AlanT
Guru
- Joined
- Oct 21, 2012
- Messages
- 738
- Location
- USA
- Vessel Name
- MoonShadow
- Vessel Make
- Wendon Skylounge 72'
Another thought for those trying to compare premiums between dissimilar boats and different locations.
The majority of the premium that you are charged is based on the potential for a complete loss of the vessel and therefore is calculated as a percentage rate which is applied to the amount they would have to pay out, in other words the declared/insured value:
Declared/InsuredValue $100,000 Premium $1,000 derived from a rate of 1% for example.
Then there will be modifications to the rate to reflect the particular risk. For example a credit if a larger than 'standard' deductible is chosen, or a load, if applicable (and/or more restrictive conditions) for a location that is considered more hazardous such as FL for example.
So, if you want to compare premiums of boats in a similar hazard zone the easiest way to do that is to compare the rate - not the premium.
You can see that comparing the premiums of even two similar boats with different valuations is not that helpful. Example:
A quick check of GB 42' trawlers for sale showed a range from $75k - $350k.
At my current insurance rate of 1% as an example the premiums for these would range from $750 to $3,500! In reality the rate for the $75k boat would likely be loaded up during 'underwriting review' to reflect substandard valuation. In other words there is not enough premium to pay for the partial losses in the premium charged, so a load would be applied - say $500 to produce a rate of 1.67% and a total premium of $1,250.
I hope this is helpful
~A
The majority of the premium that you are charged is based on the potential for a complete loss of the vessel and therefore is calculated as a percentage rate which is applied to the amount they would have to pay out, in other words the declared/insured value:
Declared/InsuredValue $100,000 Premium $1,000 derived from a rate of 1% for example.
Then there will be modifications to the rate to reflect the particular risk. For example a credit if a larger than 'standard' deductible is chosen, or a load, if applicable (and/or more restrictive conditions) for a location that is considered more hazardous such as FL for example.
So, if you want to compare premiums of boats in a similar hazard zone the easiest way to do that is to compare the rate - not the premium.
You can see that comparing the premiums of even two similar boats with different valuations is not that helpful. Example:
A quick check of GB 42' trawlers for sale showed a range from $75k - $350k.
At my current insurance rate of 1% as an example the premiums for these would range from $750 to $3,500! In reality the rate for the $75k boat would likely be loaded up during 'underwriting review' to reflect substandard valuation. In other words there is not enough premium to pay for the partial losses in the premium charged, so a load would be applied - say $500 to produce a rate of 1.67% and a total premium of $1,250.
I hope this is helpful
~A
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