The Price of Passing on a Policy

Damaging events don't have an off-season. Make sure your insurance is up to date.

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Your boat is tucked snugly away in a warehouse or garage, or perhaps it’s riding out the winter layup in a marina slip. It’s safe, it’s secure. You’ve winterized it properly, and no one will be using it for weeks or even months.

Your insurance carrier’s boat or yacht policy spans 12 months, but it’s coming up for renewal soon. Why not let it lapse, right? You can always rewrite it later on, when you’re ready to launch for the new boating season. But boater beware. Taking such action could place you in a chasm where you’re putting your financial and emotional investments at risk. Don’t be that guy. Read on and find out how you can exercise appropriate caution and diligence during the off-season.

As Todd Shasha, managing director of personal insurance for boats and yachts at Travelers Insurance, pointed out, perils don’t go away with navigation.

I’m Not Going to Use My Boat —What Could Possibly Go Wrong?
As it turns out, plenty.

During the off-season, particularly during a strong El Niño year like this one, weather can be a major adversary. Heavy snow can collapse the roof of storage sheds, garages and warehouses. Tarps can collapse under the weight of snow, and they can tear in wicked winter gales.

1 / Weather
“A couple of years ago, there were ridiculously heavy snows in parts of the country,” said Rick Stern, boat product manager for Progressive. “People were shoveling off their roofs. We saw a lot of claims where the owner thought he had a secure shed until that winter, when the roof collapsed and crushed the boat.”

Then there are trees. If the ground is saturated or if there is an ice storm, even mature trees can fall. If you’ve parked in an unlucky spot, you may face severe damage. And of course fire, theft and vandalism are possibilities regardless of season.

“Another off-season risk factor is freezing temperatures, which can cause significant damage to a boat, its engine and other components,” said Damon Hostetter, senior vice president for ACE Recreational Marine Insurance (which was in the process of acquiring Chubb at press time). “Freeze losses often occur in states not typically associated with cold weather — there are a surprising number of freeze losses in California.”shutterstock_129244289 copy

2 / Critters
Tom Conroy, marine director for Markel Insurance, recalled three memorable off-season claims. In one, an owner took his boat to a storage facility for the winter, and while it was parked outside, vandals had a field day with it. In the second, the boat was parked safely in the garage — until a kitchen fire burned the house, garage and boat to the ground. Then there was the third, a scenario many boaters don’t anticipate.

“While the boat was stored under a tarp, rodents chewed the electrical wiring and made a nest in the engine,” Conroy said.

Vermin can be a huge headache, and they’re yet another reason to avoid putting your insurance policy into hibernation along with your vessel.

“Think about a family of raccoons,” Stern said. “The damage they can do to the interior is crazy. To replace upholstery, woodwork, carpeting — it’s very expensive and time-consuming.”

3 / Other Worries
Not only could a roof collapse, a fire ignite or vermin take up residence, but the weight of the snow on a boat stored outside could cause the vessel to tip over. A boat on inadequate blocks or stands could tip, too.
And, if your boat spends its off-season afloat, you’ll have a separate set of worries. Sinking at the dock is far more common than you might imagine. Batteries and bilge pumps fail. Hoses and seacocks freeze. Lines fray. Tarps become tattered in heavy winds and are vulnerable to UV damage.

Snowbirds share some of these concerns when they leave their boat and yacht in a Southern California or Florida marina all summer while they enjoy the Great Lakes or the Pacific Northwest

“They also need to be aware of the risks presented by vermin, water and weather,” Stern advised.shutterstock_106140920 copy

Critical Questions Before Going Into Layup
Clearly, you’ll want to be as prepared as you can be. Having an insurance policy is job number one, and you’ll want to ask your agent a few key questions.

First, find out if you can add a winter layup period to your policy. You may be able to take advantage of credits or reduced rates while your boat is unused.

“This layup period generally will allow customers to reduce their premium cost while maintaining the necessary insurance to cover many claim situations, including fire, theft and others,” Hostetter said. “In exchange, the boat owner will not be permitted to navigate his or her vessel during the layup period or use the yacht for liveaboard purposes.”

That means you’ll also want to find out when the boat needs to be hauled from the water in the fall, and when it can be launched in the spring. You don’t want to take your vessel out on a beautiful April day only to find out that your layup period doesn’t end until May.

Another word of caution: Typically, layup provisions apply to yacht policies but not to those for boats or personal watercraft. Shasha explained this is because insurers feel boats will generally not be used during the winter and off-season months in areas with cold, inclement weather. Premium costs likely will be less than in warmer geographic areas where boats and PWCs are used year-round. Usually, without layup provisions, these boats and PWCs can be trailered to warmer parts of the country and enjoyed there.

Next, find out if your policy excludes ice and freezing damage unless the boat is winterized by a professional, and ask yourself if you are capable of winterizing your boat correctly. If you’re at all uncertain regarding your DIY abilities, find a service provider and secure a contract that will reflect the work done.

“Make sure winterizing is done correctly,” Shasha said. “It’ll help with your claim if something goes wrong, because the insurer will know you fulfilled your end of the deal and will go to the marina or service provider.

It’s so important. For example, with the value of outboards today, rectifying a winterization mistake can be very expensive.”

And, ask if your carrier will cover critter damage. Some will, but not all.

“We have a specialized claims group, and many are boaters themselves,” Stern said. “We look for the facts of the loss first to determine what happened and why it happened. If the boat has a fitted cover, we’ll cover rodent and vermin damage. If it’s clear w2interizing was done correctly, we’ll cover damage related to that. And if you live in part of the country where winterizing isn’t customary and you have experienced a hard freeze, don’t worry. We’ll cover those losses because you couldn’t have known that would happen.”

Conroy emphasized the importance of reading your policy’s fine print and talking with your agent about when and where you’ll use your boat. “Then the coverage can be adjusted to fit your needs, and you can get the best rate possible,” he said.

Layup Tips from the Experts
“People have a fairy-tale view of boating,” Stern said. “They think of boats like cars — one oil change per year, and you’re good. No. If something goes wrong with a boat, it’s not a matter of just being stuck by the side of the road. You’ve got a much bigger problem.”

That means boaters need to exercise the same attention to detail during the off-season they would at the helm. Boats are vulnerable to 18-degree weather for weeks at a time, just as houses are. So, winterize effectively, and check on your boat often. If you can’t do it on a regular basis, enlist the help of someone who can — a family member, a friend or marina staff.

Monitoring the vessel is especially important if it’s spending the off-season on the water.Capture 1

“Be sure it’s properly covered, the batteries are charged, the bilge pumps work, and that it’s stable, given the action of tides, ice and the marina’s bubblers,” Shasha said. “If you don’t have time to check, assign the task to someone who can. Otherwise, out of sight, out of mind.”

Hostetter concurred, noting that it’s extremely dangerous to put your boat into layup and then ignore it throughout the winter months, assuming that everything will be fine.

“It’s a good idea for boat owners to visit their boats at least every few weeks to ensure no problems are developing, make certain all covers are in place and check for rodent infestation,” he said. “Rodents often like to find warm homes for the winter in boats.”

“It’s always a sad day for boaters when it’s time to pull the boat out of the water and begin the winter storage process,” Conroy said. “But if you follow a set procedure for winterizing, you’ll be ready to get back on the water when spring arrives. Meanwhile, you’ll have a boatload of good memories to carry you through.”