Insurance Is An Important Product That Cannot Be Taken For Granted
The chair of the Transpacific Yacht Race Committee asked me yesterday whether I could spend some time with him when we arrive in Hawaii. I guess he could tell I was curious about the request since I had not broken any rules—the race had not started.
He said that the problems of boats finding insurance to cover the voyage to Hawaii caused some boat owners to drop out of the race after first registering. I told him that I would love to discuss this with him. The insurance I found will only cover half the value of Merlin’s hull but none of the running rigging, mast, boom, and sails during the race. Once we arrive in Hawaii, my boat is fully insured, and fully insured for the trip back, which others will make for me.
Everybody is having problems with rising rates and finding full property insurance. This week’s post by Liberty Ritchie, Farmers Insurance Halts Sale of Homeowners Policies in Florida, is just one of many where we have noted people unable to find insurance to cover their property.
Insurance is an important product. Spreading the risk of loss among many allows people to invest in various types of property. It allows people to take their property to various parts of the world. It allows business owners to take risks with their capital. If available, it would have allowed more of my friends to compete against me in this epic race I will start today to Hawaii.
Profits are important for insurance investors. Without those selling insurance to make a profit and secure a return on the risks they insure, there certainly would be no market for insurance and no interest by others to invest in the industry. So, while many love to complain about how insurance companies have handled their claims, there first needs to be an insurance product that is sold.
I predict that many will start to find non-traditional self-insurance mechanisms and pooling arrangements. The high rates and low availability are demanding these alternatives.
The photo above of my father and me kissing my mother was taken in Bermuda after my father raced with me on Merlin over Father’s Day in June 2018.
The Transpac starts today for me, and for readers who would like to track the race, here is the link.
Thought For The Day
To the members of all race committees who have volunteered their time to allow me and my friends to compete against each other in the sport we love.
—Dedication of book, Mavericks & Merlins: Sailors And Renegades Leave Shore, What About You? by Chip Merlin
