Out of curiosity, does say a 17 foot Eliminator Tunnel count as a Cat? And how do the insurance companies prove "experience" vs. "ownership"? I guess what I'm getting at is on paper does a 17 foot eliminator that runs at Havasu every weekend look any differnet that a 17 foot eliminator that went to the dump and just had it's registration renewed every year?
And what about a liability only policy? Any potential for reasonable prices there? Seems like it would be a good compromise between "self insurance" (aka no insurance) and buying your insurance guy a new car every year.
I'm no big fan of insurance companies, but from what I've been told the payout from one major catamaran accident (the kind where people die) can eat up everything and more an insurance company makes in catamaran premiums in a single year. It would be nice if the problem was as simple as insurance company greed or ignorance, but it's not. Litigation plays a huge role, settlements play a huge role.
But don't feel too sorry for insurance companies. They make plenty of money on the investments they make with your premiums.
The solution? In this society, where there are no accidents and there must always be someone to blame and, more important, to extract money from? There isn't one. There are no silver bullets.
You might fly F-18s and wax Michael Schumacher in F-1 on your weekends off from Top Gun, but you're still going to pay through the nose for cat insurance.
And don't get me wrong, Knot, I have no problem with that. I have no problem with insurance companies making the bulk of their profits from investments they make with the premiums they collect. But when they face losses, when they have to pay out, I don't feel sorry, per se, for them, either.
Insurance is a form of gambling. The insurance company is betting you won't have an accident and they won't have to pay out. You're hoping you won't have an accident, as they are, but being a realistic soul you realize that accidents happen and you need to cover your assets (pardon the pun).
Let's say Markel writes $10 million a year in high-perf boat insurance. One horrible wreck involving death in a high-end cat would easily eat that. Easily. Legal fees alone would be exorbitant. The company's entire gross profit from premiums would vanish ... in just one claim/case.
So yes, as you say, the insurance companies have to do some investing. In a way, investing is their primary business. They just raise investment capital through premiums.
As I understand it, the whole insurance concept came out of China, where junkt owners on the Yangtzhe River created a pool of money for anyone who lost on junkt on the river. That way, no shipper's business would be destroyed by a single accident. In a way, it was a weird and ultimately successful blend of capitalism and communism.
I'm not sure. I believe that depends on the policy. Not an insurance guy, just know a few of them.
100-Plus, hey, that's an age thing, right?
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