshore itineraries has always been a tailor made market. And we see that, in recent years, there has been less appetite from the insurance companies when it comes to yacht insurance in general. For coastal cruising in UK waters, things are still fairly easy to insure. But for more bespoke risks like insuring a bluewater cruise, we see that the market is nervous.\u201d\r\n\r\nThere are several reasons behind this change, Wimbridge says. \u201cUp until 2017 this was a highly competitive market, so prices were as low as possible. It then became untenable for many insurers, especially when a few big windstorms tore through areas where lots of yachts were stored.\r\n\r\n\u201cInsurance companies and their reinsurance companies pulled out of the market, leaving a few behind who needed to safeguard their financial situation. So the premiums and deductibles rose. Things are stabilising now, but we still see slight increases annually.\u201d\r\n\r\nThere are other factors at play. The effects of climate change mean extreme weather events happen more often.\r\n\r\n[caption id=\"attachment_138048\" align=\"alignnone\" width=\"630\"]\"\" Sailing off the beaten track can be challenging to insure. Photo: Janneke Kuysters[\/caption]\r\n\r\nThe typical consumer profile has also changed. In the past, yacht owners usually set off on passage armed with sextants, paper charts and a wealth of experience. Nowadays it has become a lot easier to get started \u2013 thanks to everything from computer-based navigation systems to powered sail handling \u2013 so owners can set off on a bluewater cruise with less experience.\r\n\r\nAt the same time, boats have become larger and potential claims more expensive: a single lightning strike can destroy tens of thousands of pounds worth of electronics, so it's perhaps understandable insurers can be nervous to write bespoke policies.\r\n\r\nHowever, there are signs that the market is rebalancing. Ric De Cristofano, director of underwriting with Topsail Insurance, says: \u201cThe good news is that the insurance market is cyclical: it will bounce back. I think we have the worst time behind us and we\u2019ll see that insurers become more open to write policies for bluewater cruising yachts.\u201d\r\n

How to get bluewater cruising insurance<\/h2>\r\nIf you are looking for insurance for a bluewater itinerary, Wimbridge says, \u201cGetting a quote is getting harder and harder. You have to \u2018pitch\u2019 yourself, your boat and your plans to the insurer. The broker can help you to do this or you can select a carrier that has staff on hand who are experienced in this area. Things like your sailing CV, diplomas and those of your crew, previous long passages that you have successfully undertaken, and technical or managerial skills that will benefit your sailing, are very important to mention.\r\n\r\n\u201cWhen it comes to the boat: the more seaworthy, the better. There is no real threshold when it comes to boat value, but a well found yacht that is suitable for offshore cruising is paramount to get insurance.\"\r\n\r\n\u201cWe have added a maintenance log to our \u2018pitch\u2019 to get insurance,\u201d say American cruisers Jason and Nicky Wynn (see gonewiththewynns.com). \"This has added to the success of securing insurance for our boat.\u201d Keep receipts and take photographs as proof of upgrades and repairs, and record a log of routine maintenance.\r\n\r\n\u201cThe third element in your \u2018pitch\u2019 is your itinerary,\u201d continues Wimbridge. \u201cThe Atlantic and Pacific are well-cruised areas where insurers can assess the risk they are writing. But if you're heading around Cape Horn or further afield in the Indian Ocean, premiums will rise. So with your choice of itinerary you can influence the height of your premium and insurance conditions.\u201d\r\n\r\n[caption id=\"attachment_138047\" align=\"alignnone\" width=\"630\"]\"\" Hurricane damaged yacht. Photo: Pantaenius[\/caption]\r\n\r\nIn general, insurers are not keen to cover your yacht if you sail in areas with a cyclone\/hurricane risk. They have predefined areas and dates which are important to adhere to if you want to stay insured. You will also have a very hard time finding insurance to sail in areas with political instability, war or threats of terrorism. War Risk zones are internationally acknowledged areas where even large commercial ships pay breathtaking insurance premiums.\r\n\r\nDe Cristofano adds: \u201cStart looking for an insurer at least six months before you plan to leave. Have a chat with your broker to see if they will be able to find insurers that will cover your itinerary. Give yourself ample time to put your \u2018pitch\u2019 together and to discuss possible alternatives with your insurer that will lead to a policy that fits your budget.\r\n\r\n\u201cIt pays to negotiate about the deductible: if you are willing to accept a higher deductible, this may make a significant difference in the premium you will be paying, because it signals to the insurer that you have confidence in your yacht and your skills to maintain it properly.\u201d\r\n\r\nHowever, Wimbridge warns: \u201cPrice is not all; think of insurance as a partnership with the insurer. The cheapest policy may not do what you need it to do when you are in trouble on the other side of the planet. You need an insurer who has the knowledge and the capacity to get help to you where you are: spare parts, technical assistance or even worst case, salvage. A lot of the cheaper insurance options will require hiring a third party provider locally, which may present all sorts of cultural and language barriers. So look at the quality of the policy.\u201d\r\n

Real world solutions<\/h2>\r\nBill Garlick is a well known name in the cruising community: many boat owners who have sailed to the other side of the world and run into trouble with their insurance get help from Bill at The Marina Shop in Opua, New Zealand.\r\n\r\n\u201cThe marine insurance market had a monumental dislocation at the end of 2018 when many Lloyds pleasure craft syndicates closed their books,\u201d Garlick explains. \u201cThe lost capacity created a worldwide shortage of marine insurance for pleasure craft. Cover was difficult to find and premiums started rising. Around 95% of our clients were insured with Lloyds at the end of 2018 and those now with Lloyds can be counted on one hand. A number of insurers stepped in to fill the abyss which meant brokers and clients had to deal with new policy wordings and cruising parameters. By the end of 2019 most clients were placed with new insurers.\r\n\r\n[caption id=\"attachment_138043\" align=\"alignnone\" width=\"630\"]\"\" Keeping a log of regular maintenance can be helpful. Photo: Janneke Kuysters[\/caption]\r\n\r\n\u201cA consequence of the contracting market is that marine insurers have tighter criteria and marine insurance is more difficult to secure. Older (30 years-plus), smaller (under 40ft) and low value boats (less than US$100,000) are difficult and sometimes impossible to insure. Standing rigging must be no more than 10 years old (a rig inspection and report is no longer acceptable), surveys are generally required when an insurer takes on a new risk unless the vessel is a relatively new factory production model.\u201d\r\n\r\nHe adds: \u201cRegistration is now the key factor in securing marine insurance. Many insurers are not registered in all countries\/jurisdictions so they can only offer cover to certain flags. Choosing a flag is now the decision that determines which \u2013 if any \u2013 insurers can offer terms.\u201d\r\n\r\nClaudia Masson, CEO of the specialised German yacht insurance broker Preuss, says Brexit has also had an impact on European brokers: \u201cSince Brexit, it is no longer possible for us to insure a UK registered yacht with a UK owner. We\u2019ve had to cancel all the policies of our UK clients; this has limited the amount of alternatives there are for UK boat owners.\u201d\r\n\r\n\u201cLightning, windstorm and saltwater damage to electronics and electrical systems are problematic,\u201d adds Garlick. \u201cMany marine insurers simply refuse to offer cover for these risks and others mitigate their exposure by offering high excesses\/deductibles.\u201d\r\n

Go uninsured?<\/h2>\r\nEvery year a number of cruising yacht owners decide to sail uninsured. There are several reasons for this, but usually it's because of budget constraints or simply because they cannot find an insurer.\r\n\r\nBut there are considerable risks to going uninsured. First of all, some countries will not let you enter or leave without at least liability insurance \u2013 Panama being one example. The same applies to most harbours or marinas.\r\n\r\nBut the most important thing to consider when you sail uninsured is whether you can afford to lose your boat and equipment. Would being uninsured likely change your behaviour \u2013 would it make you less likely to issue a Mayday? In the case that you hit a reef, could you finance the cost of salvage and repairing environmental damage? Or the liability if you accidentally hit another yacht or a swimmer in the water?\r\n\r\n\"If you are considering sailing uninsured, there are insurers in the UK that will accept yachts for just the liability insurance,\u201d says Ric De Cristofano of Topsail Insurance.\r\n\r\n
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There\u2019s no getting around the fact it has become a lot harder to get boat insurance, particularly bluewater cruising insurance. However, there are still ways to secure good coverage \u2013 you just need to know what makes insurers tick. If you want to ruin any cruising sailors\u2019 potluck party on a tropical beach, just drop in a question about boat insurance. Many boat owners have stories to tell. Just about every aspect of the process has become more complicated for bluewater cruising insurance, it takes a bigger chunk out of the cruising budget every year and the rising deductibles make it more and more tempting to go uninsured. So, what is going on in the market and how do you get proper insurance to match your cruising plans? How bluewater cruising insurance works First, let\u2019s look at who you are dealing with when you try to get your yacht insured for a trip to the Med, the Caribbean or a circumnavigation. The insurance company covers your yacht: they write the cheque when there are damages to it or when you\u2019ve caused damage. All this depends on the conditions that you agreed to when taking the policy, but in general, you don\u2019t deal with the insurance company directly when you try to get insurance for a bluewater itinerary. Unlike car insurance, boat insurance is a very specific product and it requires a tailor made approach. Most likely you\u2019ll do business with a broker or an underwriting agent. The broker considers you, your boat and your plans and presents this \u2018package\u2019 to several insurance companies. A single insurance company may want to insure you, but it could also be a syndicate of insurers: each insurer accepting a certain percentage of the risk presented by your package. There are different kinds of brokers; the difference lies in the amount of work they take off the hands of the insurance companies. If the broker is just helping you to get cover for your beautiful blue water itinerary, you\u2019ll get a policy with the header of the insurance company. If the broker does a lot more work, for instance manning phone lines for 24\/7 assistance and handling of claims, you may find their company name at the top of your policy. Brokers that take the most work off the hands of the insurers are called managing general agents (MGAs). What has changed? Why has it become more complicated to get yacht insurance for blue water voyages? Mike Wimbridge, managing director of Pantaenius UK, explains: \u201cYacht insurance for offshore itineraries has always been a tailor made market. And we see that, in recent years, there has been less appetite from the insurance companies when it comes to yacht insurance in general. For coastal cruising in UK waters, things are still fairly easy to insure. But for more bespoke risks like insuring a bluewater cruise, we see that the market is nervous.\u201d There are several reasons behind this change, Wimbridge says. \u201cUp until 2017 this was a …Continue reading »<\/a><\/p>\n","protected":false},"author":447,"featured_media":138042,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[767,140],"tags":[1499,836,1633],"review_manufacturer":[],"acf":[],"introduction":null,"_links":{"self":[{"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/posts\/138036"}],"collection":[{"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/users\/447"}],"replies":[{"embeddable":true,"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/comments?post=138036"}],"version-history":[{"count":6,"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/posts\/138036\/revisions"}],"predecessor-version":[{"id":138059,"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/posts\/138036\/revisions\/138059"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/media\/138042"}],"wp:attachment":[{"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/media?parent=138036"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/categories?post=138036"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/tags?post=138036"},{"taxonomy":"review_manufacturer","embeddable":true,"href":"https:\/\/www.yachtingworld.com\/wp-json\/wp\/v2\/review_manufacturer?post=138036"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}