Re: Insurance


David Vogel
 

Owners of SM#396, svPerigee, Australian registered, are interested in potential aspects of self-insurance within a group of AMEL owners. 

 

Currently insured with: Pantaenius Australia, expiry Oct’20; FORM: comprehensive (all risks); Amount insured: ~AUD450k (~USD295k); Premium: ~AUD9k (~USD6k)

 

1.Owner: D&L Vogel

2. Hull Number: SM#396

3. Year boat built: 2003

4. How long owned by current owner: since Oct’16

5. Cruising experience

*Years sailing: 20+, on and off.

*Nautical Miles Sailed: ~10,000nm prior to ownership; since ownership ~16,000nm;

*Cruising ground in past: Australia QLD; Med; UK; US East Coast; Caribbean; Central Americas; South Pacific

*Future Sailing Plans: South Pacific, expect 3,000 to 5,000nm per annum

6. Last Out of Water Survey: Oct’16

7. Any Insurance Claims

*Year: no marine or aviation claims (non-current commercial pilot); Automobile, 2010;

*Circumstances: other car merged into me

*Amount of claim: ~CHF10k

*Amount recovered: unknown; I simply paid the insurance excess (deductible)

8. Are you interested in participating in a group insurance plan or a self-insured plan for members only? Potentially YES,
       this EoI is to contribute to establishing an understanding of the baseline level of interest.

 

 

Understanding, based on quick read-though of the discussions:

Concept: covered only against total constructive loss @ 10% deductable; named tropical storm (subject to date/geographic limitations, and other caveats to minimise exposure) @ [30]% deductible; or lightning damage @ [30]% deductable (higher deductibles to 60% or even 80% for those making claims in known high-risk areas, such as Florida – basically, self-insuring against such risk in those known high-risk areas).

Annual premiums: [5] years buy-in “deposit” @ ~2.0% (~USD6k pa); thereafter annual top-up to cover annual losses due to claims plus annual contribution to cover operating/admin costs in order of 0.2% (USD600-pa).  New members do the same.  Co-insurance with underwriter to cover losses greater than [3] total-loss-claims in any given year.  Notional buy-out is 50% of deposits paid, with an final adjustment paid after a further 5 years’ fund operation –  that is, cash-value, not allowing for gains, such as interest received (and no refund of annual top-ups).  Adjustment of annual premiums / calls etc conducted like a real-estate body corporate (administering shared common property) with a “sinking fund” (making provision for known future potential expenses/risks, only some of which may, or may not, come to be realised).

 

Proposal: Insured value is range-based on a value determined by AMEL owners’ cooperative – with provisions for / based on existing known (blue-book) depreciation schedules, with variation for various states of upgrades / maintenance etc. – that is, could not insure a well-maintained and operated year 2000 SM for, say, USD500k; only within a range of, say, USD[250]k to USD[275]k, diminishing at, say, [3-5]% in dollar terms for exceptionally well-maintained (all to better than OEM spec); [5-8]% for well-maintained (all to spec); [8-12]% for maintained ‘mostly to spec’; [>12]% for maintained less than spec … or whatever – has to be simple to do (for an owner to both do and to prove), and to externally assess.

 

Concept expansion: built assets to cover worst reasonably foreseeable losses for [5] years running; say, [5] hulls per year, for [5] years, = 25 hulls at weighted-average of USD350k @ 90% payout figure =~USD8.0m to fund the insurance fund.  Basically, need to rapidly build to 250 hulls, each contributing 2% for 5 years, with no losses in the first 5 years (or with underwriting to cover any losses in the first 5 years).  Consider that.

 

 

From: <main@AmelYachtOwners.groups.io> on behalf of "karkauai via groups.io" <karkauai@...>
Reply-To: <main@AmelYachtOwners.groups.io>
Date: Sunday, 17 May 2020 at 3:22 pm
To: <main@AmelYachtOwners.groups.io>
Subject: [AmelYachtOwners] Insurance

 

Hi All,
Given the insurance problems everyone is having, I thought I'd see if there is enough interest and/or expertise to pursue an AYOG self-insurance program.
Pat (Shenanigans) and I have talked about it a little. Here's the gist of what we discussed:

1. A buy-in of some percentage of your boat's  value that would be enough to cover the first year.  For example, a $300,000 SM owner might pay 2% or $6,000. If we had 200 similar owners, we'd have $1,200,000 to pay out.

2. It would' be a high deductible coverage  designed primarily to pay for total loss. Maybe something like 20% of the boat's value.

3. The most common claim would probably be lightening damage, which often amounts to $50,000 or more.  Our plan might pay for half of a major claim like that?

4. Boat's would have to be out of the hurricane zones during the season.  Any other restrictions?

5. Yearly Assessments could replenish what was paid out  Or we could continue to pay in until the principle was self-sustaining. That would require investing the funds and a whole added layer of complexity.

6. A rotating Board of unpaid members would oversee the plan (maybe a LLC?), and an administrator would be hired to do the paperwork.

7. Owners would purchase their own liability insurance.

This is all just a very rough framework that can be built on, scrapped and something else adopted, or what ever seems appropriate.  Any and all thoughts and suggestions are encouraged. I'm hoping we might have an owner or two that have some insurance or legal expertise to help us understand the potential pitfalls and options available.

Thanks for your ideas.
Kent
Kristy
S M 243

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