Specialty Lines Markets

Watercraft

Insuring boats, personal and recreational watercraft, and yachts

by Larry G. France

“Four words for 2004: hurricanes, hurricanes, hurricanes … hurricanes,” said Cary Breese, ACAS, president of Trafalgar Marine Insurances Services, Inc. Breese explained that, put in the parlance of a catastrophe modeler, this was a “150-year event. In other words, statistically the odds of four significant hurricanes making landfall in one year are expected to occur only once in every 150 years. The impact to the yacht and boat insurance industry has been estimated to be approximately $680 million. This caused many marine insurers to reach their retention limits on their reinsurance treaties, thereby triggering their reinsurance coverage. Some of the larger companies hit their retentions several times due to the severity of this year’s storm season.”

After Breese made the above comments, the Midwest was hit with an unusual amount of snow in late December—in some cases approaching three feet. Several covered marinas in southern Indiana and western Kentucky collapsed. Initial damage is estimated in the millions. To paraphrase the late Everett Dirksen, senator from Illinois: “A million here, a million there, pretty soon you’re talking about real dollars.”

“As was true in the last hard market,” Breese points out, “the reinsurers are expected to drive price increase going forward. The market may expect a drastic reduction of underwriting appetite and, ultimately, capacity for risks in the Southeast. An interesting development to watch as the reinsurance contracts are renewed will be the West Coast rates. Marine underwriters and actuaries will have to make a business decision as to whether they fully reflect the reinsurance cost increases in the Southeast and only raise rates there, or spread the increases nationally.”

Breese notes that some markets may decide to become more competitive on the West Coast than before 2004 and may reduce rates, putting more pressure on the East and Southeast.

“The key to placing business in 2005 will be having the expertise to know exactly which companies offer the most competitive and appropriate coverage for each risk, wherever the risk is located.”

“The envelope please”—what will the 2005 reinsurance treaties bring? Markets have suffered great losses and some have already discontinued writing new business. “The watercraft market has been severely impacted by Florida hurricanes. Several major watercraft carriers suffered serious losses which significantly affected their reinsurance cover,” according to Joe Cecchini, CEO of Western Maritime Insurance Services. Cecchini agrees that the first-of-the year reinsurance decisions will give us an indication as to how the Florida hurricanes will affect rates on a national basis.

“The market currently is stable with no significant price increase anticipated, but only time will tell,” says Cecchini. Two factors that may impact future watercraft sales are the economy and fuel prices. Cecchini says that the watercraft industry is anticipating a 15% increase in sales for 2005.

“The marine insurance industry is still absorbing the impact of the storms and the reactions are slow in becoming apparent,” observes Timberlee Tamraz Grove, CPCU, president/COO of Markel American Insurance Company. “The response will likely range from a ‘no change’ to the most dramatic change, a withdrawal from the marketplace. Those with a status quo response are the well-positioned companies that have managed their exposures well and have reinsurance programs that support their strategy. They are looking at this as highly unlikely to happen again and are comfortable with their risk-reward positions historically. There is clearly justification and opportunity to take additional rate in any and perhaps all catastrophe-prone areas, and as the reinsurance industry will be taking increases, the primary carriers would be shortsighted not to ensure that the pricing makes sense going forward.”

According to Grove, taking more rate, increasing the storm deductibles and limiting new business will likely be the most common response. “There are a few carriers who have already taken measures to reduce exposures or completely withdraw from the marketplace,” she says. “Not too many will be interested in increasing their exposures accordingly, so unfortunately, there will be boat owners and yacht owners who will find themselves unable to meet their insurance needs.”

It will most likely be well into 2005 before the unclear picture comes into focus.

Upcoming specialty lines subjects include specialty lines annual focus in March; the hospitality industry—hotels, bars and restaurants in April; and special events—insuring promotions, contests, tourneys and prize indemnification in May.

The following have responded to our survey and indicated that they are a market for watercraft. Please note the target classes and classes not written for each entity.

Agency Marketing Services, Inc.
P.O. Box 67218
St. Pete Beach, FL 33736
Contact: John Coe, Michelle Horak, Jayne McKeehan
Phone: (800) 542-2805
E-mail: jcoe@agencymarketing.com
An E&S broker that operates in FL only with hull and P&I primary and excess limits of $5 million. Target markets are personal yachts, commercial, marinas, and dealers (excess P&I on personal watercraft). Will not consider commercial fishing or racing. Can offer boat repair, sales, manufacturing, storage/moorage, and marine cargo. All carriers are A rated.

American Reliable Insurance Co.
8655 E. Via de Ventura, Ste. E-200
Scottsdale, AZ 85258
Contact: Doug Ulery
Phone: (800) 535-1333
Fax: (480) 483-0797
An insurer operating in all states with hull coverage limits of up to $200,000 and liability of up to $500,000. Target classes are sailboats, inboards, outboards, inboard/outboard (pleasure use only). Will not consider speeds above 75 mph. Can offer personal watercraft, or replacement cost coverage. American Reliable is an A- rated company.

Atlass Insurance Group
1300 SE 17th St., Ste. 220
Ft. Lauderdale, FL 33316
Contact: Jim Gallaudet, Lorrie Nero
Phone: (800) 330-3370
Fax: (954) 525-0588
E-mail: jgallaudet@atlassinsurance.com
An E&S broker that operates in all states with limits of up to $50 million. Will consider boats of all types, sizes and values. Will not write speeds in excess of 90 mph or airboats. Can offer rental boats, charters, live-aboards, and extended navigation. All carriers are A rated.

Bruce V. Schneider Associates, Inc.
45 Middle Country Rd.
Middle Island, NY 11953
Contact: Craig Schneider
Phone: (800) 224-1707
Fax: (631) 698-6128
E-mail: cschneider@bvsainsurance.com
Web site: www.bvsainsurance.com
An MGA/E&S broker that operates throughout the continental United States with limits of $1 million (excess available) and unlimited on yachts. Target classes are sport fishers and incidental chartering. Can also offer pollution. All carriers are rated A+.

E&S Midwest, Inc.
1 South 376 Summit Ave., Court A
Oakbrook Terrace, IL 60181
Contact: David C. Steeb
Phone: (630) 620-3000
Fax: (630) 620-3001
E-mail: davidcsteeb@yahoo.com
Web site www.esmidwest.com
An E&S broker operating in IL, IN and WI with limits of up to $2 million. Target classes are private or pleasure boats with speeds of up to 100 mph, skippered or bare boat charter. Will not write cigarette boats or high-performance. Lloyd’s of London is the carrier.

Eagle Marine Underwriters
P.O. Box 1701
Orlando, FL 32802
Contact: Tom Cotton
Phone: (800) 444-6503
An agency/wholesaler that operates in FL only with various limits. Target class is private pleasure boats of all sizes. Will not consider charter boats. Can offer hull and P&I. Various carriers are used to place coverage.

Evolutions Insurance Brokers International (EIB International)
8722 Harrison St.
Sandy, UT 84070
Contact: Russ Sorenson, Nadine Guss, Missy Byrum
Phone: (877) 687-7342
Fax: (801) 304-5551
E-mail: russs@eibdirect.com
nadineg@eibdirect.com
melissab@eibdirect.com
Web site: www.eibdirect.com
An E&S broker that operates in all states with all limits. Will consider all classes. Carriers are Prime (B-), and Lloyd’s (A range).

Foremost Insurance Group of Companies
P.O. Box 2450
Grand Rapids, MI 49501
Contact: Call 800# (Foremost Agency Development)
Phone: (800) 237-6136
E-mail: signmeup@foremost.com
Web site: www.foremoststar.com
An insurance company that operates in all 50 states plus DC, with physical damage limits of up to $200,000 and liability of up to $1 million. Target classes are boats of 26 feet or less in length, and personal watercraft. Will not write boats longer than 26 feet. Can offer uninsured watercraft, trailer coverage, personal property, med pay, and towing/assistance.

Global Marine Insurance Agency
415 Munson Ave.
Traverse City, MI 49684
Contact: Matt Anderson, Pam Stanley
Phone: (800) 748-0224
Fax: (231) 947-4407
E-mail: matt.anderson@quotemyboat.com
Web site: www.quotecommand.com
An E&S broker and MGA operating in all states except AK, FL and HI with all limits for hull and liability. Target markets are all pleasure craft, except: antique/classic, charter and guide boats, rental fleets, small passenger vessels and high-performance boats. Can also offer med pay and personal property. A rated carriers include ACE, Markel, Zurich, St. Paul Travelers, Essex, American Modern, Old United and Middlesex Mutual.

Hull & Company, Inc.
2150 S. Andrews Ave.
Ft. Lauderdale, FL 33316
Contact: Donna Bowers
Phone: (800) 678-4855
Fax: (924) 524-0479
E-mail: dbowers@hullco.com
Web site: www.hullco.com
St. Petersburg, FL office
805 Executive Center Dr., W., Ste. 100
St. Petersburg, FL 33702
Contact: Theresa Proios
Phone: (800) 727-4855
Fax: (727) 579-9064
E-mail: tproios@hullco.com
Charlotte, NC office
14120 Ballantyne Corporate Pl., Ste. 525
Charlotte, NC 28277
Contact: B.J. Denton
Phone: (800) 241-5855
Fax: (704) 540-7611
E-mail: bjdenton@hullco.com
An E&S agent operating in all states with limits of $5,000 and up. Target markets are personal watercraft, small boats, yacht/mega-yachts. Can offer tenders, trailers, P&I, Jones Act, Longshore & Harborworkers Act, med pay, uninsured boaters, towing, and personal effects. Various A rated carriers are used to place coverage.

INAMAR Recreational Marine Insurance
1601 Chestnut St., TL 28D
Philadelphia, PA 19103
Contact: Peter Lafontaine
Phone: (215) 640-2609
Fax: (215) 640-5025
E-mail: recreational.marine@ace-ina.com
Web site: www.INAMARmarine.com
An insurer that operates in all states, with worldwide navigation available. Unlimited limits are available for P&I, as well as unlimited limits (special programs for more than $2 million) for hull. Target markets are boats, yachts, six-pac charter vessels, mega-yachts, sport fishing boats, ski boats, personal watercraft, boat dealers, marinas and yacht clubs. Watersports rental and bare boat chartered powerboats are not written. Other coverages include personal property, towing and assistance, USL&H, med pay, uninsured boater, pollution liability, wreck removal, salvage and expense, and defense costs. ACE/INA is rated A.

Irvin B. Green & Associates
5086 North Lane
Orlando, FL 32808
Contact: Tom Johnston
Phone: (877) 424-7336
Fax: (407) 295-5395
E-mail: tjohnston@ibgreen.com
An MGA that operates in FL only with limits of up to $100,000 on the hull value. Target class is runabouts. Will not write high-performance boats and airboats. Can offer package or liability only. American Banker is the A rated carrier.

John W. Fisk Co.
4833 Conti St., Ste. 200
New Orleans, LA 70119
Contact: Johnny Fisk, Terry Fisk
Phone: (888) 486-5411
E-mail: insure@jwfisk.com
Web site: www.jwfisk.com
A wholesale broker/E&S broker that operates nationwide with any limits required. Target classes are marine contractors, dinner cruises/sightseeing operators, and charter fishing boats. Will not consider commercial fishing vessels. Can offer marine GL, umbrella, and equipment. All carriers are A rated.

Marine Underwriters Agency, Inc.
P.O. Box 3667
Pawleys Island, SC 29585
Contact: Bob Kinsey, Mary Ann Thomason
Phone: (800) 631-2147
Fax: (800) 548-0501
E-mail: rrkinsey@sc.rr.com
An MGA that operates in the eastern 40 states with limits that vary by line. Will consider most classes but will not write high-performance. Can offer yacht, boat and PWC. All carriers are A rated.

Markel American Insurance Co.
P.O. Box 906
Pewaukee, WI 53072
Contact: Tom Conroy
Phone: (800) 236-2862, Ext. 3355
Fax: (262) 548-9448
E-mail: maicunderwriting@markelcorp.com
Web site: www.markelmarine.com, www.helmsmanyacht.com
An insurer operating in all states with the following limits: watercraft hull—up to $750,000 value and liability up to $1 million; and yacht—hull up to $5 million value and liability (P&I) up to $10 million. Target markets are: specialty marine—high-performance and ultra high-performance, including catamaran hulls, airboats, troubled operator, specialty and standard boats under 26 feet, and specialty commercial, including rental operations; and yacht—midrange yachts (26’ to 75’), owner-operated for pleasure use. Will not write large charter vessels with crew and PWC rental operations in FL. Can offer uninsured boater, med pay, towing, personal effects, tender, and rental reimbursement. Markel is rated A.

Midlands Management Corp.
3503 N.W. 63rd, Ste. 305
Oklahoma City, OK 73123
Contact: Sonya Purvis, Dewey Isham
Phone: (800) 800-4007
Fax: (405) 840-5432
E-mail: sepurvis@midman.com
Web site: www.midlandsmgt.com
Texas office
Phone: (888) 743-2228
Fax: (972) 588-2020
E-mail: disham@midmantx.com
An MGA that writes watercraft coverage in all areas except FL or the Gulf coast with limits of up to $1 million. Target classes are yachts, bass boats, boats less than 26 feet, and personal watercraft. Will not consider high-performance, or commercial use boats. Can offer fishing guide endorsement, or contaminant fuel spill endorsement. All carriers are A rated.

National Marine Underwriters, Inc.
P.O. Box 4636
Annapolis, MD 21403
Contact: John Beachley
Phone: (800) 262-8467
Fax: (410) 919-0511
E-mail: jbeachley@nmu.com
Web site: www.nmu.com
A managing underwriter that operates in all states except AK and HI with hull limits of $400,000 and liability of $500,000. Target classes are private pleasure and six-passenger charters. Will not consider wooden boats. Can offer personal effects, towing, and med pay. American Modern is the A+ rated carrier.

Old United Casualty Co., dba Vantage Casualty Co. in CA
8300 Shawnee Mission Pky., Ste. 120
Merriam, KS 66202
Contact: Douglas Semler, Suzanne Redden, Tim Bankston
Phone: (800) 866-6090
Fax: (800) 777-2628
E-mail: dsemler@vtaig.com
Web site: www.oldunited.com
An insurer that operates in all states except AK, FL and HI with limits of up to $300,000 depending on type of watercraft. Target classes are bass boats and walleye boats. Will not consider high-performance and antique/classics over 25 years old. Can offer med pay, uninsured boaters, personal effects, emergency service/towing, and underinsured boaters (yachts only). Old United is rated A- (operates as Vantage Casualty Company in CA only).

Pacific Specialty Insurance
3601 Haven Ave.
Menlo Park, CA 94025
Contact: Mark Preininger
Phone: (800) 828-3003
Web site: www.psic-onespot.com
An insurer (PWC only) that operates nationwide with limits of up to $500,000 CSL, physical damage on all makes/models. Can offer trailer coverage, watersports liability and med pay. PSIC is an A rated company.

Prime Insurance Syndicate Inc./I.E.B.S.
P.O. Box 4439
Sandy, UT 84091
Contact: any underwriter
Phone: (877) 243-8181
Fax: (877) 452-6910
E-mail: uda@primeis.com
Web site: www.primeis.com
An MGA (IEBS)/insurer (Prime) that operates in all states with all limits. Will consider all classes. Prime is rated B- and Lloyd’s is rated in the A range.

R.E. Chaix & Associates
41 Corporate Park, Ste. 310
Irvine, CA 92606
Contact: Jo Sargent
Phone: (800) 369-4337
Fax: (949) 722-4177
E-mail: jo@rechaixinsurance.com
An E&S broker that operates in CA with hull limits of $25 million and liability limits of $10 million. Target class is extended navigating, high-profile clients. Will not consider high-performance, personal watercraft, or live-aboards. Can offer private pleasure, charter, corporate-owned, pollution, uninsured boater, crew and passenger liability. The Northern Assurance, St. Paul Travelers and Lloyd’s are the carriers.

Robert A. Schneider Agency
5620 Smetana Dr., Ste. 225
Minnetonka, MN 55343
Contact: Jody Stolp
Phone: (800) 832-6038
Fax: (952) 838-0701
E-mail: rs@rasinc.com
Web site: www.rasinc.com
An MGA/E&S broker operating in MN, ND and SD with limits of $1 million. Target classes are high-performance, commercial, charter, rental, fishing, and tour. Can offer property and GL. Markel is the A rated carrier.

Russell Bond & Co., Inc.
295 Main St., Ste. 866
Buffalo, NY 14203
Contact: Jayme Kralick, Ext. 263
Phone: (800) 333-7226
Fax: (800) 677-6779
E-mail: jkralick@russellbond.com
Web site: www.russellbond.com
An MGA/E&S broker that operates in CT, MA, NJ, NY, OH, PA and VT with liability limits of up to $50 million and hull values of up to $20 million. Target markets are all types of watercraft including powerboats, sailboats up to 45 feet, speeds up to 60 mph (special rates for bass boats), liability only, corporate titled, multi-owner, and wooden boats. Will not write jet skis or houseboats. Can offer uninsured boaters, pollution/spill, towing & labor, water ski liability, personal effects, and miscellaneous equipment. All carriers are rated A+.

Seahorse Underwriters
P.O. Box 10265
Birmingham, AL 35202
Contact: Jake Hill
Phone: (800) 277-6698
Fax: (205) 581-9447
E-mail: jhill@mcgriff.com
Web site: www.seahorseunderwriters.com
An MGA that is admitted in all 50 states with hull value limits of $1 million. Target classes are pleasure boats and yachts. Will not consider charter or high-performance. St. Paul Travelers is the A rated carrier.

Ski-Safe/Sea Safe
One Hollow Lane
Lake Success, NY 11042
Contact: Howard Reiff, David Strauss
Phone: (800) 225-6560
Fax: same
Web site: www.skisafe.com
An MGA that operates in all states with P&I limits of $5 million ($1 million on PWCs), and hull limits of $5 million. Target class is all recreational watercraft including: PWCs, boats, yachts, high-performance boats, antique boats, bass boats, and older vessels. Will write liability only. Will not write commercial vessels. Can offer all-risk, agreed value water sports liability, equipment, tournament and club use. Axis Reinsurance is the A rated carrier.

Symons International Group (Florida) Inc.
2300 Glades Rd., Ste. 135E
Boca Raton, FL 33431
Contact: Jane Otto
Phone: (800) 275-4348
Fax: (561) 392-9719
E-mail: jotto@sigfl.com
An MGA/E&S broker that operates in all states, plus the Bahamas, Caribbean, and worldwide. Target classes are sport-fishing boats, antique/classic boats, passenger excursion vessels, six-pac charters, private pleasure yachts, boat rental (not personal watercraft), bare boat charter, go-fast boats up to 85 mph, and older more-difficult-to-place boats. Will not consider blue water, or personal watercraft (jet skis). Can offer passenger/crew liability, trailers, tenders, uninsured boaters, med pay, pollution, personal effects, and trip cover. Great American, AIG, Lloyd’s, and Great Lakes are the A+ rated carriers.

Trafalgar Marine Insurance Services, Inc.
18111 Von Karman Ave., Ste. 460
Irvine, CA 92612
Contact: Diane Carrillo (yachts)Leah Katz (commercial marine)
Phone: (800) 221-3884
Web site: www.trafalgarinsurance.com
An MGA that operates in all states except AK with hull limits of up to $50 million, excess liability of up to $50 million, and liability (P&I) of up to $10 million. Target classes are all marine risks, especially pleasure craft, marinas, boat dealers, and ship repairers. Will not consider non-marine risks. Can offer live-aboard, extended navigation, MOLL, SRLL and high-performance yachts. Carriers are ACE (A), AIG (A+), American Reliable (A), CNA (A), Essex (A), Fireman’s Fund (A), Great American (A), Markel (A), Navigators (A), National Casualty (A+), and Zurich (A+).

U.S. Insurance Services, Inc.
P.O. Box 47000
Jacksonville, FL 32247
Contact: Blair Fox
Phone: (800) 874-1738
Web site: www.us-insurance.com
An MGA that operates in FL, GA, NC and SC with limits of $300,000 CSL. Target class is personal lines up to 30 feet. Will not consider commercial or yachts. Can offer physical damage, uninsured boaters, and towing. American Reliable is the A rated carrier.

Western Maritime Insurance Services
4226 Coronado Ave.
Stockton, CA 95207
Contact: Commercial—Lelora Petersen, Watercraft—Sheri Geyer, Nancy Donaldson, Diane Deanda
Phone: (800) 633-3443
Fax: (209) 466-0260
An MGA that operates in 11 western states with liability limits of $5 million and property of $5 million. Target classes are sailboats, yachts, houseboats, and performance boats to 70 mph. Will not write extremely high-performance boats, or blue or brown water marine. Can offer several coverage extending/broadening endorsements. Old United Casualty (A-) and Starnet (A) are the carriers.

Western World Insurance Co.
400 Parson’s Pond Dr.
Franklin Lakes, NJ 07417
Contact: Timothy P. Hochkeppel
Phone: (201) 847-8600
Fax: (201) 847-1010
Web site: www.westernworld.com
An insurer that operates in all states with GL limits of $1 million/$2 million (no surety). Target markets are smaller, lighter risks (some white water risks). Will not write jet skis, waterskiing, diving risks, or ocean exposures. Can offer GL, property, and floaters. Western World and Tudor are rated A+. *