Struggling at obtaining insurance?

Following are observations, ideas and things to consider when pursuing insurance for the Pacific Cup. Please take this information with an open mind as we are not experts in boat insurance and risk analysis. Obtaining insurance for your boat, that also includes coverage for a race to Hawaii, requires hard decisions, money, uncertainty and knowing your own risk adversity (sounds like playing the stock market doesn't it?). The author, and Pacific Cup Yacht Club, takes no responsibility for the following as it is based on anecdotal informal and not extensive research. Now that our rear is covered, here are some observations you may find useful.

You need your annual insurance policy to be with the same company that will provide you coverage for the race. Most insurance carriers believe insuring boats crossing oceans is significantly riskier then insuring a boat that sails locally and spends much of its time sitting in a slip. Your insurance broker may need to spend significant time getting you the extra insurance you'll want for the race. Your insurance broker will be spending time talking to you about your options (coverage, exclusions and costs) as well as working with the insurance carriers to find you the coverage you want. Brokers are not interested in spending several hours with someone just to get their insurance business for the race - or even just one year. They want to know they will obtain several years of insurance premiums from you as it will probably be after the second year before they start making money from your business. So, a "catch 22" for this years race, you need to shop for your annual boat insurance a year or two before the race - with an offshore boat knowledgeable broker who can later insure you for the race. You will need to sell the agent that you are a good potential repeat customer.

Don't expect "quality predictable" insurance coverage from companies that do not specialize in insuring boats that go offshore. Yes you may be able to get boat insurance from the same company you get home and car insurance from, or from companies that mostly insure small powerboats, and it will probably be low cost, even 25% to 50% less, but you will probably be unable to get coverage for the race. If they do say they will cover the race, you must GET IT IN WRITING. If you go offshore insured through a generic high volume boat policy, you are gambling. They may be perfectly good and high quality in-shore insurers, but are not well suited for offshore. Some people are comfortable making this risk/cost tradeoff - and some are not.

Brokers may vary, but the quality offshore yacht carriers do not. A few "grade A" carriers include insurance companies like Zurich, Markel, Travelers, and brokers like Marsh and Lloyds (and I am sure there are more). These offshore carriers ask hard detailed questions like your sailing experience, boat ownership history and claim history. They want to know exactly where you will be sailing and when. They will want resumes of the sailing experience of each crew member. They will also probably want a survey (out of the water !) done within the past year. If the insurer is not asking these questions, they may be a perfectly good in-shore insurer, but they probably don't understand offshore boating which can result in problems should you have a claim.

What about those "exclusions" like rig and sail coverage? A knowledgeable offshore broker, with enough financial incentive (i.e. your money), can provide you many options including significant coverage that less offshore boat knowledgeable insurers may have turned you down for. But, it will cost you. So find a quality broker and start talking (of course you really need to have already be working with the broker for a year or two before having this race specific conversation… which means you will need to do a great job selling them on your potential to be a good long term customer). That said it is unlikely you will get coverage of the sails and rig, certainly not spinnakers, while racing.

How much is it going to cost me? For a typical 40 foot racer/cruiser, you may have to pay an offshore yacht specific broker 25%-50% more than the volume boat insurers offer. Then, for the race, you may have to pay an additional $250 for the rider to cover the three or so months you may be offshore racing and another $250 if you sail home. And if you want reduced exclusions, it'll cost more yet. Be sure to ask them how/if exclusions vary between the race over and the delivery trip home. You may be able to cover sails and rig for the delivery home, but not the race. Remember that sailing to Hawaii, and returning home, is more miles then most boats go in 5+ years and will probably include quite a few miles in the frequently adverse offshore weather conditions of the west coast of the US. A lot more risk then a normal year when your boat spends most of its time at the dock. Don't be surprised to hear you'll need to buy a year’s insurance coverage in order to get the rider that covers the race.

Why can I not get insurance? If you are talking to a quality insurance broker and are willing to pay for quality coverage, there are some situations where you still may have difficulty getting insurance coverage. Examples of difficult to insure people and boats are those going single-handed or double-handed in a small or high performance boat, those with a history of claims, and those with little offshore sailing experience (I think you get the picture). In these cases you'll need to do a bit more work finding the right insurer, and depending on your budget, you may have to settle for either liability only or no insurance.

Who are quality insurance brokers? Making recommendations is tricky stuff as we all have different expectations of what is good and what is not. In addition, there is a lot of room for honest misunderstanding when/if you have a claim so you can find positive and negative feedback on virtually all insurance brokers and carriers. That said, we have heard from several entrants that have sailed to Hawaii several times about insurance brokers they are happy with (at least for now). These include the following companies.

Note "Limitations" are based on our limited understanding, may not be very accurate, and are surely incomplete but we are providing anyway as it may help save you from making a few unnecessary telephone calls.

Bay Risk Insurance Brokers

(800) 647-2025 ask for Marvin

Office in Alameda, California

Blue Water Insurance
(888) 866-7277
Offices in San Diego and Florida
Limitations? Over 37 feet, no single handers, no carbon fiber masts

Jack Martin Insurance
(800) 421-8818 (Morgan Wells or Damon)
Limitations? No single or double handers

Mariners General Insurance

Craig Chamberlain
204 Riverside Avenue
Newport Beach, CA 92663
Phone (949) 642-5174 / Fax (949) 642-0252
Limitations? No single handers

Ocean Marine Underwriters

Pat Kudlich, President

735 Bishop St, Ste 327

Honolulu, HI 96813

Phone 808 532-1000 / Fax 808 532-1009

NorthStar Risk Management
Pat Lowther
1777 Botelho Drive, Suite 360
Walnut Creek, CA 94596
direct: 925-975-4686
mobile: 925-407-5507
fax: 925-472-5237

Limitations? No boats over 25 years old. Ocean racers considered on a case by case basis

To be clear, the Pacific Cup Yacht Club and sponsors of the Pacific Cup make no endorsements or recommendations for these companies.

Bob Gray has been doing a little research on the insurance issue and has located two brokers who believe they generally can place insurance for Pacific Cup racers. They are:

1) Gowrie Barden & Brett Ins brokers - Connecticut; 860 399-5945;
Contact is Rod Clingman
Marine Department
Gowrie Barden & Brett Insurance ;
(860) 399-3677 Direct; (860) 399-3620 Fax
800 262 8911ext 177

2) Morgan Wells - Jack Martin & Associates
326 First St. #27
Annapolis, MD, 21403 USA
410-626-1000 ext. 5723; FAX: 410-626-9966
800-421-8818 ext. 5723

Racers applying for insurance should each prepare a packet for the broker to take to the underwriters, including a crew list (with resumes), vessel descriptions including meeting the Special Regulations (the underwriters are familiar with the term ORC and it wouldn’t hurt to identify boat as meeting ORC regulations) and show the Notice of Race and Inspector Checklist showing basic criteria they need to meet to sail the race.