Marine insurance, of course, is how the whole concept of insurance first got started. Hedging against the potential loss of a vessel and its cargo is a financial game that dates back to the ancient Greeks and was institutionalized in its modern form in the 17th century in Edward Lloyd’s famous coffee house in London, where skippers and merchants gathered together to mull the perils of the sea while getting hopped up on caffeine. As such, marine insurance played an important role in the development of our global economy, but in the context of bluewater cruising it is another animal entirely.
After all, what is it exactly that an insurance company sells you? The answer, plain and simple, is fear. When you buy a policy what you’re doing is making a bet that your own vessel will sink, because you’re afraid it will. This may be a smart move when you need to protect a big commercial investment, but when you’re talking about a boat you sail with friends and family, it has to me always seemed inappropriate. Bad luck. Almost evil, frankly.
When I first went offshore in my old yawl, Crazy Horse, I looked into buying some bluewater insurance and the only quote I got was ludicrously high—$3,600 a year to cover a boat I’d bought for only $28,000. This was in the mid-1990s, back when I could live on my boat and cruise full-time for only $10,000 a year. I did just that for over two years without any insurance at all and earned enough not paying premiums to stay out cruising for many extra months.
Back in those days, however, no one ever asked if you had insurance. Now most marinas and boatyards require it and often insist on seeing proof of coverage. Some people I know solve this problem by simply forging insurance certificates, which isn’t hard to do. All you need is a computer and a printer. Others I’ve met buy common coastal policies, so they have an honest piece of paper to display, but then “self-insure” when they go offshore, which they neglect to mention to the foreign marinas and boatyards they visit.
When I first bought Lunacy 10 years ago I purchased a policy that cost $2,000 a year, this for a boat for which I’d paid $115,000, which seemed reasonable. When I took her south for the winter they wrote me an endorsement for the Caribbean, for which they charged an extra $1,300, and also pestered me with forms and spurious requirements regarding the passage there. Over the years these premiums steadily increased, though the pestering never decreased, and when my annual “fear payment” (as I think of it) topped $5,000 before any offshore endorsements were factored in, I knew it was time to go shopping.
I soon realized how badly I was being gouged. Friends with boats similar to mine were paying less than $2,000 a year for coastal coverage. But getting a new policy that would allow for a trip to the Caribbean wasn’t easy. As was the case with Crazy Horse, it seems Lunacy is too old and cheap to be of interest to many bluewater insurers.
For a while, I was thinking I’d have to become a forger myself. I told one broker all I really wanted was coastal coverage while in New England and the Caribbean, with exclusions for the passages back and forth. He told me no insurer would ever agree to that. Which seemed crazy to me. I started thinking maybe I should cancel my policy, sail down south, buy another policy in the Caribbean and then cancel that before sailing north again.
In the end, however, I found a fantastic policy from a small company, Seaworthy Insurance, for just $2,700 a year, including offshore and Caribbean coverage, with no hoops to jump through when making passages. I thought I had died and gone to heaven. The only problem is my dream insurer just got bought by a much bigger one, Geico, and now I’m crossing my fingers hoping my fear-factor nightmare isn’t about to start all over again.
SAIL’s Cruising Editor, Charles J. Doane, sails his Tanton 39 on the Maine coast and down in the West Indies whenever he gets the chance. He is the author of The Modern Cruising Sailboat, published by International Marine, and is a contributing blogger at SAILfeed.com