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The subject of cover for claims arising from tropical storms in the Caribbean and US coasts has come under the limelight since the industry took a beating following Hurricane Ivan in Grenada (2004) and other hurricanes (especially Katrina) in 2005. There seems to be growing evidence that, as a consequence of global warming, there is a trend towards a greater incidence of tropical storms of greater severity each year. Prior to Ivan, most insurers defined a "box" by latitude and longitude limits, and excluded all claims for damage arising from named tropical storms within this box during the accepted hurricane season, normally 1 July to 31 October, but often extended to 1 June to 30 November. Box limits varied slightly between companies, but this clause had the effect of concentrating the boats laid up during the hurricane season to Grenada and Trinidad. Grenada had not had a hurricane for 48 years when Ivan struck, but when it came it caught about 800 boats there, and a very high proportion were badly damaged. The resultant claims severely tested the insurers as well as the local repair facilities.


Post-Ivan, the insurers are all reviewing their "hurricane clauses". One approach (Pantaenius) is to scrap the "box" and time limits, and to exclude all claims for damage arising from named tropical storms (anywhere, anytime), unless the boat is either at sea or laid up ashore in a one-piece steel cradle with the boat and cradle tied down to secure ground anchors. Others are merely extending the box and time limits.


"Al Shaheen" is insured with Pantaenius, and has been since new. This choice is based primarily on a (personally tested) knowledge that their claims settlement record is excellent; that they are the market leader in the sector in which we operate; that their policy wording is comprehensive, open and straightforward without being couched in obscure "legalise" and that they will listen to the customer! Cost is obviously a factor, and Pantaenius, whilst in our case being somewhat dearer than the competition, are not significantly out-of-line.

Insurance of small marine craft is a complex, and often expensive, matter especially when one moves away from the established NorthWest Europe cruising area. There are usually two components; insurance of the boat (hull insurance) and third party liability. Of the two, third party cover is normally straightforward and relatively cheap even for the "standard" £1 or £2 million cover necessary to cover against claims from commercial shipping that one might become involved with. Many European insurers will reduce this standard limit when cruising in a USA jurisdiction, for fear of excessive liability claims. However, most prudent yachtsmen carry this level of third part cover, costing in the order of £100 per year.


On the other hand, hull insurance is at least an order of magnitude more expensive. Many "live aboard" yachtsmen, especially those on less costly or older boats, choose either not to insure or to "self insure" simply because they cannot afford, or justify, the premiums. However, when your boat represents a significant part of your total assets, there is no choice but to insure. In this case, the cover needs to be first class and you need to have the comfort of knowing that, in the event of a major claim, the Insurer will deal with it quickly, efficiently, fairly and without hassle, argument or "nit-picking". Unfortunately for many owners, several major European Insurers failed badly in this respect over claims following the major losses brought about by Hurricane Ivan in Grenada in 2004.


Outside the established European cruising limits, the issues which cause the Insurers to increase rates are: their ability to service claims in remote locations; the lack of adequate repair facilities and skills for sophisticated modern boats in remote areas and the risk of damage arising from tropical storms. Other issues which may affect the availability of cover, especially for long ocean passages, are the number, experience and age of the crew as well as the age and condition of the boat.


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