On the Water: Travelers’ Shasha Talks Boats for the Summer

With more than 12 million registered vessels nationwide, the boat and yacht market presents an interesting opportunity for agents and brokers to add to their book. Boats are a growing opportunity for Travelers as well, says Todd Shasha, managing director, personal insurance boat and yacht, Travelers.

In this interview with Insurance Journal’s Andrea Wells, Shasha, a life-long boat owner, talks about why insuring boats and personal watercraft offers agents opportunities to round out accounts this summer.

Insurance Journal: Describe the boat and yacht market in a post-recession environment. Are you seeing an uptick in business? Is the market growing now?

Todd Shasha: Boat sales have trended up throughout 2015. We have seen an increase in boat new business coming in throughout 2015. We’re hoping the same maintains for 2016. We are very optimistic. … There’s been a downturn in the stock market over the last couple of months. Obviously, that will be a watch item to see if that impacts boat sales in the near-term to long-term. But ultimately, overall, a solid year for 2015 for boat sales.

How would you describe the insurance market for boats and yachts today? Is it competitive?

Shasha: Generally, the marketplace for boat and yacht insurance is very healthy. There are a number of competitors, including us, who are chasing market share. But there’s ample appetite for boat and yacht risks. For Travelers, we do have a multitude of products that are available for customers. We sell (products) for boats and yachts, but as a personal insurance company, we also sell auto, home, condo, tenants, umbrella and personal articles. We do offer a discount off our boat and yacht products if you do have an account rounded piece of business. For example, if you have two or more policies with Travelers, you can get up to 15 percent off your boat policy premium.

How have coverages changed for the market?

Shasha: You’ll find a variety of coverage across carriers with maybe more specialized coverage. It really will vary carrier per carrier on the coverages that are offered. I think each carrier might add unique endorsements that they would proffer their customers. It depends on the products as well. Your yacht product will be a little more sophisticated or potentially a lot more sophisticated than a boat policy, per se. Usually more coverages with that type of a vessel versus the boat potentially.

What’s the biggest challenge agents might see when insuring watercraft, whether it’s a small personal boat or a large yacht?

Shasha: With your boat and your yacht policies, typically, there are warranties under that policy. We’ll speak to the yacht policy. In the Northeast, we have something called the layup provision, which is a warranty under the policy. You get a premium discount if your yacht is decommissioned based on a certain time period. You might say, “I’m not using the yacht after December or before March 1.” Generally, you get a premium discount for that, but the customer has to be very careful that they’re not navigating with that vessel between that time frame. Otherwise, coverage could be potentially not there for the customer if something should happen when they’re navigating the vessel.

The other thing is the territories where your vessel is used. If you have a yacht and you pick a navigation territory of New England, if you navigate outside those waters, there could potentially be no coverage as well. Those are two areas.

On a boat policy, you could have inland or coastal navigation; you want to be very cognizant of the coverage that you have. The obligation is on the agent and the customer — ultimately the customer — to really understand the coverage that the policy provides for navigation of the vessel.

The sharing economy is affecting a number of areas of property/casualty insurance. It seems that some boat owners maybe considering renting out their boats in a sharing capacity. How do you handle that as an underwriter?

Shasha: That’s such an interesting concept. We have actually seen manufacturers promoting that (rentals) as potentially a method to offset the high payment of a boat. Travelers is a personal insurance writer. Sharing of your vessel, receiving compensation, is dealt into a commercial risk aspect. If you are renting out your boat, coverage would not be provided by the policy. I think that’s probably pretty typical across the industry. The reason for that is you underwrite the owner of the vessel and potentially the operators.

If you’re renting out to somebody, is the person familiar with the waters that are being navigated? What is their experience operating a vessel? Those are questions you’ll ask the owner when you’re underwriting the risks.

We don’t have that opportunity to do that if they’re renting out the vessel. It really is a very different categorization of risk. Compensation is considered a commercial exchange. We would not provide coverage under that circumstance.

Owning a boat is generally a luxury for most people. Is there opportunity in this market to grow, or does the market depend solely on the economy?

Shasha: I think the economy certainly does impact, to an extent, boating. With boaters, you have a very passionate group. For instance, I started boating at a fairly young age. It’s in my blood. It’s an interest I have. I hopefully will always own a boat. I wanted to share that with my kids so they take up that hobby as well.

But if you look at boat registrations from the U.S. Coast Guard statistics, you’re looking at probably more than 12 million boaters nationwide or registered vessels nationwide. I think it was down the last couple of years but we’re starting to trend back up again. The strengthening economy probably plays a role in that and hopefully the economy will continue to expand forward and present opportunities.

It is a luxury item. It is a very expensive hobby, but it’s one that people are very passionate about.

Lastly, what are the typical claims you see in the boating world?

Shasha: Boats and yachts might be a little bit different. With boats you’re using a trailer. With yachts you’re navigating further. But the typical top five claims are: 1. Colliding with a submerged object like a log; 2. Mechanical breakdowns; 3. Striking docks, piers, other vessels etc.; 4. Windstorm events; and 5. Running a vessel aground.