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DON'S LOG: stories, experience and advice

OBTAINING INSURANCE FOR BOATS BASED IN OR CRUISING THE EASTERN CARIBBEAN

Prior to the early 90s there was little difficulty organizing insurance with companies in the states, UK or Europe to cover boats in the eastern Caribbean. However, starting in the 90 s yachting in the Caribbean expanded on a steep curve. Since about 2010 yachting has expanded exponentially causing huge financial losses whenever a hurricane hit a yachting center.

 

Starting in 84 with the late season early November wrong way traveling hurricane Klaus which caught the St Thomas Chart Boat show, 17 hurricanes have hit the islands of the eastern Caribbean. This works out to one hurricane every other year. In most cases, the hurricane hit a major yachting center causing catastrophic damage.

 

As a result, Panteneas and virtually all Lloyds yacht underwriting syndicates have decided that theie reserves will earn a better return if they cease insuring yachts in the eastern Caribbean

With the two major players pulling out, it has become difficult to insure boats based in or cruising in the eastern Caribbean.

 

In the states when trying to obtain coverage you may find yourself dealing with both brokers and agents for large insurance companies. Brokers obtain quote from insurance companies. Some agents for some of the big companies ,to use the insurance term, to hold a pen, ie they can set a rate and insure a boat without going to head office. As long as they have a good win loss record, head office leaves them alone. Thus, head office may tell agents not to insure yachts in the eastern Caribbean while an individual agent may continue to do so.

 

In the Caribbean you are usually dealing with either a broker who tries to find a company to insure your yacht, or a local insurance company who will insure your yacht. Often sailors will say they are insured with LLoyds, thinking they are insured with a Lloyds yacht underwriting syndicate .but they are not. The local insurance company insures the yacht paying claims out of their reserve fund they have built up over the years. The local underwriting company's reserve fund is backed by an excessive loss policy usually in Lloyds, so they tell the customer they are insured with Lloyds


 

This system normally works well but in 95 when two hurricanes hit St Thomas causing catastrophic losses, an old time insurane company that had been in business for probably a century ,discovered their excessive loss policy was not enough to cover losses. The company went belly up. Boats were unable to collect claims, house holders could not collect claims nor could they obtain help from FREMA, the federal disaster fund as FREMA said they were insured!!!! Yacht insurance policies organized in the states for boats based in or cruising in the eastern Caribbean are usually booked with no NSD named storm/hurricane damage. If NSD coverage is required there is a stiff extra premium. They will give a discount for period laid up. An important point, if you have no NSD coverage, and lay up out of the hurricane box, in Grenada, well south of 12 30 N, and a cousin of Ivan visits Grenada, your boat is damaged by a named storm, but you are out of the hurricane box, will the underwriter pay for your repairs?

 

Do not take the brokers opinion on this situation. Insist that the underwriter will confirm that you are covered for NSD coverage outside of the hurricane box.

 

In contrast most quotes obtained in the eastern Caribbean include NSD coverage and no discount for boats that do not need or want NSD coverage. Nor do they offer a discount for period of laid up. This is not universal, try negotiating to fit your needs.

 

State side insurance brokers/ company agent I know little about, so I will offer no suggestions

 

All the below have organized insurance for boat owned by my friends. Ask for quotes from all of them and compare.


In the case of Carib insurers, they place insurance with three different UK insurance companies. Ask Carib insurers to obtain quote from all three companies they represent. Then compare rates ,coverage, and the company's reputation for satisfactory settlement of claims

 

For all the sixty years I have been in the insurance business I have said " there is good insurance and cheap insurance , but there is no good cheap insurance. Check the claim payment settlement record, poor settlement record, poor insurance"

 

If you already have insurance, but feel you are paying too much for your coverage, send complete information as described in INFORMATION THAT SHOULD BE SENT TO BROKER/INSURANCE AGENT/COMPANY TO OBTAIN INSURANCE to all the brokers listed.

 

Also send to them the name of your present insurers, your hull valuation, the deductible/excess, liability limit, cruising area, premium being charged. The broker will look at it, if the broke feels he or she can offer a better deal the broker will quote. If he or she feel he or she cannot negotiate a better deal he will tell you so and neither the broker nor you will be wasting time.

 

  • sharon.mitchell@caribbins.com. Carib Insurance has been in business since 1973. They place insurance with three highly rated UK insurance companies, Guardian General, United Royal Star and Massey.
  • jhall@anjoins.ag is the Antigua agent for Anjo insurance based in Barbados, a company that has been in business for 90 years. Anjo places insurance with Massey, a conglomeration of UK insurance companies.
  • stacey.roberts@nagcobvi a Tortola based company that has survived the various hurricane disasters that have hit Tortola. They must have stayed on top of the excessive loss reinsurance situation.
  • streetiolaire@hotmail.com I have been placing insurance will Lloyds underwriters thru london brokers for sixty years but as noted Lloyds yacht underwriters have withdrawn from the eastern Caribbean yacht market. I can insure boats leaving the Caribbean for the pacific or leaving to cross the Atlantic to cruise European waters but not boats in the Caribbean.
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