Top 10 Marine Insurance Claims

By Charles Fort

Presenting our third five-year analysis of the most common claims, slip-ups, and calamities. There are some surprises.

Boat collision damage

Way back in 2005, we first looked at the top 10 claims from the BoatUS Marine Insurance Program, and we revisited them in 2013. This will be our third look, and the files offered lots of woe from which to choose. Each time there are more events (hurricanes, snowstorms, marina fires) that change the ranking of claims. The vast majority of boat insurance claims fall into 10 categories, so knowing what they are and how you can avoid them makes it much less likely you'll find yourself in the top 10. For this review, we analyzed five years of claims, from 2012 to 2017.

Some interesting new findings: 40 percent of all of the claims filed in the past five years were for reimbursement of towing charges under the coverage provided by our BoatUS Marine Insurance program. However, we're excluding towing claims here, as we've done in the past, so we can more accurately compare to our last two top 10 analyses.

Some more observations over the last five years: While we had two major hurricanes last year, most of the previous years were less hurricane-intense. That allowed the "striking a submerged object" category to overtake "hurricane claims" as the number-one spot. These two flip-flop depending on how severe the hurricane seasons are. Hurricane claims, though, are not far behind, coming in second. "Collision claims" took the third highest spot, beating out the "wind and weather" category this time. One of the biggest surprises was that "lightning claims" didn't make the top 10 for the first time; the first study ranked them at number eight, the last one had them at number 10. In addition, "wake" and "theft of equipment" claims made the top 10 list for the first time. There were a few other position changes, but the takeaway is that now that lightning claims are off the list, and except for hurricane claims, every other category of claims is mostly ... avoidable!

Fortunately, over the past few years, we've put even more resources — including analysis of some of the top 10 categories — on our website to help you avoid becoming a statistic.

#10 Wake

2013 rank: N/A | 2005 rank: N/A

Boat making large wake

This is the first time wake claims made it into our top 10 list. Many of these claims are caused by boats being slammed into their docks from the wake of a passing boat. Extra fenders and proper docklines can often prevent hull damage in areas with large wakes. Mooring whips are another solution.

Other wake claims come from boats that are rafted together and a large wake causes them to crash into each other. While extra fenders may help, it's best to simply avoid rafting in places with lots of boat traffic. While not technically a wake claim, the most serious incidents from wake come from injuries to passengers who get thrown around (see "Injury Claims" below). Bow-rider boats tend to have the most injuries because anyone sitting in the bow seats is more likely to get tossed up (and land hard). In conditions with lots of wake, keep passengers farther aft to minimize the chance for injuries, and let your crew know if you're about to cross a large wake so they can hold on. If you happen to be the boat creating wakes, you should know that under the law, damage caused by your wake is treated exactly the same way as damage caused by a physical fiberglass-crunching collision.

To learn more see, "Boat Wake Damage Liability".

Injury Claims

The 2013 top 10 list included injury claims, and though they don't make the list this time, they're often the most costly. Settlements for injury claims can reach six figures, which is the reason why your personal liability coverage is so important.

Many injuries are from inexperienced passengers who may get tossed about in rough water or fall down a companionway. Make sure you brief newbies on where to sit on your boat and any potential hazards they may not know about.

If someone gets hurt, let your insurance company know right away, even if it seems amicable; some injury claims aren't made right away and after months have passed, it's much harder to investigate them. Many injury claims involve alcohol, an oft-discussed topic in these pages. Unlike in a car, a sober driver cannot guarantee the safety of impaired passengers on a boat.

#9 Theft Of Boat

2013 rank: 9 | 2005 rank: 9

Boat theft

While boat theft only ranks as number nine on our list in terms of number of claims, it's number one in terms of the average payout per claim. That's because when a boat is stolen, the claim is for the entire insured value. Even if a boat is recovered, there's often very little left that's worth anything.

Ninety percent of stolen boats are taken while on their trailers. Last year we analyzed boat theft and found that the most commonly stolen boat type was a runabout, less than 26 feet, on a trailer, with one or more outboards. Surprisingly, only about 15 percent of owners whose boats were stolen said their boat had any kind of lock installed. Many said they didn't think they needed locks because where they kept their boats seemed safe, but that thinking is often misguided. Your best tool for foiling the bad guys is frustration. Thieves are lazy, and anything you can do to increase the time or difficulty it takes to steal your boat will discourage theft.

To learn more see, "Analyzing Boat Thefts".

#8 Fire And Explosion

2013 rank: 5 | 2005 rank: 4

Boat fire

While fire and explosion make up a relatively small percentage of all claims in the past five years, the average payout per claim ranks high. That's because, like theft, fire or explosion all too often results in the total loss of the boat. Faulty wiring causes most fires; most explosions result from fueling issues. Inspect your boat regularly for chafing wires that aren't properly supported, and for corrosion of AC shore-power inlets. If you can smell gas, something's really wrong. Get everyone off the boat and have it checked immediately. Finally, make sure you have the proper number and type of working fire extinguishers aboard.

To learn more see, "Preventing Explosions Aboard" and "Boat Fires".

#7 Grounding

2013 rank: 7 | 2005 rank: 7

Sailboat ungrounding

Grounding ranks consistently at number seven no matter which way you look at it, across all three analysis. While some boats end up total losses from groundings, others escape almost entirely unscathed The most common boat to run aground is unsurprisingly monohull sailboats with their deep keels.

The appropriate charts — whether paper, electronic, or on a mobile device — and a depth sounder are your best defense against grounding. But a depth sounder's usefulness will be limited to confirming that you're indeed aground unless you know how to use it and how to plot your position on the chart. Once you're aground, waiting for the tide or a tow is often less likely to do damage than trying to power off.

To learn more see, "Running Aground Claims Analysis".

#6 Theft Of Equipment

2013 rank: N/A | 2005 rank: N/A

Boat equipment theft

Theft of equipment makes it into the top 10 for the first time and includes such things as stolen outboards and sterndrives, electronics, and fishing gear. Adding personalized markings to equipment can help identify and recover stolen items. By making them obvious, it also makes the items less marketable.

Avoid leaving a "for sale" sign posted all winter because it may attract the wrong kind of attention and gives someone an excuse to get aboard and look around. Store small outboards off the boat and use locks for larger ones. Sterndrive theft tends to be more common in storage yards so make sure there's adequate lighting and security.

To learn more see, "Avoiding Theft".

#5 Sinking

2013 rank: 2 | 2005 rank: 3

Sunken sailboat

The first rule of boating: Keep the water out! When that simple rule gets violated, the boat often ends up a total loss. In many cases, the dollars paid out for sinking claims exceeded the payouts from hurricane claims, even though they generate several times more claims.

Water most often finds its way in through those pesky holes below the waterline. Many underwater holes have a way to keep them closed when they're not needed — seacocks. But seacocks must often remain open, so it falls to lesser fittings like hoses and clamps to keep the water out. Check, squeeze, and tug on all fittings below the waterline at least once a season. Other causes for sinking include leaking stuffing boxes and clogged scuppers.

To learn more see, "Keeping Your Boat Afloat".

#4 Weather/Wind

2013 rank: 3 2005 rank: 6

Weather damage

These types of claims reflect the devastating storms of the last few years, with heavy wind and snowfall across much of the country in the winter and unusually active tornado seasons. Most of the advice on preparing for hurricanes applies to these other storms: minimize windage, tie your boat securely, and guard against chafe.

Unfortunately, for many of these storms you'll get considerably less warning than for a hurricane. So the best advice is to keep your boat in a well-protected place. Northerners can take a cue from their hurricane-prone brethren: Have a plan in place to visit and secure your boat when a storm threatens.

To learn more see, "Striking Lightning Facts".

#3 Collision

2013 rank: 6 | 2005 rank: 6

Boat collision

While this category ranks third, many BoatUS Marine Insurance claims are for relatively minor "fender benders." On the other hand, collisions with other boats are far more expensive than those too-close encounters with docks, pilings, and other stationary objects. (Note: Technically a collision is between two vessels, while an allision is between a vessel and a fixed object. For this discussion, collision incorporates both.)

Most collisions result from some combination of three factors: inattention, blind spots, and too much speed. Inattention includes leaving the steering to the autopilot. Misunderstandings of the "Rules of the Road" also play a role. The underlying tenet is that you should do everything you can to avoid a collision, even if you ‘re the "stand-on" vessel. You won't go far wrong if you do whatever is necessary to avoid a collision and make obvious course changes early.

To learn more see, "Avoiding The Video-Game Syndrome" and "Navigational Hazards Or A Hazard To Navigation?".

#2 Hurricanes

2013 rank: 1 | 2005 rank: 1

Hurricane damaged sailboat

During the five years we analyzed, there were fewer major hurricanes than the previous five-year period. But last year there were two big ones — Harvey and Irma — and those had claims numbering in the thousands. Little wonder hurricane claims were near the top of the list yet again. Fortunately, many of our members did their best to secure their boats, and our BoatUS Catastrophe Teams were on site within hours. These helped to keep the damages from being worse.

The time to begin hurricane prep starts long before hurricane season with a well-thought-out hurricane plan. Find out what your marina's hurricane plan is before the season starts — does your dock contract call for you to take certain steps? For more on hurricane prep, visit the BoatUS Hurricane Tracking and Resource Center.

To learn more see, "A Guide to Preparing Marinas and Boats for Hurricanes" and "Chafe Protection in Storms".

#1 Striking Submerged Object

2013 rank: 4 | 2005 rank: 2

Hull outdrive damage

Severe droughts are often the cause of these increasing claims. Until winter 2016, much of the west experienced the lowest water in history, causing lots of contact with all manner of things in and just under the water.

Unlike fire/explosion and theft, hitting something below the water rarely results in a total loss. But don't let the claim turn into a sinking. If you hit something, stop and check the bilge for leaks. When you get back to the dock, check again, thoroughly. Any water could mean serious damage, and a haulout (covered by insurance, but notify BoatUS Marine Insurance first) is in order.

To learn more see, "Striking A Submerged Object Claims Analysis". 

— Published: August/September 2018

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