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DON'S LOG: stories, experience and advice

Insurance and the beginning of yachting in the Caribbean

INSURANCE and the beginning of yachting in the Caribbean, and its expansion to its present state, why it is now so difficult to obtain insurance coverage in the Caribbean, Don Street’s insurance experience, and advise as to how to obtain insurance coverage.

I arrived in St Thomas in 1956. I bought the engineless 46’ cutter Iolaire, built 1905. In Iolaire and then L’ll Iolaire, and other boats, for the next 63 years I cruised, raced, chartered ,explored, charted and wrote about the Caribbean.


My Cruising Guide to the Lesser Antilles 1966 opened the eastern Caribbean to the cruising yachtsman and made bare boat chartering possible. The original guide thru the years was re written and expanded to four volumes. They covered from the western end of Puerto Rico east to St Barts, south including Trinidad, west along the Venezuelan coast and off shore island to Aruba. These guides are still available iUniverse.com or Amazon

In 1979 I made an agreement with the late Tom Wilson to do Imray Iolaire charts covering the same area as covered by my guides. The charts are a chart and guide in one as in the booklet that now accompanies the chart contains the guide information that was on the back of the chart. The charts are so well regarded the the US Coast Guard vessels in the Caribbean use Imray Iolaire charts instead of NOAA and carry on board copies of my guides.

Navionics, Garmin. C Map, plus some other electronic chart companies pay Imray a royalty for the use of information pulled from Imray Iolaire charts.

When I arrived in St Thomas the entire fleet’ and’, private yachts and charter boats was less than a dozen. The same was true of the Antigua fleet.

The St Thomas fleet consisted mostly of boats from 40 to 55’. The day charter boats, about half the fleet were day charter boats. A large proportion of their customers were bored ladies in St Thomas for eight weeks to establish residency so they could obtain a divorce in a Federal Court. Needless to say, young good looking bachelor skippers and crews had a field day entertaining bored young females in process of getting rid of husbands. The term charter boats seldom left the Virgin islands, beating to windward across Anegada passage did not appeal to them.

In contrast the Antigua fleet were almost all 65’ and over. The late Cmdr Vernon Nicholson RN ret had arrived in English harbour with Mollihawk, a 75’ schooner with his wife and two sons ,Rodney and Desmond both in their 20’s. They were on their way around the world but stopped at English Harbor to do some re fit work.

Some guest from the very exclusive Mill Reef Club saw Mollihawk and chartered her for a trip to Guadalopue and the Saints. This was a complete surprise to Cmdr Nicholson, to get paid to do what he loved to do.

He also realized that in England there were beautiful yachts 65’ and over that were only used in the summer, laid up in winter. The owners had plenty of money, but because of foreign exchange regulations they could not travel. However if they sent their boats to the Caribbean, then, the Cmdr could charter them to Americans who would pay their charter fees in US $. It did not matter whether or not the operation made money, the owners could lose money but had US $ so could travel in Europe or the states.The owner had plenty of money in England , he just could not obtain foreign currency.

Thus the Nicholson charter fleet was launched

Thru the years I have watched and taken part in the growth of yachting in the Caribbean from nothing to the billion dollar industry it is today.

The St Thomas fleet merged and developed along similar but slightly different lines. In both the US and BVI term charter boats increased in size so now almost all are between 50 and 85’ few bigger. Day chartering has been completely taken over by the multi hulls.

Privately owned boats vary from the J24s almost all converted to IC24s up in size to about 55’. The majority of these boats stay In the VI 12 months of the year. Privately owned multihulls have begun to arrive on the scene.

Big 100’ mini maxis and true maxis of 125’ an up to what look like small cruise ships arrive every winter but always depart to the states or Europe in the spring.

The bare boat industry has grown from a few small struggling companies to international companies like Sunsail, Mooring, Dream Yachts that are international companies with flotillas scattered all over the world. There are only a few bare boat companies in the US VI but well over a dozen in the BVI. The Boats have changed to the point that I think the catamarans my outnumber the monohulls.

The Antigua Yachting fleet is quite different. There is only one bare boat company, the Moorings and it is not a big operation. The crew charter boats have grown. With few exceptions they are 70’ or over and the sky is the limit. Some of the charter yachts are the size of a small cruise ship.

The private yacht fleet in Antigua is roughly the same as the private yacht fleet in the US and BVI

Forty years ago, the majority of yacht cruising the Caribbean were 40 to 50’, today they are 50’ and up.

From the underwriting view, the big yachts all clear out well before the hurricane season starts. The boats that are in the Caribbean that are looking for insurance, are the live aboard cruising boat which if it has a good skipper who reads tracking hurricanes, should be able to avoid hurricanes.

Boats that absolutely need insurance, the boat hauled out in a yard, the boat laid up in a marina owner absent, laid up in a marina, locally owned, lines and fenders can be tended in hurricane or boat moved. Boat laid up on hurricane mooring. Mono hulls /multihulls, a vast difference in rates and insure ability

My late Grandfather, CR Street was a king pin in the Chicago and Midwest insurance business. He was famous for his ability to puff on a cigar, talk on a phone and negotiate an important insurance deal at the same time

Regarding yacht insurance in the Eastern Caribbean, I am reminded of a sales letter that I found that grandfather had sent out to his salesmen.

“ Just because it is not a prime risk, do not reject it. Almost all risks are insurable once all the facts are known. Give me the facts and I will come up with a rate that should be profitable for us and bearable to the insured”.

When looking for insurance. assemble all the facts and hope the broker can find an underwriter that thinks like my grandfather.

I watched and took part in the development of the Bare Boat industry, from a few dozen miscellaneous boats that were always breaking down to fleets of identical boats specifically built for the bare boat company concerned. See Kick starting the Bare Boat industry.

As each year goes by there are more and more catamarans being added to the bare boat fleets. Because of there windage they are hard to secure in a blow and almost impossible to secure in a hurricane. Trying to work out a proper rate I hope the underwriter has a copy of the NOAA hurricane book with the lose pages bringing it up to date, and has studied the track charts assiduously.

As noted else where in this Hurricane section of my web site, I filed my first marine insurance claim for damage done to Snipe number200 3 in the 1944 hurricane. In 2004, sixty years later I filed a claim for the loss of L’ll Iolaire.

I have been on the other side of the fence as I have been in the insurance business as for 64 years I have been as a broker organizing claim settlements that were satisfactory to both the underwriter and to the boat for which I had organized insurance.

Regarding my 64 year in the insurance business, I first set foot on the floor of Lloyd's in September 1955 as a result of making a pier head jump on to Lutine, the Lloyd's YC boat an hour before the start of the 55 Fastnet race. It was such a pier head jump that while beating down the Solent Sandy Harwoth the skipper, also Commodore Lloyd's YC and Rear Commodore R0RC said over his shoulder ”young man who the hell are you and how did you end up on board” They evidently like my sailing ability as I finished the season on Lutine, racing to La Rochelle, Benodet and then cruising back to Gosport.

Sandy was the leading yacht underwriter in Lloyd's, mate Brian Stewart, who took over as skipper after the Fastnet, was the son of AB Stewart the leading marine underwriter. In 1966 on a visit to London these contacts Sandy, Brian and others that had raced on the Fastnet and following races, plus my membership in the RORC enabled me to set up as a broker to insure yachts with Lloyd's thru a London brokerage firm McNeil and Coulsun.

I have watched the changes in Lloyd's. In 1966 it was still hundreds of individual underwriters sitting in their boxes, who would take a small share of a risk by initialling the slip with a percentage number, the amount of a risk he was willing to underwrite. The risk was briefly described at the head of a long slip of paper. Today it is corporate underwriters who will underwrite the whole risk worth tens of millions.

I still occasionally manage to place risks in Lloyd's, but it is extremely difficult. About 15 years ago all sorts of regulations have been enacted that have largely destroyed the personal contacts I had developed. Also many of my personal contacts have died or retired. The few that are left feel there is a better return on investment by insuring boats are not in the Caribbean.

I am now looking at the American market.

In recent years insuring a boat in the Eastern Caribbean has become extremely difficult thus some sailors go uninsured.

Some sailors take the view that they are good sailors, their boat is well maintained. They feel it is better to spend money on gear and equipment than spend the money on insurance premiums. In the Caribbean this is a particularly bad decision. You are anchored, a bare boat crashes into you, damage[ng your boat. Correcting from the bare boat company, or its insured is usually impossible.

You are stored ashore during hurricane season, hurricane hits, your boat is blown over and damaged. Most yards will charge you to lift, re chock and repair the boat. You or your insurance company, if you are insured, will have to pay the bill of lifting, re chocking and repairing your boat. Many yards will not haul boats unless they are insured.

Sailors wonder why rates are so high? If you examine the growth of yachting in the Caribbean in the last forty years , and the increase in the number of hurricanes in the last thirty years, and payments to yachtsmen for hurricane damage incurred, you will see the hurricanes have been disastrous to the insurance underwriters.

When Janet tore apart Grenada in 1955 there were no yachts of any size in Grenada. The yacht marine market never even heard about Janet. The previous hurricane had been in 1856. Numerous tropical storms mph but that is not enough wind to cause serious damage to anything but crops.

Thus Grenada was thought to be south of the hurricane belt. Boats flocked to Grenada to sit out the hurricane season. Two yards were created to store boats out of the water for hurricane season. Then Ivan the terrible hit. In Spice island 175 boats were blown out of their stands. In Grenada Marine about 50 boats blown over. Anchored in various harbors and coves, dozens of boats sunk and a similar number damaged. The aerial photo of Spice Island marine with 175 boats blow out of their stands was circulated world wide via TV and made an indelible impression on underwriters.

Despite the massive expansion of the yachting fleet in the fifteen years previously, until 89 there were no tropical storms or hurricanes that did enough damage to the yachting fleet to be a wake up call for the underwriters. The late season early November, wrong way hurricane Klaus1984 did not do massive damage. It started south of Puerto Rico and headed north east. It received a lot of publicity as it brushed St Thomas in the middle of the fall St Thomas charter boat show. As it approached St Martin, the bridge tender for the bridge into Simson Lagoon went missing so no boats could shelter in Simson lagoon. Iolaire survived anchored off the north side of St Martin by using six of her seven anchors. See Surviving Klaus. Many boats were damaged, some sunk. The total losses were not enough to worry the yacht insurance market.

Shortly afterwards I bought the NOAA hurricane book,1971 to 1978 with loose page update thru 1984. I periodically up dated it via loose pages. As a result of the 2017 disasters I bought the new NOAA hurricane book 1851ro 2006 with loose pages thru 2017

However in 1989 Hugo hit Antigua doing serious damage to boats sheltering in the so called Hurricane hole of English Harbor. It then continued NW cleaning out the BVI and USVI yachting fleets, sinking 80 or more boats that fled to the so called Hurricane Hole of Dewy in Culebra. Many more were sunk in the so called Hurricane holes of Brenner Bay St Thomas and hurricane hole in St Johns.

This was a real wake up call to Lloyd's underwriters as besides the losses to the St Thomas fleet they were heavily involved in the BVI Bare Boat industry which suffered considerable losses.

As a result of Hugo I wrote Reflections on Hugo in all four of my guides. I gave my recommendations as to how to minimize hurricane damage to boats ashore and afloat. I followed this by writing about a dozen articles in Caribbean Compass, US and UK Yachting magazines on the same subject. If my advise had been followed as subsequent hurricanes approached the Caribbean, it would have saved the insurance underwriter millions on $ as a result of avoidable hurricane losses.

Then in 1995 Marilyn and Luis cleaned out English Harbor, St Martin and the Virgins with underwriters suffering huge losses Again, many losses would have been avoided if my advise in Reflections on Hugo had been followed.

In 98 Francis gave St Croix and the south coast of Puerto Rico a good wack. In 99 Lenny the wrong way hurricane that started in the western Caribbean, headed east giving St Martin a good wack. This was only the third hurricane since 1851 to form in the Caribbean and head east. The previous two were Alice Dec 30 , 1954, to Jan 5,1955,Klaus Nov 5 /13 1984.

Then 2008, Omar Oct 15to 19, started in the central Caribbean and headed north east doing a direct hit and major damage to St Martin. Omar was the fourth hurricane since 1851 to form in the Caribbean and head NE.

In 2011 Irene hit the Virgins as a tropical storm and developed into a major hurricane as it left the Virgins. In 2012 Leslie passed thru the islands south of Martinique as a tropical storm. It then made a right angle turn and headed north, passing west of the islands, passed over St Martins as a tropical storm, but then developed into a hurricane, which wandered around the Atlantic. It did a complete 360 degree loop and ended up hitting the coast of Portugal nine days after departing the Caribbean.

Tropical storms that pass thru hurricane alley as tropical storms, but if they hit the warm waters of the Bahamas they almost all become full hurricanes.

In 2014 NOAA said Gonzales that was approaching Antigua was only a tropical storm. However just before it hit Antigua it built up to be a full blown hurricane. Luckily it was fast moving and did not do too much damage to boats, afloat. How boats hauled in yards fared I do not know. However it gave St Martin a very good wack and as usual boats anchored in Simson lagoon, dragged, hitting other boats causing a lot of damage and some sinking.

Then in 2017 hurricane alley was hit by four hurricanes , Harvey, Jose, Irma and Maria causing complete destruction afloat and ashore. In Tortola Paraquita lagoon was jam packed with mono and multihulls that tore lose and cost millions of $ in damages.

A major Norwegian underwriter had just insured the entire Mooring /Sunsail fleet a short time before Irma. The preliminary claim was $10 million which undoubtedly went higher as details came in. The underwriter was fired where the Mooring/Sunsail Tortola fleet secured insurance on expiry of policy ????

The four hurricanes, Harvey, Irma, Jose, Maria, all in a period of a month, cleaned our everything in hurricane alley from St Barts westward to western Puerto Rico.

Then in 2019, Dorina came thru the islands swung north and passed between St Thomas and Culebra doing relatively little damage to either island. As usual, upon reaching the warm waters of the Bahamas, built up a head of steam becoming a major category 5 hurricane. It then sat on top of and destroyed Andros.

Reading the above you can see why underwriters are unwilling to insure boats in hurricane alley. If you have insurance, an the underwriter is willing to renew, do not complain about the rate just be happy you have coverage

If you are looking for insurance and are on board your boat 12 months of the year, tell the broker to tell the underwriter that you will be cruising Martinique south see Cruising during hurricane season. Tell him you do not need named storm coverage. If a hurricane approaches, you will up anchor and head south to Trinidad well south of any hurricane.

If you are going to lay up ashore, look at , Tracking Hurricanes.

If you are looking for insurance reread the above about hurricanes since 95 and especially the last 15 years. I would advise not laying up ashore in any of the yards in hurricane alley.

My advise is lay up in a yard in Antigua or island to the south. If you are having problems securing insurance coverage ask the yard manager the names of the insurance company or companies that are insuring boats in the yard.

The yards in Carriacou and Grenada are south of the south end of the so called hurricane box. Most but not all insurance companies and underwriters use a southern limit of 12 30 north. Some insurance companies and underwriters still use a southern limit of 12 north which is south of Grenada. If the company is using 12 N as the southern limit of the hurricane box, if hauling in Grenada, to be covered you would need the named storm coverage.

If you are hauled in Carriacou or Grenada, and your underwriters hurricane box is 12 30 make sure you have in writing that if a cousin of Ivan hits Grenada that you are covered for damage incurred a s result of a named storm even though you do not have named storm coverage.

If you are hauled and have the mast pulled, the broker should be able to obtain a slight reduction in rate vs rate hauled with mast in place.

When quoting for rates for hauled boats, rate should be highest for yard is hurricane alley and lower for boats hauled in Antigua and St Lucia, still lower for Carriacou, and lower still for Grenada.

According to NOAA the north coast of Trinidad and the ABC islands have never been hit by hurricanes. Some yachts have secured insurance at a reasonable rate on the basis that they will be in Trinidad or the ABC islands from June 1 to November 30.

Thus boats hauled there should have the lowest rate than boats hauled in the islands of the Caribbean.

Similarly boats left in the water in a marina the marinas should be rated by their location in relation to how often the island has been hit by hurricanes.

In the case of both storing ashore, and in marinas, the insurance application should report how boats fared in the last two hurricanes to hit the facility and what has been done to reduce hurricane caused losses.

Many underwriters who presently insure boats in the Caribbean, will continue to renew insured boats but will not take on new business.

With difficulty I have compiled the below list of Brokers who feel they can organize insurance for boats in the Caribbean in hurricane season.

  • wct@offshorerisks.com
  • Rachel.imis@gowrei.com
  • Simon.Crook@caribbins.com
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