Record boat damage driving up insurance - Soundings Online

Record boat damage driving up insurance

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Hurricane season 2005 was costliest on record for boat owners, with $1 billion in pleasure boat losses

Hurricane season 2005 was costliest on record for boat owners, with $1 billion in pleasure boat losses

The 2005 hurricane season racked up just about a billion dollars in recreational-boat damage, making it the most costly hurricane season on record for boat owners, according to insurance provider BoatU.S.

BoatU.S. reported $252 million in pleasure boat losses from Hurricane Wilma, which on top of $650 million to $750 million from Katrina and a “negligible” amount of damage from Rita brings the season total to between $902 million and just a little more than $1 billion.

Hurricane season 2004’s $680 million in boat losses from hurricanes Charley, Frances, Ivan and Jeanne had been the highest tally, followed by $500 million from Hurricane Andrew in 1992. BoatU.S.’s estimates don’t include commercial-boat or marina losses.

“Now they’re saying 2006 is going to be like this last year,” says Scott Croft, spokesman for 575,000-member BoatU.S., which sells insurance and other services. “We can expect another bad year for storms.”

Croft says two consecutive years of record boat losses and forecasts of more active hurricane seasons ahead are driving up boat insurance rates. “This is trickling down to boaters, and the rates have gone up, unfortunately,” he says. “We’ve had six or seven ‘biggies’ [hurricanes] in the past 36 months. We haven’t stopped writing policies, and we won’t stop writing them like some companies have, but we have to have the reserves.”

Croft says BoatU.S. has increased the deductible for claims resulting from named storms to 5 percent of a boat’s insured value. One of the reasons for doing that is to get more boaters to take steps to secure their boats before a hurricane or tropical storm hits. Croft says BoatU.S. encourages owners to get their boats out of the water and to higher ground by offering a $500 storm haulout reimbursement. It also is trying to get absentee owners — those who may keep their boats in a hurricane zone but live elsewhere — to plan for someone to secure their boats when a hurricane threatens. “If you have to, pay somebody to do it,” Croft says.

He says if a boat is in the direct path of a storm like Katrina, the preparations may not do any good, but in lesser storms they will.

“Precautions need to be taken,” he says.

BoatU.S. also estimates Hurricane Katrina destroyed 75 percent of the marinas along 150 miles of coast in Louisiana, Mississippi and Alabama. Most repair yards near ground zero were demolished, and BoatU.S. was giving its insureds a transportation allowance to truck their damaged boats to Florida, the Carolinas, Texas, even Chicago for repairs, according to Carroll Robertson, senior vice president of claims for BoatU.S. Marine Insurance.

Cruising guide author Claiborne Young of Elon College, N.C., concludes from a survey he did of marinas and boatyards affected by Katrina that between Mississippi Sound and New Orleans nearly all the marinas and boatyards are out of commission for the season.

“I don’t know of any marina currently operating at anywhere like full capacity [from Biloxi, Miss., to New Orleans], though some may be limping along at reduced capacity,” he says. “I am recommending that no one even consider cruising west of Mobile Bay until at least next spring.”

He says it appeared most marinas and boatyards on Mobile Bay were back up and running at full or reduced capacity by mid-October, adding that the Tennessee-Tombigbee Waterway was largely unaffected by Katrina.