Insurance Adjusted

Having the right coverage while traversing waters near and far is a breeze, with proper planning.

Navigating familiar, close-to-home waters can be challenging at times, but doing so carries with it a sense of familiarity and comfort. It’s when plans call for breaking through the imaginary border separating one’s home waters and the personal unknown that things change. More research. More planning. More prepping. More expectation. That’s the kind of stuff boat owners can handle.

What about one’s insurance policy? Is it prepared to handle an extended cruise to unfamiliar waters? While restrictions still exist regarding specific countries and time-of-year cruising, boaters can easily make the adjustment and simply chart a different course as provided within their respective insurance policy.

We thought of some questions boat owners need to ask before embarking on a cruise outside of their home waters and posed them to insurance industry experts. While this Q&A will certainly get boaters pointed in the right direction, it’s no substitute for policyholders talking to their agent and making sure everything is in order.

Q: What do I have to do to expand my cruising area, at least temporarily?
A: That’s going to depend on what your insurance policy provides, so the first step is to brush off the cobwebs and take a look. Then you may have to call your insurer. However, it may be simpler to address the issue right up front when purchasing a boat policy. Today, the factors used to provide a “cruising area extension” are generally as follows:
– Size and type of the boat, and its condition
– Number of engines and safety gear aboard
– Where you are going and for how long
– The experience and number of crew aboard

Some insurers require getting an extension every time you depart your policy’s designated cruising area. If you have a large vessel and are planning to leave your defined cruising area, you will likely need to make contact with your insurance company to secure a “cruising area extension,” which is technically an “endorsement.” This will add a nominal premium.

Regardless of boat length, if you plan to leave U.S. or Canadian waters and head to Mexico, the Bahamas and the Caribbean, nearly all insurance companies require notification before they’ll give you an extension. Again, these typically do not cost that much.

A special note for California boaters who frequent Mexico: They may want consider carrying an extended cruising area policy endorsement throughout their entire policy period, which makes it easier to come and go as they please.
— D. Scott Croft, vice president public affairs, BoatUS

Q: How flexible can insurance companies be if plans change?
A: Some companies can change the navigation on a pro rata basis, so you only pay for the additional coverage for the time you need. However, not all companies are flexible. Make sure any navigation change is confirmed in writing by the insurance company.
— Cary R. Weiner, president, Pantaenius America

Q: What are the potential snags to cruising coverage?
A: Most underwriters understand that plans can change. Presenting a new float plan and proper crew is most important when making changes. If the owner has no experience in the area he might want to navigate, and his crew is also inexperienced, that could be a reason for an underwriter to refuse to make the change.
— Gary Clausen, Twin Rivers Marine Insurance Agency

Q: What are the basic expectations (of the boat, of the owners’ experience, etc.)?
A: Insurance companies want to ensure everyone makes it home safe, and they recognize that all requests for a cruising extension are not the same. For example, going for a long weekend in Ensenada isn’t the same as running down to Puerto Vallarta.
Your insurance company will likely need crew information, including their experience, the type of cruising, whether the cruise will be solo or crewed, or if you are traveling with a group. They’ll also need to know the boat’s capabilities, such as the number of engines and navigational equipment; types of safety gear, such as harnesses, EPIRBs, radar reflectors, MOB gear and life rafts with capacities; and/or rigging and sail condition. They may ask for a rigging or sailing inspection to ensure the vessel in good condition.
If you don’t get your extension, ask your insurer why and see if there are other actions you can take to get them to a “yes.” — Croft

Q: What else should policyholders know?
A: I would simply advise them to contact their broker well in advance of doing the extended cruising, and the broker should be able to give them advice on whether or not they will be able to get the navigation extension, what the specific requirements would be and what, if any, additional premium would be charged.

On the East Coast, most of the restrictions are based on whether or not the insured wants to be south of approximately North Carolina during hurricane season. Outside of hurricane season, it would be fairly routine to extend coverage for Florida and the Bahamas; however, if the vessel will remain south during the storm season, there are often additional requirements, such as a hurricane plan; with larger vessels, a full-time captain may be required.
— Dave Kauffman, president, Anchor Marine Underwriters Inc.

An expectation of the insured would be that the carrier is able to assist with their requested scope of navigation and provide all necessary information required to amend the policy upfront, without going through hoops.
— Janet Bianco, senior vice president, Pantaenius America

Some policies must be written in the state in which the boat is kept for the majority of the year. For example, a boat that is used in North Carolina for seven months and Florida for five months must be written on a North Carolina policy. The boat can then be used in both states and anywhere else in the U.S. or Canada.
— Rick Stern, boat product manager, Progressive Insurance

BoatUS offers these seven tips for boat owners considering pursuing a cruising extension:
1. A large number of “multiline” (car/home/boat) insurance companies only offer extensions for U.S. and Bahamian waters. Owners cruising outside these regions in the future will have better luck with a marine specialty insurer.
2. In the Caribbean, Nov. 1 is the kickoff of the cruising season, which runs through June. During hurricane season, most insurance companies will require the boat be brought back to home waters or stored on land. Owners who choose the latter should be prepared to answer questions about their boat’s hurricane plans, such as its location (above mean high tide), how it’s secured to ground and who is responsible for its care in their absence. The Alaska and Nova Scotia cruising seasons traditionally begin May 1.
3. For offshore passages, some insurance companies require a minimum of four or five experienced crew. For older owners who may have physical limitations, insurance companies also like to see a balanced crew.
4. Offering safety in numbers, rallies and regattas can be an opportune time for a novice to get a “foot in the door” on long-distance cruising. They also offer formalized safety planning and a highly organized approach that is appealing to first-time cruisers.
5. Have a safety equipment list ready when applying for a cruising extension. The basics include an EPIRB, electronics (SSB radio, radar), a life raft, harnesses and select spare parts.
6. Some insurance companies will require a “condition and value” survey, a rigging survey or an engine survey before they will issue an extension.
7. Boaters who go into Mexico will need a special Mexico Liability policy in addition to their boat insurance policy. This is true if they drive there by car, RV or on the water by boat.

TO THE WEB (Twin Rivers Marine Insurance Agency)