Self Insure, anybody do it?

[rustybucket]

Ok, so I've been wanting to do this for the last 3 boats, but the wife has been dead set against it. I'm the wild creative, she is the sensible accountant.

The idea kinda goes like this. We get a full coverage quote with fishing tackle/gear included. Rather than taking out the policy we put that amount of money (possibly a little more) into a secure savings account each year. We then take out a large liability policy on the boat to protect us against lawsuits and any collisions...etc

The first 10 years or so we are REALLY exposed, very small partial insure, then after that it becomes a more legitimate full coverage policy.

As a disclaimer, we pay cash for all our toys, nothing is financed except the house and automobiles (daily drivers only). If the boat and everything in it dissapeared tomorrow without any insurance, sure it would be hard to stomach, but life would go on.

My goal would be to build a 'toy' self insure slush fund over the years. Where eventually, if no claims were pulled from it, we would be completley covered in the event of a total loss.

The numbers look a little like this
$500k Liability with medical coverage = $350/yr
Total Coverage insurance policy approx = $4k/yr

Am I crazy? Honestly i just REALLY hate paying insurance premiums.

 

[Finalee]

How do the numbers look to you if the boat sinks year 2 ?
Or say it's destroyed in a storm year 8?

You may be crazy.

 

[racclarkson@gmail.com]

People or companies that self-insure have the cash reserves onhand on the front end. What your talking about is gambling. But it's your neck.

 

[rustybucket]

How do the numbers look to you if the boat sinks year 2 ?
Or say it's destroyed in a storm year 8?

You may be crazy.

Yeah, there is definitely a gap there where we are upside down if anything happens. If we upped the premiums some by year 10 we could be even.

We have a pretty sharp hurricane plan, so the chances of a storm getting us are fairly slim. The more likely catastrophic event for us is probably fire or sinking at the dock

 

[rustybucket]

People or companies that self-insure have the cash reserves onhand on the front end. What your talking about is gambling. But it's your neck.

Eh, really all insurance is a gamble. The insurance company is the house and you are betting that you are going to have a catastrophic failure and they are going to take the loss.

I'm not knocking insurance, it is a VERY important part of our society and we carry full coverage on our home and vehicles. And I would never have a boat without liability/medical.

That being said, I'm not a gambling man. Hate it. lol.

 

[jrbrein]

The marina where I dock my boat requires that I carry insurance and they want a copy of the Declarations page. I can understand why.

High deductable insurance with a lower insured amount would work for me to save money on insurance.

 

[Boatsb]

It's required at most marinas to have liability and pollution coverage. That's about $4 to 600 a year. After that it's your call. Without having a note on the boat you can save but be prepared to be boatless should ssomething bad occur.

As for full coverage. My quote years ago was over 10% of the boats value per year with additional deductibles for hurricanes making it a poor choice.

 

[racclarkson@gmail.com]

Eh, really all insurance is a gamble. The insurance company is the house and you are betting that you are going to have a catastrophic failure and they are going to take the loss. I'm not knocking insurance, it is a VERY important part of our society and we carry full coverage on our home and vehicles. And I would never have a boat without liability/medical.That being said, I'm not a gambling man. Hate it. lol.

Well there's no doubt your underwriter isn't your friend. But you have legal recourse at least (speaking from experience). Having insurance isn't the issue. The poster wants insurance or he wouldn't have devised his plan. Since he started out asking for advice...Better to insure and work towards a day when one can afford a boat and what comes with it. I also suspect the exigencies of the day might endanger the insurance reserves.

 

[Bugsy]

I don't disagree with the idea of self-insuring. Basically, I am doing that each year when I haul out and store inland for 6 months ( hurricane season). The less you boat, the lower probability of encountering a total loss. And for an older boat, what is going to happen that significantly exceeds the deductible but is less than a total l
loss? In over 30 years, I have had one claim and if I had to carry the burden of that loss personally, my life would not have changed. In that time, I have conservatively paid close to $100,000. in premiums. And let me hasten to add that my coverage is agreed value and I pay approximately $2200. annually for coverage that includes Florida and the Bahamas.

 

[Bugsy]

Sorry...I abbreviated. The last few years, the hull value has been around $150,000. but in years gone by when I had the 48 MY, the hull value was greater asvwas the annual premium.

 

[Tinman]

Self insuring is a good option... except liability...if you can afford a total loss. If you have a good storm/hurricane plan and maintain your boat well chances are you will not lose it. Use the savings to do maintenance for anything that can cause a sinking or fire...that might otherwise be deferred. My experience with wind damage are canvas, bridge enclosures, etc....which are not covered anyway. If you leave your boat unattended in a slip with tall pilings, get a set of Tide Minders... they will hold tight and ride a storm tide without adjusting...plus do real well in a chop. Have had standard dock lines fail in hurricane winds...either fraying or eye splice pulling.

 

[bobk]

As for full coverage. My quote years ago was over 10% of the boats value per year with additional deductibles for hurricanes making it a poor choice.

Ooofff. Mine is at 2%.

Bobk