Higher Insurance or Hold Harmless

[lidojohnny]

Read about Yemen this morning, and with Tunis the same, I thought about

the following, and solicit your ideas. Could this happen in Oman, UAE, perhaps

Turkey? Of course. But could I also imagine the changes in trip insurance, and new ship requirements. Could the insurance companies charge more for

travel to certain areas of the World, not alone to certain countries? Could the

ship require you to sign a separate hold harmless for getting off the ship for

any reason? What changes in security and procedures could you envision?

Certainly, these events will have profound influence on future cruisers and

therefore the lines themselves. Many pro voyagers may scoff at this problem

and travel as usual, but I think the import of these events do not bode well

For the Worlds and other extended sailings.

[cb at sea]

I'm SURE the insurance prices will rise to those areas, assuming ships continue to cruise there.....although anyone who willingly goes there for pleasure....surely needs their head examined.

[Essiesmom]

I don't recall my insurance ever asking where I was going, just how long and the cost. But I think they do have the disclaimers that they don't cover in war zones, etc. I'm sure the legalese will proliferate. EM

Edited March 20, 2015 by Essiesmom

[Padraic]

Could the ship require you to sign a separate hold harmless for getting off the ship for any reason?

 

I can't imagine a situation where a ship would require a "hold harmless" form.If the situation at a particular port is this bad the ship would not even stop there.

[visagrunt]

I don't see a good business case for differential insurance premiums. Once the exculpatory language for war zones and the like is taken into consideration, there's not an enormous difference in risk profile.

 

While the risk profile might be greater on a trip in some parts of the world, the quantum of risk is far higher in safer parts of the world (the cost of emergency medical care, for example). Figuring weight for age, the best risk management strategy is to spread the risk across the broadest base rather than trying to slice and dice it.

 

As for "hold harmless," I agree with Padraic. If the risk profile is high enough to warrant that, then the risk profile is high enough not to enter the port.

Edited March 20, 2015 by visagrunt

[take us away]

Come on now - every port is a possible issue - they can assault passengers everywhere - remember Jamaica!

 

We cruise to all regions (and will continue to do so) and have never been asked by an insurance company where we are going - just dates and costs, as previously mentioned. And how does one define 'war zone' - that is where the insurance companies will do their fancy dances!

 

Cruising is a person thing and if you do not feel safe cruising to a region or a port, you do not have to go. Have an idiosyncracy about going to Vietnam (past history) so I just stay on the ship. Have seen ports cancelled at the drop of a hat for safety reasons so tend to feel if we dock, we can explore but we are ALWAYS mindful of safety.

Edited March 20, 2015 by take us away

[chrispb]

For us Brits, if the Foreign Office advise against travel then our insurance is invalid.

 

By the time this happens, flights have often stopped anyway.

[sail7seas]

I could imagine the cruise lines' insurers could raises premiums depending upon itineraries and world situations.

[chengkp75]

I could imagine the cruise lines' insurers could raises premiums depending upon itineraries and world situations.

 

Maritime P&I insurance is a mutual insurance, meaning that a group of shipowners get together and pool funds to self-insure their ships.

 

I am not sure how much the cruise line is liable for passengers who voluntarily leave the ship and the port area, both of which are secure areas under the precepts of the ISPS code. This is like a mass transit system being sued for a passenger getting off and getting mugged after leaving a station in a dangerous neighborhood.

[sail7seas]

Interesting....... thank you, as always. I had no idea cruise lines were self-insuring. :eek: Makes me think of a ton more questions including sad circumstances such as Costa Concordia and her Captain.

 

 

 

Edited March 20, 2015 by sail7seas

[chengkp75]

Interesting....... thank you, as always. I had no idea cruise lines were self-insuring. :eek: Makes me think of a ton more questions. :)

 

 

 

 

Not an insurance agent, nor did I play one on TV, but I'll answer whatever I can.

[sail7seas]

Hopefully you slept in that named hotel last night...... :)

 

Do they self-insure for all possible calamities and tragedies? Of course, Costa Concordia comes to mind. Are some cruise lines left out of the 'consortium' because of lack of confidence in their circumstances?

 

[AmazedByCruising]

Maritime P&I insurance is a mutual insurance, meaning that a group of shipowners get together and pool funds to self-insure their ships.

 

The amount of knowledge you bring to this site is really amazing. "Find all posts by chengkp75" has almost become a daily routine to learn things I wouldn't even remotely have thought about. Same for BruceMuzz. Maybe you two should get on a very long cruise with enough seadays to compile all those facts and make a book. (or, just facts and let someone else turn it into a book). I would buy it immediately, and would invest if it was crowdfunded. I've been looking for a book like that but it simply doesn't exist. Yet, I hope :).

[chengkp75]

Hopefully you slept in that named hotel last night...... :)

 

Do they self-insure for all possible calamities and tragedies? Of course, Costa Concordia comes to mind. Are some cruise lines left out of the 'consortium' because of lack of confidence in their circumstances?

 

 

Yes, the ship is covered by traditional insurers under "hull" insurance, up to the value of the ship (companies like Lloyds of London). P&I is for more open claims, like war risks, damages to the environment, other ships, etc.

 

The "clubs" as P&I groups are called, look at the historical amounts paid out by the members, and set a premium based on this amount. If claims are less than the premiums, the excess can be refunded, or kept as a "war chest". The clubs have the right to deny any shipowner entry to the club, or to kick an owner out of the club if that owner's claims are excessive to the rest of the members. So there are top tier clubs and ones that allow the owners of rust buckets in.

 

In the Concordia case, there was the hull insurance, the P&I, and some other environmental insurance, required by the Italian government. Once the amount of coverage for all of these insurances ran out (and they did a long time ago), the shipowner then becomes liable for everything.

[sail7seas]

So interesting. You are so generous to share your knowledge with us.

 

I wonder if because Carnival Corp. owns so many ships and so many cruise lines if some under the Carnival umbrella are in one "club" while another line could be in a higher or lower tier?

 

I don't want to over use the welcome you offered but wow, I could go on and on about this. It really interests me.

 

[chengkp75]

So interesting. You are so generous to share your knowledge with us.

 

I wonder if because Carnival Corp. owns so many ships and so many cruise lines if some under the Carnival umbrella are in one "club" while another line could be in a higher or lower tier?

 

I don't want to over use the welcome you offered but wow, I could go on and on about this. It really interests me.

 

 

While Carnival Corp. would be smart to spread the risk by placing each line under a different club, they would not necessarily be in different risk groups (though I imagine the group that Costa belonged to isn't too happy with them). My son works for Liberty Mutual, and they took a big hit on the Concordia (hull re-insurance).

 

I'm here for another couple of weeks, going back to the ship at the end of the month, so ask now or hold them for a couple months.

[sail7seas]

When a cruise line adds a ship to their fleet, does their "club" have any say in design, size etc? How much are they told about the new ship prior to its Inaugural seeing as some in their 'club' could well be the competition?

[chengkp75]

When a cruise line adds a ship to their fleet, does their "club" have any say in design, size etc? How much are they told about the new ship prior to its Inaugural seeing as some in their 'club' could well be the competition?

 

No, nothing of that is important to the club. Members of the club are very commonly competitors. They are only looking at historical and claim performance of the company as a whole. They do want to see the "certificate of class" that the classification society gives the ship (think of an insurance underwriter like UL) that states the ratings given for construction, safety, automation, etc., and certifies the ship is safe to navigate. Some clubs only take ships classed by certain societies.

[OleSalt]

Mr Cheng is from Kings Point so must be forgiven for paucity of knowledge.

Lloyds of London is NOT an insurance company. It is a group of people who have pledged all of their assets as a investment, hoping to clear a profit on the premiums. The essence of insurance is spreading the risk, so the underwriters at Lloyds each take a small percentage of the entire risk. If you want to insure your ship (keeping it simple) you approach an insurance broker which has a relationship with the Corporation of Lloyds. The broker writes the details of your offering on a piece of paper, the "slip". He then takes the slip to the floor at Lloyds and presents it to the brokers. If satisfactory, the broker signs the slip, indicating what percentage of the risk he wishes to take. This is the origin of the term "Underwriter". What is interesting is that this system has worked, unchanged for several hundred years.

Protection and Indemnity Insurance is like your auto liability policy. It is done through "Clubs" like a Mutual Insurance company. The members of the club agree to contribute proportionally for all the payments made. The club issues a "Call" when the money is needed. Of course, excess calls are insurable.

[chengkp75]

Mr Cheng is from Kings Point so must be forgiven for paucity of knowledge.

Lloyds of London is NOT an insurance company. It is a group of people who have pledged all of their assets as a investment, hoping to clear a profit on the premiums. The essence of insurance is spreading the risk, so the underwriters at Lloyds each take a small percentage of the entire risk. If you want to insure your ship (keeping it simple) you approach an insurance broker which has a relationship with the Corporation of Lloyds. The broker writes the details of your offering on a piece of paper, the "slip". He then takes the slip to the floor at Lloyds and presents it to the brokers. If satisfactory, the broker signs the slip, indicating what percentage of the risk he wishes to take. This is the origin of the term "Underwriter". What is interesting is that this system has worked, unchanged for several hundred years.

Protection and Indemnity Insurance is like your auto liability policy. It is done through "Clubs" like a Mutual Insurance company. The members of the club agree to contribute proportionally for all the payments made. The club issues a "Call" when the money is needed. Of course, excess calls are insurable.

 

I really knew this about Lloyds, just didn't want to get into that much detail, just saying that Lloyds does hull insurance underwriting, but not P&I.

[RuthC]

I really knew this about Lloyds, just didn't want to get into that much detail, just saying that Lloyds does hull insurance underwriting, but not P&I.

Thank you for not making your explanations of things (everything you explain) more complicated than it needs to be.

 

I appreciate that you just get to the point in a logical fashion. No need to tell me how to build a clock, when all I asked for was the time.

[tech1]

Come on now - every port is a possible issue - they can assault passengers everywhere - remember Jamaica!

 

We cruise to all regions (and will continue to do so) and have never been asked by an insurance company where we are going - just dates and costs, as previously mentioned. And how does one define 'war zone' - that is where the insurance companies will do their fancy dances!

 

Cruising is a person thing and if you do not feel safe cruising to a region or a port, you do not have to go. Have an idiosyncracy about going to Vietnam (past history) so I just stay on the ship. Have seen ports cancelled at the drop of a hat for safety reasons so tend to feel if we dock, we can explore but we are ALWAYS mindful of safety.

 

"...have never been asked by an insurance company where we are going - just dates and costs, as previously mentioned."

 

I keep reading this again and again, but I have to take issue. After getting quotes last month from several top travel insurers, I noted that they all asked the following question; "In which country will you be spending the greatest amount of time?"

[Randyk47]

"...have never been asked by an insurance company where we are going - just dates and costs, as previously mentioned."

 

I keep reading this again and again, but I have to take issue. After getting quotes last month from several top travel insurers, I noted that they all asked the following question; "In which country will you be spending the greatest amount of time?"

 

Yes, I booked our travel insurance for our upcoming cruise a few months ago, well before the recent trouble in Tunisia, and had to answer that exact question. I have no idea that it impacted the cost of the insurance. Could it in the future? Maybe.

Edited March 21, 2015 by Randyk47

[sail7seas]

Thank you for not making your explanations of things (everything you explain) more complicated than it needs to be.

 

I appreciate that you just get to the point in a logical fashion. No need to tell me how to build a clock, when all I asked for was the time.

 

+1

 

The clarity of the posts are what make them so valuable for most of us. ... and so appreciated.

Edited March 21, 2015 by sail7seas

[cccole]

Come on now - every port is a possible issue - they can assault passengers everywhere - remember Jamaica!

 

We cruise to all regions (and will continue to do so) and have never been asked by an insurance company where we are going - just dates and costs, as previously mentioned. And how does one define 'war zone' - that is where the insurance companies will do their fancy dances!

 

Cruising is a person thing and if you do not feel safe cruising to a region or a port, you do not have to go. Have an idiosyncracy about going to Vietnam (past history) so I just stay on the ship. Have seen ports cancelled at the drop of a hat for safety reasons so tend to feel if we dock, we can explore but we are ALWAYS mindful of safety.

 

We have started getting medical insurance, including evacs if necessary, when traveling and are ALWAYS asked where we are going. And...we also travel to all parts of the world. Cherie