T&T: Fla. boat insurance

[LRZeitlin at aol.com]

In a message dated 7/1/08 12:00:46 AM, Gene writes:


> As a yankee from Wisconsin considering a move to FL, I was wondering if
> there was any difference in insurance premium between keeping a boat on the
> coast vs inland. Specifically, St. Augustine area south through Fort
Lauderdale
> vs on the St. Johns River (i.e Green Cove Springs through Palatka). I don't
> know if hurricanes are any less intense by the time they get that far inland
or
> if that even matters. Any experience is appreciated!
>   
>

Going without full insurance is a gamble. But in some situations is a good
one. Forget about it if you don't own the boat outright. Most lending
institutions will require that the boat be fully insured. Virtually all venues
will
require that you have liability insurance and many marinas will require that
you
make them co-beneficiaries of the policy.

It makes sense to self insure for damage in a high insurance rate area if you
feel that you can stand the worse case loss. Insurance companies set rates
area wide and some locations in that area are more protected than others. The
St. John River is a good example. Most hurricane damage to boats is caused by
the storm surge and boats in the lower end of the St. John basin would feel a
lower surge than boats on the coast.

As a general guide, if the value of the boat is less than 20% of your net
worth and you own it outright and if the berthing or anchoring area is more
protected than the average for the region, then it is worth taking the gamble.
A
damaging hurricane makes landfall in South Florida once every three years. In
North Florida in the Jacksonville area and in the St. John River area it may
be
once every 10 years. Since many more boats are insured in Miami than in North
Florida, it makes sense for the insurance companies to set their rates based
on that exposure. If the boat, at 20% of your net worth is 50% damaged every
10
years, then the average risk to your net worth is only 1% a year. If the
insurance premiums are higher than that, then you are financially better off.
After all, the stock market dropped 7% so far this year.

However, if you are risk averse and have trouble sleeping at night, it might
be better to fully insure.

Larry Z




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