We have offshore boat insurance. We originally needed boat insurance because we financed our first boat. See Boat Financing – Do You Need It?
In 20 years of cruising we have had 2 claims. Total damages about equal to the value of our boat. None of these incident was ruled to be our fault. Our insurance company paid us, and they went after the party at fault and got their money back with interest.
If we had not had boat insurance our cruising days would have ended long ago. Our story is not unique. We know of many boats that have been damaged by other boats, or damaged in yards, or damaged as a result of faulty gear. The only cases that I know of where the people got reimbursed for anything more than minor damages is when they had boat insurance.
Another boat we cruised with had their mast fall down off Australia. Their insurance company paid 1/3 the value of the boat for repairs, and went after the manufacturer, claiming that because the mast was deck stepped and single spreader, the design contributed to the failure – it was not redundant enough for offshore. The owner got a new mast and sails, re-rigged with double spreaders.
Cruisers without insurance are a risk to other cruisers. A number of boats we know of have been hit by other cruisers and damaged. In most cases the offending boat has fled without making repairs. In one case a small boat was left dismasted offshore as the offending boat fled without rendering assistance. We have been hit twice at anchor by other cruisers.
In the Pacific, 1 in 8 cruisers out for 2 years or more lose their boats to reefs (Dashew). In our case I feel we have been very lucky not to have lost the boat in 20 years. We have hit reefs. It is very easy to do.
The charts are old, inaccurate, and the visibility is often poor. If you stay out long enough and travel far enough you will hit a reef. We were lucky in all cases. The tide and sea-state were in our favor and our metal hull minimized damage. Lots of other boats have not been as lucky.
At some point in time you may need to make a decision to leave a boat stranded on a reef, rather than risking your life and the life of the crew to save her. Even if your life is not at risk, usually when you leave a boat stranded to seek help you will return to find the boat stripped.
Not all insurance is equal. It pays to shop around for rates. Equally, check the company’s reputation. There are reports of some companies collecting premiums but not paying when there is a loss. These reports need to be examined with an open mind. Boats have been scuttled for the insurance and it is understandable that insurance companies are on the lookout for this.