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InsuranceWe carry both boat and health insurance. It's the largest single item in our cruising budget. If you think about it, insurance is just gambling. You're betting you'll need it, and the insurance company is betting you won't. Insurance companies employ actuaries to compute the risk and hence, the premium. Your rates are an excellent indicator of the claim experience insurers have with your risk group. Health InsuranceWe have always carried health insurance, though we know many people who do not. To keep the premiums low we always specify a large deductible, because we're primarily concerned with catastrophes - cancer, a broken femur, other serious injury, that sort of stuff. We don't sweat the small, day-to-day expenses of checkups, immunizations, prescription drugs, that sort of thing. We keep enough money in the bank to handle minor injuries and try not to do dumb stuff. We also have emergency Medevac coverage through the debit card associated with our brokerage account; something to think about. In the event of a major medical emergency, this policy will pay to repatriate you if a local physician declares it to be necessary. This could amount to $50,000 or more in some locations - far more than we'd have available if the need arose. The cost is trivial. A major medical problem could, literally, wipe you out financially if you're not insured. Beth's accidentWe were in the Gambier Islands, French Polynesia, about a two hour flight by jet from Papeete, Tahiti. Beth offered to help assist a sailboat coming into the wharf to make repairs. She was standing on a local boat tied to the wharf, waiting to take the lines as the sailboat approached slowly, pointing straight at her. Something went wrong with the reverse gear and at the last minute, it became obvious that there was going to be a collision. Beth, knowing it would be impossible to stop the boat, attempted to get out of the way but was trapped, and she got caught between the two boats, crushing her arm and chest. She was hurt. We got her to the small clinic where a physician examined her, but there wasn't much that could be done. As it turned out, Beth suffered at least one broken rib, a dislocated rib/sternum, bruises, and a crushed muscle in her arm. She spent the next couple of days in bed, unable to move much without my help. She recovered after about 3 weeks, but if that broken rib had punctured a lung, an immediate medevac flight would have been imperative to save her life. The cost would have been astronomical, not to mention the cost of emergency surgery and hospitalization. We were incredibly fortunate that she wasn't seriously injured and none of this was required. But, if it had, and if we lacked insurance, it could have broken us financially. And, if you're thinking the costs could be recovered by suing the other guy, forget it. Out here I'd guess that most yachties are not insured, and it would take years to get your money anyway. Believe me, if we'd needed this kind of medical service, a couple thousand a year for insurance would have seemed cheap. Just because you're young and healthy you should keep in mind, accidents and major illnesses DO happen. Boat InsuranceAchatesWe didn't have insurance when we cruised on Achates (but rates were around 7% then and we were under 40 years old). We figured we'd be careful and take the risk. It turned out to be a good decision, but then we had good gear and 11 years of experience, so we figured we could manage the risk better than most people. We saved $30,000 in boat insurance premiums over our three year cruise by being uninsured. That was almost enough to pay for the three years of cruising! REDWe carry insurance on RED because we can't afford to risk losing her (we're in our mid-50's now, plus we have a lot more invested in RED than we had in Achates). Insurance is much more affordable now, too. These days, offshore insurance costs around 1.25% of your boat's insured value. Figure on a large deductible; ours is about 10% of the value in the event of a total loss. We do everything possible to avoid losing or damaging RED. We sail conservatively, have good ground tackle, lots of experience, all that goes with it. Still, stuff happens; a boat drags down on you in a squall, something breaks unexpectedly, whatever. We sleep better knowing that we're insured. Of course, you should also keep liability in mind if you have any significant assets. Sure, if all you have is your 30 foot, 15 year old sailboat and $2,000 in the bank, you're pretty safe from a liability claim, but if you have a boat, home, and/or other assets worth a few hundred thousand dollars, you're a prime target for a lawsuit if you're even partly at fault for some accident. |
