Q&A
World Marine Underwriters’ Dave Williams

Marine insurance veteran
helps clarify coverage
as hurricane season begins.

Dave Williams

Marine insurance for your vessel is a necessity, yet there are common questions that many policyholders have regarding coverage. Hurricane season begins June 1 and boat owners need to be prepared. Southern Boating magazine’s Doug Thompson caught up with Dave Williams of World Marine Underwriters, based in Fort Lauderdale, and interviewed him on the complexities of marine insurance. Williams has been working with boat owners for 25 years, insuring all types of vessels ranging from 20 feet to 498 feet.

SB: Most of Southern Boating’s readers—including those living in parts of the U.S. East Coast and Gulf Coast, the Bahamas and the Caribbean—are in a hurricane zone. What are the current marine insurance policy requirements for boat owners who keep their vessels in these areas?
DW: Almost all insurance companies writing policies for vessels with home ports in the Southeast U.S., Florida, and Gulf Coast states require the vessel owner to submit a “Hurricane plan” to the insurance underwriters. A well-written storm plan will include where the vessel will be kept during a storm and how the vessel will be secured to withstand the storm effects.

SB: In the past, some insurance policies have required moving the boat north for the summer—is that still the case?
DW: There are some insurance companies that still require the insured vessel to be north of Florida during storm season but other companies write policies for vessels that are full time in Florida/Bahamas waters. Historically Florida is affected far less by summer storms than the central East Coast states such as the Carolinas, but it is the density of boats in Florida that worries insurance actuaries.

SB: Are there certified “hurricane holes” in the south where a yacht owner can move his boat and still have it be covered?
DW: The short answer is no, but let me answer this way. A tropical storm or hurricane has two damaging elements, wind and waves. Removing the wave element leaves the vessel to the effects of only the wind and it becomes much easier to survive a storm when the vessel is not being buffeted by waves. A well-secured vessel that is “spider-webbed” into a dock slip will survive most storms. Removing the wave element means relocating the vessel to an area that has little or no open water fetch thus eliminating the wind’s ability to drive water into waves. Moving the vessel up a river about five miles from the ocean should eliminate open-fetch water and the associated wave action. So while there are no “certified” hurricane holes, moving the vessel as far inland as possible will mitigate the storm’s effect.

SB: How does employing a crew to run your boat affect your marine insurance policy? What types of coverage should you have?
DW: I look at this from my years as a charter boat captain. If my boat is destroyed in a storm then my job goes with it. I protect the boat, I protect the job. It is the vessel’s crew’s job to protect the vessel and this includes from tropical storms and hurricanes. Having a crew with storm experience is invaluable. Insurance companies look very favorably on vessels that have full-time paid crew managing the vessel’s safety.

SB: Please provide an overall view of the “state of marine insurance” and do you see that industry changing over the next 20 years?
DW: The marine insurance market place has gone through so many changes over the past 20 years that it’s like watching a duck swimming across a pond. On the surface the duck glides along on a mirror-smooth surface but below the surface its legs and feet are beating away contending with all manner of obstacles. While the premise of marine insurance is, and has always been, to protect the vessel and her crew from loss, there is constant change within the industry. As the risk changes, the insurance company has to adapt to protect itself and still be able to manage the risk.

SB: Tell our readers a common misconception—or two—when it comes to marine insurance?
DW: A marine all risk insurance policy covers anything that can damage the vessel or injure her crew.
Every policyholder should read the exclusions in all sections of the policy. If it’s not excluded then it should be covered, but learn the exclusions. Don’t wait until you have a claim to read your policy.
In the insurance industry a claim, is a claim, is a claim.
No matter how big your boat is or how small the claim, an insurance underwriter will always take into account the frequency of claims when evaluating a potential client. Five small claims could mean there is a big one waiting to happen.

Back to May Newsletter