Now is a great time to buy a boat to go cruising. In fact, it may be about the best time ever. When I put together the recent trawler buyers guide, I was impressed with the many choices of quality boats out there. No matter what style of cruising you intend, from full displacement, extended cruising and living aboard, to quick trips up the coast or to the islands for several days of R&R, boat builders have really stepped up to the widening demands of the marketplace.
The audience for today’s boats is not looking for one type or shape, so we have lots of choices to suit everyone. From the latest outboard technology to state-of-the-art sail handling systems, there is no shortage of available boats for anyone actively seeking a cruising boat.
Downeast cruisers and trawler yachts exist in all sizes and types, and the sailboats range from slippery, vintage designs, to wide-stern speed machines, and let’s not forget the comfort and luxury appointments of today’s catamarans. Walk the docks and what you see is a far cry from years of cookie cutter production boats that only varied in overall length and deck layout. You were able to get a new boat in any color you wanted, as long as you wanted white.
One of the benefits of fiberglass is that these boats last and last. I did a quick survey of what is available in older boats on the used market that were built with quality construction and to proven designs. A pristine Hinckley Bermuda 40 can be found for under $100K but newer models can command an asking price well in excess of $150K, especially if the boat was professionally maintained during its life. Some classy Alden yachts also come to mind, as do Hallberg-Rassy models that please on many levels. The proven Valiant 40 of the late ‘70s is out there for around $85K. Ever popular Catalina and Beneteau production boats of the late ‘90s are priced reasonably well at $100K and $140K.
On the trawler side, things are equally doable for those who can make the numbers work. An older Grand Banks 42 Classic, one of the most successful trawlers ever, can be found under $100K on up. Other popular trawlers, such as the Krogen 42, may go for under $200K, depending on year and condition.
My point is that no matter where along the cruising boat spectrum one’s budget and interest allow, there are boats out there. Deciding on which new boats to buy might be tough, as there are so many things to consider, and almost all are good. It is indeed a great time.
In the past, once the check was written and the many purchase agreements were signed, one simply called their insurance agent, and provided basic information to get a new policy in place. The broker/dealer often facilitated this to keep things as simple as possible. Did you want it documented or state registered? Getting boat insurance was generally easier than booking a slip for next season.
Elvis and the Underwriters Have Left the Building
There are several circumstances that changed the insurance world over the last number of years. The most significant came as a result of many named storms. The impact these storms had on the property insurance industry cannot be overstated. Year after year of serious hurricanes decimated boat insurance companies that once offered low premium policies to just about anyone wanting a boat. Unfortunately, by 2020 many of these companies were gone, leaving only major insurers whose marine coverage represents a small portion of their overall business umbrella.
(Below: Hurricane Ian made things difficult for insurance companies and yacht owners.)
The Atlantic storm season now averages 14 named storms, of which seven are hurricanes and three become major events. Last year, we had eight hurricanes. Two of them were Ian and Fiona.
Hurricane Ian hit Florida near Fort Myers Beach in late September 2022. One hundred and fifty people died, and property damage paid by insurance companies exceeded $113B. Claims for boat and yacht damage was more than one billion dollars.
It doesn’t take much to understand how the claims from such property damage clobbered the nation’s insurance industry. Most of the low premium “boutique” insurance companies disappeared, as did many insurance underwriters and brokers. And the precedent set by the large insurers in their aftermath by raising rates to stay in business rippled down to the small regional insurance companies, who adjusted their own rates accordingly.
In addition to increased premiums, the standards and measures of insurability really tightened up, so anyone looking for a policy now needs to meet strict requirements if they hope to get coverage. If any line item listed in one’s policy is not satisfied, companies have the right to deny a claim. These might include things that are unrelated to storm preparation. If a policy states that the bottom needs to be painted this season, and you decide to forgo it until another year, doom on you. While it may not put your boat in danger, it opens the door to missed policy requirements that can be used to deny a claim.
It goes without saying that if one’s application misrepresents one’s background or information about the boat, or fails to mention the areas one expects to travel, insurance providers have no problem voiding your policy, leaving you out in the cold.
While it may seem unfair for insurance companies to be this picky, or seemingly cherry pick their clients, it is the only way they can remain profitable and survive.
The pandemic also had its impact on the insurance situation. Necessary repairs went undone due to staffing and parts shortages. There remained a tremendous backlog of work for a long time.
Get Used to Constantly Changing Rules
All of the insurance people I spoke with were clear that the rules and demands are an ever-changing landscape for both insurers and boat owners. The factors that impact the insurance model do not stand still, so don’t expect things to stay the same from year to year. What was standard practice two years ago may no longer be acceptable.
A good example of this was when they tried requiring a licensed captain to provide training and serve as the boat’s operator while the new owners gained experience. Contracting a captain for 30 hours on one’s new boat was deemed sufficient to get the new owners up to speed on relevant aspects of vessel management and handling.
(Below: A licensed captain runs this Riva 63 Virtus that's for sale in Fort Lauderdale.)
Everyone agreed it was a good idea, but it did not work out as intended, particularly for those planning to go cruising away from home. Insurance companies received too many damage claims despite this program, even though it seemed a reasonable solution. Boats run by captains stayed local, for the most part, and new owners just didn’t get enough benefits from a captain so there were accidents. Such practice is no longer considered viable by any of the insurance brokers I spoke to.
In addition, having boating experience is no longer the primary requirement it once was. The focus right now is one’s documented history of “prior ownership.” That is more important today.
I admit this might seem somewhat counterintuitive, but it is a valid argument in my opinion. I believe I qualify as an experienced boater by anyone’s standard. I have crossed oceans, survived numerous storms at sea, and successfully navigated many crowded harbors and inland waterways. I’ve also logged thousands of miles as crew on large and small sailboats, trawlers, expedition yachts, and other powerboats.
When I compare my crewing experiences with trips I’ve made on my own boat, I am convinced that being a crew member pales in comparison to the reality faced by the owner of a cruising boat. An owner is ultimately responsible for the safety of the vessel and the lives of everyone. The level of responsibility, focus, and accountability far surpasses the job description of a volunteer crew member. To me, it is night-and-day different.
I once had a long and frank conversation about this with Tony Fleming, as we sat in the salon of his Fleming 65, Venture. We agreed there are important elements of the owner/operator experience that set it apart. There is a constant state of awareness about everything on and around the boat that others are not attuned to.
The owner makes sometimes-tough decisions when dealing with bridges, customs, weather forecasts, schedules, equipment failures, medical emergencies, unexpected personality conflicts, and routing contingencies. The owner is more than just the person who hands over the credit card to pay for meals, fuel, and dockage.
Arriving at a new destination after a successful passage feels glorious to anyone who is on a boat. But for the boat’s owner it is a much richer experience altogether. Owners see the world from their own boats. It is a fabulous and very exclusive experience enjoyed by relatively few.
Can You Qualify for Insurance?
When you work with an experienced broker, they will often find it valuable to see if you qualify for insurance for the kind of boat they are looking for. There is not much point in boat shopping if one isn’t going to be able to get insurance for it. Or is there? More on that in a moment.
Jon Horton, sales manager of the yacht division of Jack Martin & Associates, offers some great advice for those just getting started and looking to move into cruising.
He said that insurers are unlikely to consider insuring boats much larger than 10 feet more than the largest previously owned vessel. So, how best to proceed?
“Start small,” Jon said, and make a plan that spans several years. A good strategy is to buy a small boat, say a 20-footer, and go up in 10-foot increments. The 20-footer leads to a 30-foot boat, then a 40-foot boat. This progression will eventually fulfill the prior ownership requirement.
Horton, whose company works with 18 different insurance carriers, stresses the importance of prior ownership up to a maximum vessel size of about 50 feet. Larger boats are tougher to insure for the average boat owner, but such cases are reviewed on a case-by-case basis.
(Below: Great podcast from 'The Boat Galley' about gaining experience for insurance companies. Tips start at 2m 15s.)
Warren Richter of Boudreau Insurance also highlights this “step up” program as the most reliable way to get one’s foot in the door. Set your sights on a boat that is 20-25 feet long. It will be easier to get insurance, given its limited value. Plan to keep the boat for three to five years and use it locally to gain experience. When it is time to go up in size, find something about 10 feet longer, in the 30-foot range, and enjoy it.
Once you have this experience, you may find that size boat is all you need. But if you continue to desire a larger boat, the step-up approach will get you there.
In today’s world, this is the new normal leading to boat ownership, and there is nothing wrong with that.
Mary LaFleur of ALT Insurance Group in Anacortes, Washington says there have been too many people in their middle years who suddenly decide they want a big boat as their first purchase. It is completely unrealistic, and a savvy broker should do their best to dissuade such accidents waiting to happen.
(I recall one Lake Union boat show when a broker with the Seattle Grand Banks dealer told me he had just met a man in the tech industry who wanted a new Eastbay 49. The fellow had no prior boating experience. The broker learned that he originally wanted to buy an airplane but was told that it required a license, so he was looking at big boats instead. Can you imagine? Mary says this still happens.)
The age of the boat is another factor to consider. Generally, insurers are not interested in vessels older than 20 years, as companies just don’t feel the need to take the risks inherent in older boats. If the boat is truly amazing, such as that fabulous 50-year-old Hinckley Bermuda 40, there may be some effort to obtain a policy, but that is not normal…or a given. One insurance broker told me he sent out a dozen queries to get insurance for an older classic, for a buyer with impeccable experience and outstanding prior ownership history. Only two companies responded with potential policy offers.
So, what does one do if they want to consider an older sailboat or trawler? Don’t despair. Only a small handful of states require boat insurance, which opens up another possibility. If the boat is outside the “comfort zone” of normal boat coverage, it might be worth forgoing traditional insurance. One has to be willing to risk losing the money invested, but the limited value of an older boat may not break the bank.
Several insurance brokers were okay with that direction, and I asked if perhaps getting liability-only coverage was a sensible alternative to be safe. Every broker said not to take the cheapest way out. They insisted a liability-only policy MUST include coverage for wreck removal and pollution containment and cleanup. These expenses can devastate a boat owner if they are not insured. An insurance policy that includes containment and clean up expenses from a fuel or oil spill is very important.
Be aware that liability-only insurance will most likely require a vessel survey, so be prepared for this requirement.
Another consideration is that marinas and boat yards often require proof of insurance for dockage and use of their facilities.
Expect Changes to Continue
One development currently under consideration involves tracking accident data as it pertains to operator age. It seems that some insurance companies are considering the impact and possible restrictions of the age of the operator. Just as there are serious concerns about young and immature boaters getting behind the helm, so are apprehensions regarding the older owner/operator. There has been an increased awareness of accidents caused by boaters in their 70s and beyond. This should not be too much of a surprise, as there is reduced situational awareness associated with an aging boating population.
This research is a relatively new development, and it remains to be seen what will come of it.
If one must find a silver lining in any of this, I offer my hope that recent losses have focused the industry on ensuring only qualified boaters operate on our waterways. A person who is not qualified to operate a boat can cause permanent chaos and destruction in mere seconds. Why are they out there in the first place?
Unfortunately, higher premiums will stay the norm for now, and storms and their severity are not likely to diminish any time soon. We need to develop better storm management strategies. I think we all agree that preparing for these weather events should move from last-minute panic from stormageddon weather forecasting to proven and effective procedures we are trained to follow.
Having attended many seminars and lectures on boat insurance over the years, I feel insurance—and the role of the insurance broker—is largely off the radar screen of most boat owners. There is a lot to learn from this industry and the data and analysis it offers to the rest of the marine community.
So, enjoy these times of great boats, great choices, and fantastic technology. The future is bright and exciting about all the things to see and do in the world. Just don’t ignore the realities of insuring your dream.
Insurance stands ready to protect you and your investment. For now, and hopefully well into your future.
Enjoy these other boating and cruising articles by Bill Parlatore:
- Taking Of The Great Loop
- Preparing For The Great Loop
- Let's Go On The Great Loop!
- Dawn Of The Paperless Helm
- Letting Go But Still In Control
- Learning To Handle A New Boat
- Improving The User Experience
- A Paradigm Shift In Cruising
- Consider Buddy Boating
- A Matter Of Staying Safe While Boating
- Should I Carry A Gun While Cruising?
- A Boater's 3-to-5 Year Plan
- Boat Tools: A 4-Part Series
- Provisioning Your Yacht For Extended Cruising - Bahamas
- Provisioning Your Yacht For Extended Cruising - Alaska
- The Evolution Of The Trawler Yacht