Print

On the Harbor: My friends at NOVMAR are going to insure you’re doing things right

By LEN BOSE

Last May I received a call from my good friend Craig Chamberlain, “Hey Len, work is getting in the way and I have to drop off the crew list for Trans Pac.” He went on to explain how the marine insurance business that he works in has been turned upside down, and he needed to stay in town to keep his company on a straight course. 

Chamberlain has owned his own marine insurance business for 38 years, now under the name NOVMAR. You probably have noticed their sign and office along Mariners’ Mile on Pacific Coast Highway. His wife, Julie, and I were both in the same second-grade class, although we did not know each other that well. She sat at the front of the class while I was in the back corner facing the opposite wall.

Now that the Chamberlains have their company back on the foils, I thought I would reach out to him again for an update on what’s doing in the marine insurance business. 

On the Harbor My friends West Coast Marine

Click on photo for a larger image

Courtesy of West Coast Marine

West Coast Marine on Newport Boulevard

Chamberlain explained the changes in the marketplace as simply as he could, but remember, I sat in the back of the class. 

“With over a dozen marine insurance companies leaving the market, things have gotten tighter, with fewer companies participating, making underwriting even more difficult, as the remaining companies become more selective with reduced capacity and higher prices. 

“They say no more often now than they used to. We’re challenged to submit complete underwriting packages to provide the best terms for our clients. However, if an agent sends in an incomplete package and the client is turned down as a result, it’s extremely difficult to provide additional information and try to then turn that no into a yes. 

“With fewer marine insurance agencies available, the remaining companies just can’t write billions and billions of yacht insurance. They have their capacity limits, because if they write billions of dollars of insurance on boats say sitting in Fort Lauderdale and a hurricane comes through, they’re done. That lack of capacity has really affected the market.”

I then asked him how a customer should complete their due diligence before purchasing a boat?

“Buyers should have a clear understanding of their insurance requirements before they even start shopping, similar to getting prequalified for a loan. One doesn’t want to learn the fine details of their policy the day before the deal closes. 

“In today’s world it’s easy for owners to overbuy and not have the experience to run a 35’ or larger boat. So, many companies will just say no, while other companies will require a skipper for the boat the first year. And others might have the owner receive training, and then be signed off by their skippers,” Chamberlain added. 

He went on to explain what underwriters are looking for today. “There are variables, for example, let’s say the vessel is under 10 years old, it’s a production boat that is used in our local waters with an experienced owner. This will take two days to get a couple of quotes. 

“But, if a boat is over 10 years old, the underwriter is looking for a clean survey with a resume of the owner’s experience owning vessels of a similar type and size. A clean survey is then very important, because, up until a couple of years ago, underwriters had a better understanding that 25-year-old boats would have a larger recommendation list. Today, vessels need to have a clean survey, along with the owner having the experience for that type of vessel,” said Chamberlain.

Boat owners have to also keep in mind that the information they give about their experience can be easily proven, or that if they have a claim, say due to lack of maintenance, the insurance companies will not pay or they’ll rescind the policy. 

Chamberlain and I have the same opinion, that sellers should take the time to get their boats ready for sale and get a survey beforehand. The insurance agency’s largest concern will be if that boat sinks or burns. 

So, if there are bad thru-hulls, broken hoses, missing hose clamps, bilge pumps issues, leaky shaft logs, or unused wiring that has never been removed, these items will alarm underwriters and they will probably just say no. 

In the past, brokers would work out a survey allowance with the buyer to allow for some time to make the recommended fixes. That option is now becoming a thing of the past. This could lead to problems for some sellers if they place a damaged boat back in the water and then they don’t have insurance. 

And to make matters worse, with today’s shipyards being weeks out before they can fit repairs into their scheduling, this can lead to a volcanic eruption for most sellers.

I next asked Chamberlain what the best ways were for boat owners to maintain their insurance policies. “If something changes, and/or you leave your navigation area, you will need to update your policy. Likewise, if you purchase a new dingy, update your fishing or diving equipment, get new jet skis, foil boards, or deck slides, simply make certain your agent knows. 

“If any type of charter occurs, one will need to update their policy with a special endorsement. If there is any significant change, for example, if you re-power the boat, it never hurts to give updates to your insurance agent on what you are doing with your vessel. If you go cruising, advise your agent six months ahead of time, they’ll want crew resumes and a general outline of your plans.”

The Chamberlains are not paying me to write this story, but we all know how closely knit this marine industry is. I have worked with them for more than 32 years myself and there are many reasons why I refer my clients to NOVMAR for marine insurance. All of their agents are boaters with tons of experience and they have offices all over the country to help their clients. 

Also, their Mexico company started 12 years ago and is licensed in Mexico with a staff of 15. If there is a problem while down there, it’s an advantage to their clients to have local representation. Having an agent who can speak to the local authorities or Port Captain can always be helpful.

The Chamberlains have cruised Mexico, so I had to ask them which was their favorite destination?

“Playa La Ropa, off of Zihuatanejo, is pretty darn nice. We spent a month there. And, the whole Sea of Cortez is like one big anchorage, you’re always only a short distance from the next one. I think it’s a pretty magical place,” said Chamberlain.

Sea ya.

~~~~~~~~

Len Bose is a yachting enthusiast, yacht broker and harbor columnist for Stu News Newport.