Insuring an older trawler

Insurance can decide whether you can buy a boat at all. An older trawler, a big step up in size and plans to cruise far from home each narrow the market. We had all three. This is what we learned getting quotes on several boats.

Start before you spend anything

You don’t need a survey to find out whether a carrier will write the boat. You do need one to bind a policy. So ask early, before you pay for a haul-out. Many carriers won’t write a boat older than 25 to 30 years, and a 1980s Taiwan trawler is past that.

Make closing depend on insurance. Our contract requires a binder “on terms, premium and underwriter conditions acceptable” to us by the acceptance deadline.

Your experience matters as much as the boat

This surprised us most. Our largest boat before this one was a fraction of the size. One broker told us that many companies won’t write a boat more than about 10 feet longer than the largest boat you’ve owned. This is pretty common.

What helped:

• A boating résumé. Every boat you’ve owned or run, real hours and the waters you’ve covered. Be accurate. If a number can be checked against an hour meter or a logbook, make sure it matches.
• Courses. A state boating safety course, the BoatUS aids-to-navigation course, and membership in the Great Loop and Marine Trawler Owners Associations all show you’re serious, and get you in contact with a wealth of experience from fellow boaters.
• Captain time. Expect a requirement for documented hours with a licensed captain aboard before the underwriter signs off on your competency. One quote we received required 50 hours. Other owners of 50-foot-plus boats report 80 to 100. The sign-off form scores departure preparation, docking, the navigation rules and emergency handling. We are doing it regardless of insurance requirements…we need it. Period.
• Crew rules. Some policies require a second adult aboard whenever the boat is underway, and it gets worse from there.

Survey requirements

Insurers want a recent out-of-water condition and valuation survey. Typical rules we saw:

• Only certain surveyor credentials are accepted, usually SAMS AMS or NAMS CMS. Ask before you hire.
• The report must state market and replacement value, the surveyor’s credentials and scope, and real recommendations.
• Some carriers require a signed letter confirming you’ve completed the surveyor’s recommendations. Budget for those repairs.
• The insured value follows the survey’s market value, not the price you paid.

Read the terms

Ask for agreed value hull coverage, not actual cash value. With agreed value, you and the insurer settle the hull’s value up front. With actual cash value, depreciation is applied after a loss. Every quote we requested was agreed value plus protection and indemnity (P&I) liability.

Then read everything else:

• Deductibles. On older boats, the hull deductible is often a percentage of the hull value, and the named-storm deductible is higher. We saw 2 to 4 percent on some quotes and 10 to 20 percent on others.
• Hurricane season. Many policies exclude or restrict named-storm coverage south of a line (often Cape Hatteras) between July 1 and November 1. Know where the boat must be during those months.
• Navigation limits. One quote limited us to the U.S. East Coast within 150 miles offshore. Check that the territory covers your real plans: Canada for the Great Loop, and the Bahamas.
• Lay-up periods, cancellation terms and minimum earned premium.
• Surplus-lines carriers. Specialty carriers that write older boats are often surplus lines, which aren’t covered by state guaranty funds.

Warranties are enforced

A policy’s warranties are conditions, and a carrier can deny a claim for breaching one even if it had nothing to do with the loss. One broker gave us an example: fire extinguishers not professionally inspected and tagged every year. Keep a list of every warranty in your policy and keep the paperwork for each.

Older boats raise specific questions. Ours has an original Halon engine-room fire system. Halon hasn’t been made since 1994, and insurers increasingly want a modern clean agent instead. Ask before you buy.

What insurers ask

Expect questions like these, and answer them accurately:

• Will you live aboard?
• Where will the boat be from July 1 to November 1 (at least on the East Coast), and will it be afloat, ashore or on a lift?
• Do you want windstorm coverage?
• Will the boat be kept far from your home?
• Who will complete the surveyor’s recommendations?
• Will you spend more than 30 days in the Bahamas?
• What prior losses have you had?

Marinas usually want to be named as an additional insured. They may require coverage of anywhere from $300K to $1M.

Working with brokers

• Start with one specialist broker. Most brokers share the same wholesale markets. If two submit the same boat at once, it can block both.
• Check every quote’s details. One quote we received listed the wrong year and engine horsepower.
• Bind early. When a named storm threatens, carriers freeze new policies. A binding moratorium can land in the middle of your acceptance window.

We’ll update this guide once our policy is in place, with what we ended up with and what it required.