Recent Changes in Marine Insurance Underwriting

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    As with most industries, the marine-insurance market has seen some changes in recent years, the result of both mainstream technology and the sluggish economy. In our research for this report, we noted a few worth sharing.

    ◀ Credit history: When evaluating a boat for a new policy, underwriters study a number of related factors—the boat owner’s and operators’ age and experience; boat type (sailboat owners have typically enjoyed lower premiums than powerboat owners, according to Global Marine Insurance’s Mike Smith); safety gear onboard; prior insurance claims; and the owner’s driving record and criminal history—but we were surprised to learn that now, some underwriters are also scrutinizing an owner’s credit history. However, a standard credit score and your credit-based insurance score are not the same. Credit-based insurance scores use certain elements of a person’s credit history to predict how likely the consumer is to have an insurance loss, as research shows there is a correlation between credit characteristics and insurance losses. When you get a quote for marine insurance, ask whether the underwriter is using credit-based insurance scores.

    ◀ Insuring in the digital age: It is possible to purchase boat insurance over the Internet without talking to anyone, but we don’t recommend it. Instead, use the Internet to do preliminary policy shopping. We found many of the providers’ websites extremely user-friendly, and quotes are delivered instantaneously in many instances.

    ◀ Marina disclaimers: The sluggish economy has put a sharper focus on the bottom line, and marinas are understandably trying to keep costs down. Increasingly, marina contracts include phrases such as, “The boat owner fully agrees and releases the marina from any liability for loss or damage to the boat, under any circumstance, including any negligent acts or omissions by the marina or its personnel.” Clauses like these shield marinas and their insurers from having to pay settlements for losses and damages. We recommend carefully reviewing the language in your marina contract and discussing this with your marine insurance agent.

    Darrell Nicholson
    Practical Sailor has been independently testing and reporting on sailboats and sailing gear for more than 50 years. Supported entirely by subscribers, Practical Sailor accepts no advertising. Its independent tests are carried out by experienced sailors and marine industry professionals dedicated to providing objective evaluation and reporting about boats, gear, and the skills required to cross oceans. Practical Sailor is edited by Darrell Nicholson, a long-time liveaboard sailor and trans-Pacific cruiser who has been director of Belvoir Media Group's marine division since 2005. He holds a U.S. Coast Guard 100-ton Master license, has logged tens of thousands of miles in three oceans, and has skippered everything from pilot boats to day charter cats. His weekly blog Inside Practical Sailor offers an inside look at current research and gear tests at Practical Sailor, while his award-winning column,"Rhumb Lines," tracks boating trends and reflects upon the sailing life. He sails a Sparkman & Stephens-designed Yankee 30 out of St. Petersburg, Florida. You can reach him by email at practicalsailor@belvoir.com.