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Specialty Lines Markets Recreational vehicles Fun on land and water By Larry G. France TOYS! Yes, toys are our Specialty Lines subjects this month. Everything from snowmobiles, to motor homes, to yachts and pleasure boats. Toys are for fun and enjoyment. That also means they are not a necessity. That being said, if gasoline prices rise dramatically, the economy slows and interest rates skyrocket, toys may not be in the budget. “We think of recreational vehicles as a broad class of business that encompasses many of the toys that consumers buy to use in their leisure time,” says Jim Griffith, deputy director of personal lines for Burns & Wilcox. “With interest rates being relatively low over the past several years, there certainly has been an upswing in recreational vehicle sales and correspondingly in the need for insurance.” Griffith adds, “As with many personal lines products, we see the continued soft market in many parts of the country as a factor in how much recreational vehicle business we can expect to write. With standard specialty markets aggressively looking to gain market share, wholesalers need to continue to leverage underwriting flexibility and expertise, ease of use, and in many business instances, competitive pricing as advantages to achieve growth.” Who is the target for this class of business? “We all know those people who are constantly searching for adventure. Those people with the best stories, the people who make life more exciting and love to explore. People who enjoy the open road of life,” says Nick Weaver, communications specialist at Foremost Insurance. “RV enthusiasts don’t wait for adventure. They make it happen. They go out and look for it. For some, it might be the highways and big time attractions, for others, it might be the peace and quiet of the road less traveled. But RV owners have one thing in common—they have passion for the road.” Weaver continues that the surprising thing to some about motor home and travel trailer owners is “they also own other vehicles common to the outdoor lifestyle. One in five RV owners also owns a boat and a similar percentage owns a motorcycle or ATV. Most own a site-built home or modular home.” Sounds a like a cross-selling opportunity. Underwriting ebb & flow Predictions of another bad hurricane season in 2006 were way off and that saddens no one. “As recently as May 2006, the prediction was for five major hurricanes to form in the Atlantic basin during 2006 and for an 82% probability of at least one major hurricane making landfall,” according to Cary Breese, ACAS, president/CEO, Trafalgar Marine Insurance Services. Breese says, “Despite the expert predictions, we experienced only two major hurricanes, and zero major hurricanes made landfall. Even the two barely achieved major status, realizing their full strength at only Category 3.” But that didn’t deter worried underwriters of marine insurance in hurricane-prone areas. “Due to the recent hurricane activity and predictions for future catastrophic natural disasters, marine insurance in the Gulf is getting more difficult to place, with many companies restricting their underwriting criteria to stay away from boats over 30 feet and $100,000 in value,” observes Jake Hill, director of sales/marketing at Seahorse Underwriters. “Meanwhile, the market in the North and West is becoming increasingly competitive with rock-bottom pricing. Agents in these areas are looking for a quick and easy fix for their boat customers because most companies are going to be in the ballpark in regard to pricing. The objective is usually to find an A-rated market with a good policy and get the customer a quote quickly before they go somewhere else.” Matthew R. Anderson, marketing director at Global Marine Insurance Agency, agrees: “The 2007 outlook for pleasure boat coverage is for pricing to fall in the non-coastal regions of the United States, possibly in the 5+% range. After a strong year of underwriting results and minimal hurricane losses, insurance companies will be looking to grow in non-CAT prone areas. “The pricing in the Gulf Coast, Florida and Carolina regions, with respect to boat and yacht premium pricing, will include small increases or possibly flat in some areas. The capacity in all of these areas will remain very tight with domestic insurers unwilling to take on additional cat risk. There appears to be some additional capacity with nonstandard/surplus lines carriers interested in some portions of the market.” Trust, but verify Another concern with expensive toys is the potential for fraud. Craig Schneider of BVSA Marine Insurance relates one story that followed the New York Boat Show where his company had exhibited. “I received a phone call from someone who said he had stopped by our booth but did not have time to talk. Having our business card, this individual was now approaching us to secure insurance for a $750,000 yacht he had just purchased. We secured all of the information necessary to obtain several quotes.” The applicant then pushed for coverage to be bound. However, when the Bill of Sale was received, “the Hull ID number was clearly listed, but the engine serial numbers were not identified. Additionally, no sales tax had been charged, just a clean $750,000 total amount identified.” BVSA then called the boat dealer involved and found that a sale had never been made and that the yacht was still sitting in the manufacturer’s showroom. Schneider notes, “The application had requested a particularly broad navigational area. It is possible that the policy would have been bound, a 30-day grace period would have been given to secure the BOS documents, and within that period, a total loss claim submitted.” This demonstrates the necessity to obtain all information. It isn’t just buyers who have to beware. Underwriters need to be equally wary, especially when expensive “toys” are involved. For additional information go to www.insurancemarketplace.com regarding recreational vehicles. Upcoming Specialty Lines articles will address Special Events, Prize Indemnity and Weather Insurance in April; Social Services in May; and Travel, Leisure and the Hospitality Industry for June. Arlington/Roe & Co., Inc. An MGA/wholesale broker operating in IL, IN, KY, MI, OH and TN. Target classes are off-road vehicles, boat/watercraft rental and guides and outfitters. Capitol (A), Fireman’s Fund (A), Nautilus (A+), and Western World (A+) are the carriers. Bruce V. Schneider Associates, Inc. An MGA/E&S broker/agency that operates in the 48 contiguous states with limits of $1 million - $5 million with excess available. Will consider all marine-related risks, both private and commercial. All carriers are A rated. Burns & Wilcox Ltd. An MGA that operates in all 50 states with limits on watercraft (boat) liability of $5 million; any limit on yacht hull coverage. Target classes are pleasure use classes of all types and small charter boats. Will not write commercial watercraft or large chartering operators. Can offer trailer coverage. All carriers are rated A or higher. The Colonial Group, Inc. An MGA that operates in GA, NC, SC, TN, VA and WV. Target classes are motorcycles, ATVs, golf carts, watercraft, personal watercraft, motor homes and travel trailers. American Modern is the A+ rated carrier. EIB (Evolution Insurance Brokers) An E&S broker that operates in all states with all limits. Will consider all classes. Prime is the B+ rated carrier. Entertainment Brokers International A managing agent that operates in all states with limits of $1 million/$2 million. Target class is inland water racing. Can offer property, inland marine, workers comp, and excess auto liability. Everest National is the A+ rated carrier. First Flight Insurance Group, Inc. An E&S broker that operates in all states except IL and KY, plus the Bahamas, VSVI, Canada, South America, Barbados and BVI and with limits for risks up to $1 million or $5 million; excess for land owners or named risks/programs. Target classes are P&I for dive boats; CGL for jet ski and personal watercraft rentals; parasail, kite/wind/board/snowboard surfing, ultralight, and hang gliding instruction. Will not write banana boats or personal lines, property. Can quote miscellaneous surplus lines—event coverage, camps, etc. Carriers are certain Underwriters at Lloyd’s, rated A+. Foremost Insurance Group of Companies An insurer whose target classes are: ATVs, dirt bikes, dune buggies, golf carts and snowmobiles — written in all states except HI and NC (MA is ATV and snowmobile only). Limits from financial responsibility limit to $500,000 CSL. Will not write vehicles used for business or commercial use, amphibious vehicles and pocket bikes. Both Foremost Insurance and Foremost Property & Casualty are A rated. Francis L. Dean & Associates, Inc. An MGU that operates in all states with limits of $1 million/$2 million with excess up to $5 million (liquor liability and abuse/molestation optional). Target classes are canoe trips/river rafting, sport-fishing boats, and mountain bikes. Can offer accident medical for participants as well as hired and non-owned auto liability. QBE Insurance, Capitol Specialty, and American Sentinel are the A rated carriers. Gillingham & Associates, Inc. An MGA that operates in all 50 states with liability limits of $1 million and excess of $5 million available. Target classes are guided and unguided ATV and snowmobile operations; jeep tours (GL only); snorkeling, surfing, waterskiing, jet skiing and windsurfing activities; and whitewater rafting. Can offer GL, property, excess, liquor liability, commercial auto, inland marine, crime, and business income. Arch (admitted) is rated A; First Mercury Financial (surplus lines program) is rated A-. Global Marine Insurance Agency An agency that operates in all states except AK, FL and HI with all limits. Target classes are all pleasure craft, jet skis to mega-yachts, boat dealers, commercial rental fleets, and small passenger vessels. Will not write antique wooden runabouts. Standard coverage includes P&I liability, med pay, personal effects, towing, and pollution/spill liability. Inamar, Markel, St. Paul Travelers, Wolverine Mutual, and Zurich are A rated or better. H.R. Keller & Co., Inc. An E&S broker/wholesaler that operates in NY State only with limits that vary by company and product. Target classes are ATVs, high-performance boats, jet skis/jet boats, motor homes, motorcycles, travel trailers, yachts and pleasure boats. Will not write rentals. Admitted carriers are rated A- or higher. Hull & Co. An E&S broker that operates in all states with limits of $1 million (primary) and $10 million (excess). Target classes are yachts and pleasure boats, charter boats, sport fishing boats, and high-performance boats. Will not write water sports rentals. Can offer medical payments, towing, trailers, tenders, personal effects, bumbershoot liability and water skiing liability. Online PWC quoting is available. Various A rated carriers are used. Illinois R.B. Jones of Denver A program manager marketing through contracted MGAs only and operating in all states except CT and RI with limits of up to $1 million/$2 million (excess available for some classes). Target classes are guided canoe/kayak trips, guided watercrafting, freshwater sport fishing, go-kart tracks, and additional recreation classes. Will not write charter boats, jet pump boats, motor scooter/moped rentals, or ATVs. Can offer property and inland marine. Lloyd’s of London Syndicate 2000 is the A+ rated carrier. INAMAR Recreational Marine Insurance An insurer that operates in all states (worldwide navigation available) with unlimited hull limits (special programs for over $2 million and $5 million) and unlimited P&I. Target classes are boats, yachts, mega-yachts, sport-fishing boats, ski boats, and personal watercraft. Will not write water sports rental or bareboat chartered powerboats. Can offer personal property, towing/assistance, USL&H, medical payments, uninsured boater, pollution, wreck removal, salvage and expense, and defense costs. ACE American and other subsidiary insurance companies are rated A+. Insurance Innovators Agency of New England An MGA that operates in CT, DE, MA, MD, ME, NJ, NH, NY, PA and RI with watercraft limits of $100,000. Target classes are boats, jet skis and travel trailers. Can offer trailer coverage, towing and labor. Carriers are A rated. M.J. Kelly Co., Inc. An MGA that operates in AR, FL, IA, IL, KS, MO, MS, OK, TN, TX and UT with limits of $1 million/$2 million. Target class is outfitters, canoe rentals, personal ATVs, high-performance boats, snowmobiles, all-terrain vehicles, motor homes and motor scooter/motorcycle rentals. Can offer P&I and legal liability. All carriers are A rated. Marine Underwriters Agency, Inc. A wholesale broker that operates on the East Coast, the Great Lakes and the Midwest with limits that vary by class. Target classes are experienced owners, fishing boats and center consoles to mega-yachts. Will not write commercial hull, liability only, and wood hulls. All carriers are A rated. Markel American Insurance Co. An insurer that operates nationwide with limits of $1 million P&I or watercraft liability, hull values up to $2 million. Target classes are personal watercraft, small boat, yachts, commercial boat and PWC rentals, and charter boats. Can offer pollution, personal effects, medical payments, uninsured boater, and fishing equipment. Markel is the carrier. Metcom Excess An MGA/E&S broker that operates in CT, DE, MD, NJ, NY and PA with limits of $1 million. Target classes are yachts, pleasure boats, charter boats, and fishing boats. Will not write racing boats. Old United is the A rated carrier. Midlands Management Corp. An MGA that operates in all states with hull limits of $2 million and P&I limits of $1 million. Target class is inland waters. Can offer an endorsement for fishing guides (inland), personal effects, medical payments, uninsured boaters, and towing. Old United, American Modern Home, and National Interstate are the carriers. National Interstate Corporation An insurer that operates in all states except AL, DC, HI, KY, MA, MS, OR, RI, VT, and WV with limits of up to $1 million. Target classes are recreation vehicles, travel trailers, companion auto, and pleasure boats. All carriers are A rated. NIF Group, Inc./NIF Pro An MGA/E&S broker that operates on an admitted basis in all states and on a nonadmitted basis in 25 states, mostly in the eastern United States, with primary limits of $1 million/$2 million (excess available). Target classes are jet skis, parasailing, go-karts, and difficult-to-place. Can offer GL, property, physical damage, and excess. All carriers are A rated or better. Old United Casualty Co., dba Vantage Casualty Co. in CA An insurer that operates in all states except AK, FL and HI with the following limits: 1. Boats (hull, $100,000 and $50,000; $100,000; $300,000; $500,000 liability) for watercraft 26’ and less and less than $100,000 in value; 2. Yachts (hull, $2 million and $50,000; $100,000; $300,000; $500,000 and $1 million P&I) for watercraft either greater than 26' or $100,000 in value; 3. Personal watercraft (liability up to $300,000). Target classes are bass boats, walleye boats, personal watercraft, freshwater/saltwater yachts but none moored/stored full time south of the VA/NC border. Will not write boats which exceed 65 mph (except bass boats up to 80 mph) and yachts which exceed 60 mph. Can offer emergency towing/assistance, medical payments, uninsured boaters, underinsured boaters (yachts only), personal effects, longshore & harbor workers coverage (yachts only) crew coverage, and mechanical breakdown. Old United Casualty (dba Vantage Casualty Company in the state of CA) is an A rated company. Prime Insurance An MGA (EBS)/insurer (Prime) that operates in all states except AK, CA, CT, LA, NJ, NY, RI and TX with all limits. Will consider all classes Can offer monoline liquor coverage, assault and battery and after 3 a.m. closings in the hospitality industry. Prime is rated B+. Russell Bond & Co., Inc. An MGA operating in CT, MA, NJ, NY, PA, OH and VT with primary liability limits of up to $2 million/$3 million; hull values up to $20 million (higher limits through an umbrella). Target classes are canoe trips, horse/carriage rides, canoe/paddle boat rentals, and watercraft including power boats up to 45'. Will not write ATV rentals, jet skis or houseboats. Can offer GL, liquor liability, excess, property and inland marine. All carriers are rated A- or better. Seahorse Underwriters An MGA that operates in all states with limits of $1 million and up. Target class is pleasure boats. Will not write charters or commercial use. St. Paul Travelers is the A+ rated carrier. Southern Insurance Underwriters, Inc. An MGA/E&S broker operating in AL, FL, GA, MS, NC and SC with limits for land-operated vehicles of $500,000 CSL and marine based up to $1 million CSL with hull coverage of $3 million. Target classes are yachts, personal watercraft, travel trailers, RVs, motorcycles, custom-made choppers and ATVs. Some wind restrictions may apply. Will not write certain hull materials such Ferro-Cement, Kevlar, etc.; travel trailers used as permanent housing; or trailers with no living quarters. Can offer commercial marine risks—marinas, boat dealers, boat detailers, etc. The A rated or better carriers are Markel, American Modern, Zurich, Essex, OneBeacon (International Marine Underwriters), and National Indemnity. Specialty Risk Associates, Inc. An MGA/E&S broker operating in AL, AR, LA and MS with limits of up to $750,000. Target classes are personal watercraft, high-performance, seasoned yacht, and commercial marine program. Will not write homemade boats. Can offer waterski liability, trailers, personal effects, uninsured boater, medical payments, slip/mooring liability, or towing. Carriers are Markel American, International Marine, and American Reliable. Symons International Group (Florida), Inc. An E&S broker that operates worldwide (marine/water coverages) and in FL only (land coverages) with limits of $1 million/$2 million (excess up to $5 million). Target classes are yachts, private pleasure, charter, bareboat charter, and boat rental. Will not write personal watercraft. Great Lakes Reinsurance (marine, A+), Burlington (land, A-), and Prime (land, B+) are the carriers. Thum Insurance Agency, LLC An agency that operates in all 50 states with limits of $1 million. Target classes are personal/commercial use motor homes/travel trailers, and personal watercraft. All carriers are A rated. Western World Insurance Co. An insurer that operates in all states with GL limits of $1 million/$2 million. Target class is boat rentals. Will not write trail rides, waterskiing and rental of jet skis, airboats and sea kayaks. Can offer GL, property and floaters. Western World is an A+ rated carrier as is Tudor. Yates & Associates Insurance Services, Inc. An MGA that operates in CA only with various limits. Will consider all classes. A rated nonadmitted carriers are used to place coverage. * |
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