Boat Insurance for Older Boats

Can you insure a 30-year-old boat? The answer is yes, but it’s a pain. Here are tips on how to minimize that.

Insurance: Can You Get It?

Can you insure a 30-year-old boat? The answer is yes, but it’s a pain. Here are tips on how to minimize that.

Maybe some of you read last month’s column on completing the Great Loop of America, and maybe now you’re thinking about doing it yourself. For lots of boaters, it’s a retirement dream: Sell the house, buy an affordable cruiser, take a year to mosey around the Loop, or maybe through the Bahamas or Down Island, then find a waterfront community with good weather, friendly inhabitants and affordable restaurants where you can catch rays, play shuffleboard and enjoy early-bird specials while awaiting the Grim Reaper. Sounds good to me, as long as the scythe-wielder doesn’t arrive until I’ve exhausted my IRA.

But there’s a fly in the ointment, and it involves insuring the boat: It’s not as easy as it used to be. If you’re wealthy, and can buy your boat with cash, stop reading here and go out and enjoy it: If something goes wrong, just write a check for the damage, and it won’t destroy you financially. You’ll need liability coverage if you stay at a marina of course—so instead, buy a waterfront mansion with its own dock. The rest of us though, have to carry insurance, something that’s getting more expensive and more difficult to obtain every year.

One thing I heard repeatedly while preparing this column was, “you can’t get insurance for a boat more than 20 years old.” This kind of talk is often just dockside blarney, but experts, most of them speaking off the record, confirmed it. (Getting insurance-industry folks to talk is harder than cracking secret codes at the NSA.) Insurance companies go by the numbers: A boat that was well-built 20 or more years ago, and is well-found, well-maintained and operated by a skilled skipper today, is probably no more accident—or liability-prone than a new boat, but lots of older boats are total crap, piloted by yahoos who ought to be under professional care. (So are some newer ones.) Most boats are somewhere in-between. How can an insurer know which group you belong to?

Insurers don’t exist to indemnify you from financial loss if your boat gets damaged; they exist to make a profit, and their profit goes down every time they have to pay a claim. Companies analyze data to identify where their losses are, and act to minimize their risk; if I were an insurance company, I guess I’d do the same thing. The number crunchers know that boats over 20, 30, maybe 40 years old, depending on who you ask, are prime loss centers—so many insurers won’t cover them. You’ll have to look harder for coverage. Brokers tell me they’re losing a lot of sales because of this and recommend arranging your insurance before even starting to boat-shop.

Stay Up North

There are more unknowns in the insurance equation than a boat’s age. There’s climate change, too. According to the Florida Fish and Wildlife Conservation Commission, Hurricane Ian “displaced” more than 7,100 boats when it struck the state’s west coast in September 2022, and damaged probably thousands more. (A “displaced” boat ended up somewhere other than where it was when the storm hit, often high and dry.) That’s a lot of insurance claims from just one storm, and those will cost marine-insurance companies millions, maybe billions, of dollars in the aggregate. Ian was an unusually powerful hurricane, but climatologists say storms will be getting more powerful, and powerful storms will be getting more frequent, as the climate changes. Even a “weak” hurricane can cause millions of dollars’ worth of destruction, so insurance companies are apparently figuring it’s time to leave the marine business while they still have a few bucks left in the bank. In the past couple of years, about half the insurance companies offering yacht and boat coverage—that’s about 12 out of 24—have dropped out of the market, finding better ways to invest their money. For those insurers still in the game, it’s a seller’s market.

Folks who boat in the hurricane zone have it worse than those in relatively safe northern climes, where boats are hauled in the winter. Insuring almost anything—boats, homes, cars—is more problematic in locales that can be razed by 100-plus mph winds and tsunami-level storm surges. Many insurers of northern boats suspend coverage if the boat travels too far south during hurricane season—officially that’s between June 1 and November 30, but some insurers consider November 1st as the end of storm season. The northern border of hurricane country is typically around 32 degrees North latitude—that’s Savannah, Georgia. Other companies use different limits: A spokesperson at one insurer I contacted, a company that advertises itself as specializing in covering classic yachts, said they would cover older, larger boats if the owner had the proper experience, but wouldn’t cover any boats larger than 26 feet south of North Carolina; no Great Loopers need apply. The take-away here is, shop around if you want to head south, and make sure you’re covered if you do.

Are you a Qualified Captain?

Among the most infuriating aspects of all this is, you’d think that by spending countless hours on the water and getting at least an OUPV/6-Pack Captain’s Certification (or an even higher-level cert) from the Coast Guard, you’d get a better insurance rate or at least easier qualification. But from what I’ve discovered talking both to brokers and watching interviews by other folks on YouTube (the Great Circle Association has several), having a captain’s license isn’t much help. One source suggested a tonnage license might help, but they’re harder to get and you need more documented sea time. I also investigated whether a well-kept logbook would help because it would at least show time underway. Same answer: No, because they’re easily faked. I guess the insurance companies are stricter than the Coast Guard.

So, while it probably won’t hurt to mention to an insurer that you have a license or have taken certification classes, apparently the only thing insurers really look for is boat ownership. Whether the boat ever leaves the dock seems to be less important than owning it, and, of course, never making a claim. Safety-wise, there is, of course, plenty of upside to getting a license, but don’t expect it to affect your insurance—or insurability.

Buy Another Boat—Now

And then there’s boat length. Folks buying boats of any age that are substantially larger—say, more than 10 or 12 feet longer—than the boat they have now might have to do some shopping. First-time buyers will also be challenged, even if they have experience on other people’s boats—insurers like to see a history of boat ownership, not boat crewing. The best way to combat this is to buy a boat you can insure, then move up, step by step, until you reach the size, or nearly so, of your retirement dream boat. (You want a bigger boat anyway, don’t you?) It’ll be easier to get insurance if you stay under the 10-foot jump and your new boat’s still a teenager. You’ll also become a better skipper. Handling a 45-footer is much different than handling a 25-footer, so move up in stages, learning as you go. Start when you’re young, and when you’re ready to retire and go cruising, you’ll either already have the boat or be qualified to buy and insure one.

There was also a time in the past when insurers might allow you get around the “ten-foot jump” rule by allowing an owner to carry a qualified captain with them for the first year or so of ownership while they learned to handle the boat. According to a broker I spoke with in Newport Beach, CA, that avenue has now also been closed.

If you already have a boat, you likely have insurance, so stay with that insurer. Don’t let your policy lapse, not even for one day; it’ll give the company an excuse to drop coverage or increase your premium, especially if you’ve made more claims than expected. Renewing or modifying a policy is easier than buying a new one; notify your insurer if you add substantial equipment to your boat, make extensive improvements, or if you want to leave your normal cruising grounds—if you want to do the Great Loop, for example.

And read your policy; there may be clauses in there that minimize the insurance company’s responsibility. For example, check the policy for depreciation of equipment. Some policies cover the hull for an agreed-upon amount, but past a certain age depreciate the equipment. Coverage might be replacement value up to 10 years, then losing 5 percent per year after that, for example. Should you run your 30-year-old boat over a spoil bank and pretzel the running gear (grounding is one of the most common insurance claims), you may not be covered at all, because of depreciation, when you thought you were fully insured. (If the boat sinks, you’re covered up to the agreed value.)

This happened to a friend of mine with his 28-year-old Tollycraft. His insurance company didn’t want to pay his claim after he whacked an unmarked rock; fortunately, he had the records from the boat’s previous owner showing the shafts, struts, props and rudders were less than 10 years old, thanks to a similar accident not quite a decade earlier. My friend’s insurance company then agreed to cover replacing the damaged gear. But the boat’s twin Caterpillar diesels and any other original equipment are no longer covered. Bottom line is, even if you get insurance, you might not have as much coverage as you think.

Shop Around

So what should you do? Take up golf? I guess that’s OK if you don’t mind wearing plaid, but I think a better plan is to find a reputable insurance broker and let them advise you—and do it before you start shopping for a boat, so you know the score up front. An experienced broker can be worth their weight in diesel fuel. Brokers sell insurance from many different companies and will work to find you the coverage you need. Agents work with only one company: BoatUS, for example, sells only GEICO insurance, so if the gecko doesn’t like you, you’re out of luck. Rather than calling agent after agent yourself, let the broker do the work—they probably know who to call in the first place. Don’t spend time and money boat-shopping until you know you can get coverage.

Once you own the boat of your dreams, protected by a good insurance policy, start planning your cruising life. Time waits for none of us, and sunny climes are beckoning. Don’t forget to work on your shuffleboard skills, too.

View the original article to see embedded media.

This article originally appeared in the February 2023 issue of Power & Motoryacht magazine.