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DON'S LOG: stories, experience and advice

NECESSITY FOR INSURANCE


Many sailors go uninsured saying they would rather spend the money installing good equipement, checking it replacing when necessary thus avoiding breakdowns and replacement


Some sailors have done this and spent a life time sailing and never had any problems requirng a large outlay of cash to solve damage or gear failure. The Pardeys are a prime example, twice around the world in two different boats, both engineless yet no problems.They were skillful but also lucky, read the below five stories.


November 8 1984 Charlotte Amalie harbor was crowded with yachts assembling for the VI Charter Boat Show.


The wind was blowing hard out of the south. Hurricane Klaus was forming south of Puerto Rico and heading east rather than the normal westerly the course of all hurricanes that had in the past formed in the eastern caribbean. Since 185i all hurricanes in the eastern caribbean had tracked west or north of west.


One exceptiono Alice, dec30 1954 formed just north of Margarita, tracked NW until 15 n, then made a 90 degree turned NE passing just north of St Kitts and off into the Atlantic, but almost no one, except Don Street, knew of that hurricane.


I knew of Alice but had forgotten about Alice and was completely suprised when anchored on the north side of St Martin I realize the hurricane was coming east. This I realize would make our nice anchorage under the lee of St Martin a deadly lee shore anchorage.


Iolaire survived using six of her seven anchors, see  SURVIVING KLAUS


A cruise ship arrived off St Thomas, it was obviously too rough for the pilot boat to come alongside and deliver on the pilot on board. The ship called the pilot office requesting permission to enter without a pilot. Permission was granted,( it has never been ascertained who gave the permission, but the " permission granted" was heard by many on VHF). The cruise ship entered, turned east to come alongside West Indian Company dock only ro discover that her thrusters could nor overcome the force of the beam wind. She drifted down onto anchored yachts before she was able to back down and reverse out of the harbor.


A number of yachts were damaged. The insured ones had their damage repaired and were re imbursed by the insurance companies who went after the cruise ship and cruise ship line for repayment. Some underwriters /insurance companies paid the damaged yachts their repair costs in full, others paid costs less the excess /deductible.


The uninsured boats received nothing. The cruise ship and cruise line denied liability. The only recourse for uninsured boats was to hire an admiralty lawyer and start legal action. However Admiralty lawyers are not allowed to take on cases on contingency basis. It is strictly cash. Most Admiralty lawyers say "do not think of stepping into my office unless you have $5,000 in your hand."


One boat spent the winter anchored abeam of the cruise ship dock, displaying a sign, damaged by cruise ship and the name of the ship .They refused to pay for repairing damage and I have no money.

 

In contrast Iolaire was at nighr while anchored in Puerto La Cruz Venezula by the Margarita ferry and we collected in US dollars enough money to repair the damage. The story follows,


In the early 90s right after Antigua Sailing Week we departed English Harbor for Puerto La Cruz Venezula . We had a glorious reach of 300 miles averaging a little over 7.5 kts. The wind was so consistent that we never did anything more than minor sheet adjustments. We arrived about 0100 so sailed into the SE cornerof Puerto La Cruz harbor, anchoring out of the traffic lanes among the small fishing boats.


We turned off our masthead running lights and turned on our 360 degree masthead anchor light. I signed off the log" end of a good season" and went to my bunk in the aft cabin.


I was not quite asleep when I heard a noise. Opening my eyes looking out of the big aft opening aft cabin hatch I saw the bow of the Margarita ferry followed by the noise of a crash as she ran up our starboard side.I rushed up on deck to discover 23 feet of eight inch high teak bulwark gone, the starboard side chain plate gone, anchor line broken and ferry departed. Luckly there was no swell as on the starboard side of themast all riggng gone except the forward lower shroud. We had lost the starboard side anchor and line so we re anchored with the port side anchor.


Via the radio at 0700 we raised one of the boats in Marina Centro de Oriente, who organized a tow to the marina were we lifted out the mast.


I went to the ferry company to discuss the situation. They denied all liability. I then did some checking and found out the ferry company was insured in Lloyds of London. I also made contact with a surveyor whose surveys were regularly accepted by Llyods underwriters. He inspected the damage and we worked out an estimate of repair costs.


I also contacted my insurance company D Hudig and Co. They are a dutch insurance company that traces their history back to the early 1600, pre Llyods of london!!!!


They said try an organize a settlement locally, but inform the company, if they do not satisfactorily settle with you locally, D Hudig and Co will be taking the case up in london in Llyods claims court.


I returned to the ferry company's office with the above information and estimate of repair cost. They asked me to return the next day.


The next day they offered two options


I would have all repairs done, certified by surveyor, bills all paid, the present the ferry company the bills and they would pay me cash settlement now in US $ on the basis of the estimate that I had given them.


I took option 2 organizing the transfer of the $ to the Bank of Nova Scotia Tortola


In the above stories boats were attacked by a cruise ship and a 150' ferry but while anchored you can be attacked by smaller vessels and suffer significent damage

 

A friend who had no insurance and had cruised the eastern caribbean for over twenty years with no problems was hit while at anchor. Serious damage was inflicted on my friends boat.


The bare boat company sent a well qualified surveyor to inspect the damage. He did a survey report and estimated the cost of repairs. The cost the surveyor estimated, the owner felt would not cover the cost of repairs. He objected, requesting more money.


The surveyor said "accept the figure I have given you and you will receive a check for that amount. If you want more money you will have to hire an Admiralty lawyer and institute a law suit in the BVI court. The court has a crowded docket. It will probably be a year before the case will be heard. You are suing a locally incorporated BVI company in a BVI court, so you have little chance of winning".


Freind accepted the offer, had repairs done which cost considerably more than the money he received from the bare boat company.


In contrast, in the late 80s while anchored in Cow Pet Bay off St Thomas YC, Iolaire was attached by a sunfish.


If Iolaire had been a more lightly constructed wooden boat, or a fiberglass boat, the sunfish would have poked a hole right thru the hull. But Iolaire's 1 1/2" teak planking stopped the sunfish but tthe sunfish dug a gouge a foot long half way thru the planking.


At first the hotel owner denied liability but when informed he would be hearing from my insurance company's lawyers, and I stated I was happy to settle for repairs only , no loss of use of Iolaire while undergoing repairs, he agreed to settle.


I found a local surveyor who was well respected and whose surveys were regularly accepted by Llyods underwriters. He inspected the damage, and came up with two solutions, one relatively inexpensive, the other solution extremely expensive.

 

He stated" legally you can demand the removal of the plank, from stem head to butt and replace with like timber. That means finding a thirty foot length of teak 8" wide that will finish off at 1 1/2" thickness. Cost to remove,re fit plank, and find a suitable length of teak, plus the hauling and lay day charges is going to result in a huge bill


Or you can scarf in a 18" teak dutchman 3/4 " thick, re paint the bow from chain plate that goes to W,L forward to the bow and you are all set. Iolaire will have to be hauled to the repair."

 

For repairing hatchs and hatch and cocpit coambing I had some good seasoned teak on board so we decided to go the dutchman route. We drew up an estimate, hauling, fitting dutchman, painting bow from chain plate forward, totalled it and gave it to the hotel manager.


I also explained we could have demanded the plank be re moved replaced with like timber etc. He paid the repair estimate immediately in cash.


Another loss that can be inflected on the uninsured prudent yachtsman/women


Boats are hauled and stored. Hurricane comes thru the vast majority of boats blow out of cradles or stands. Many owners feel that if the boat blows out of stands or cradles the yard was negligent. The yard should pick up and re chock the boat at the yards expense.


However the yards do not look at it that way. Almost universally, yards charge to lift and re chock the boats. Talking so sailors whose boats have been blown out of chocks and stands, hearing what some of the yards charged, it would appear that some yards have profited by hurricanes.


Insured boats, insurance companies just adds the cost of lifting and rechocking to their insurance claim. Uninsured boats, owners must reach into their pockets and come up with cash.

 

One yard, Grenada Marine, after Ivan, picked up and re chocked boats at Grenada Marines expense , not owner or insurance company's expense. Their attitude seems to be unique in the industry.


The uninsured sailor is well anchored, a hard squall comes thru, a boat drags down on the uninsured boat and causes serious damage. If the boat that caused the damage is insured with a good company, and a good owner the insured boats insurance company will pay for repairing the damage at no cost to the insured boat owner as third party claims are paid in full, no excess /deductible is charged.


If the boat that dragged and caused the damage is uninsured, and the owner denies liability, refuses to pay to repair the damage caused, the uninsured boat owner whose boat has been damage is behind the eight ball. The only recourse is an expennsive admiralty lawyer, a long court case which will cost more than the cost of repairing the damage.


Hopefully the above stories have convinced all boat owners to take out insurance on their boats


Yachting in the Caribbean began as a trickle in the 50s, which was the beginning of the charter industry in ST Thomas and Antigua. It got rolling in the 60s, accelerated in the 70s, sky rocketed it in the 90, and has undergone an exponential yearly groth in the 21st century.

 

In the early years many of the american boats were uninsured, insured boats, some insured in the state, some with Lloyds. Almost all english boats were insured in Llyods.


There was no one in the eastern Caribbean who specialize in marine insurance.


In June 1966 I was in dublin getting engaged to a little irish girl I had met on the beach of Tyrell bay Carriacou. I flew to london , stayed at the Royal Ocean Racing Club and in three days I organized that I could place yacht insurance in Llyods of London thru a well respected London yacht insurance brokerage firm.


I was able to do this as in 1955 I made one hour before the start of the Fastnet race a pier head jump onto Lutine, the Llyods Yacht Club boat. They liked my sailing ability as I raced and cruised on Lutine for the rest of the season adsorbing at the same time much information on marine insurance and the working of Lloyds.


The skipper for the Fastnet was Sandy Harworth, Commodore Llyods YC, Rear Commodore RORC and Lloyds leading yacht underwriter. The mate for the Fastnet and skipper for the rest of the season was Br[an Stewart heir to AB Stewart, the leading commercial marine underwriter.


At the end of the season they organized it for me to join the RORC. Thus when I arrived in london in 1966 I was a member of the proper club, had the right connections in Llyods, and in my hand, hot off the press my Cruising Guide to the Lesser Antilles. This book is considered the book that opened the Caribbean to the cruising yachtsman and made bare boat chartering possible.


The above made it possible for me to in three days enter into the insurance business placing insurance with Lloyds underwriters thru a london broker.


Llyods, and other insurance companies that entered the eastern caribbean yacht market had few problems with large losses until the middle 80s when hurricanes began to cause losses. Klaus 84, Hugo 89 were bearable losses. But the catastrophic damage caused in Hurricane alley in 95 with Luis, follow by Marilyn caused many insurance companies and many Llyods yacht underwriter to with draw from the eastern caribbean yacht market.


The series of hurricanes that followed go to www.street-iolaire.com/ hurricane for more information caused Panteneaus and as far as I can figure out all Llyods yacht underwriters to withdraw from the eastern caribbean yacht market.


The vast majority of llyods underwriters and the insurance companies with whom Panteneas places insurance have realized there is less risk and more proit by insuring boats in other areas of the world.


Many sailior who think they have Lloyd's policies do not have Lloyd's policies. Rather they have a policy issued by a locally incorporated company that pay losses from its premium income and reserves they have built over the years.


If they have a bad year and the premium income plus reserves will not cover the losses they pull money from their Lloyd's of london excess of loss contract.


This system usually works but can break down if the company is locally incorporated and the island suffers a catastrophic loss as did St Thomas in 95. This caused the old respected Jackson insurance to go belly up as their re insurance contract in the Lloyds re insurance market was not large enough to cover the losses incurred. This leaft the insured busineses and house holders ashore and boats basically uninsured.


Owners of businesses and houses ashore that had been severely damaged or destroyed by the two hurricanes received minimal or no payment from the bankrupt Jackson company. Their apeals to FREMA fell on deaf ears. FREMA had been set up to cover uninsured home owners when disaster struck. Dispite home owners not being able to collect from Jackson, FREMA officials said they were insured sooooooo


Boat owners received little or nothing from Jackson insurance.


Let us hope that all local insurance companies keep more than enough re insurance to cover all exposure even if the island receives a catastrophic hit from a hurricane.

 

Via contact in London I can still place insurance on yachts leaving the caribbean heading back to europe, or heading a west across the Caribbean and across the Pacific but my trying to insure boats IN the caribbean is a waste of time


There are companies in the Caribbean, listed below that will organize insurance for boats in the carbbean.


I feel the underwriters are not properly rating the risks submitted to them on the basis of information available to the underwriter.


Many underwriters are insuring all boats in the caribbean, the whole eastern caribbean, all with NSD named storm damage/hurricane coverage, no reduction in rate if an owner does not want NDC coverage. Boats that are based in Hurricane Alley pay the same rate as boats based in the lower Caribbean.


Below are listed some brokers and companies that have organized insurance for various friends of mine.

 

  • Jhall@anjoins.ag, antigua agent for Anjor a Babados based insurance company that has been in business for 90 years. Anjo places it insurance with Massey a conglamoration of UK insurance companies
  • sharon.mitchell@caribbins.com, represents Carib insurers a Tortola based company in business since 1973 acting as agent for three highly rated UK insurance companies , Guardian General, Massey, United, Royal Star.
  • stacey.roberts@nagicobvi.com, a Tortola based company hopefully more information on this company by tues am your time
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