By Charles C. Campbell, Rebsamen & Assocs. Inc., Little Rock, Ark.
From AA&B May 1971
We now have a simple solution to the problems of eligibility, classification and rating.
The pleasure boat market is expanding rapidly in our area, and we are using one of the industry's new programs to take full advantage of it. We now have simplified, realistic solutions t the once-complex problems of eligibility, classification and rating, and they have given us a running start on acquiring a substantial volume of this profitable boat business.
During the initial years of the boating boom, many agents ignored the market because of the problems involved in writing and placing the business. The new programs alleviate those problems and make pleasure boat insurance a very attractive line.
Of particular value to us in the new program is the approach to eligibility identification and rating. There was a need for a fresh, uncomplicated approach to the problem of separating large craft from small craft, and we have found the new program makes it much easier for us to rate small boats, yacht and other recreation craft intelligently.
We use The Hartford's "Pleasurecraft" program, and it uses 21 feet as its major guideline. Under this system, we need only determine the overall length of the hull, either actual or rated, in order to determine eligibility. If it is 21 feet or less, it qualifies for the program regardless of method of propulsion - outboard, inboard, inboard-outdrive or sail - and regardless of the hull type - open cockpit runabout, cruiser or sail. Once we have determined eligibility, the only additional information we need in order to develop the basic premium is the state in which the owner resides, the form desired, values, horsepower and liability limits required. It's as simple as that!
This essentially is the same boating program that is available from other companies in this field. Some have settled on either shorter or longer lengths as the cutoff point before the yacht classification, and each offers its own minor product variations. Most of the new boat insurance programs are designed to simplify the procedures, meet the demands of the market and encompass the necessary competitive features and capabilities all at the same time.
In the Hartford program, for example, a significant change has been made this year to ease rating problems. Under the new plan, the distinction between inland and coastal operation is eliminated. The distinction was made originally to reflect the increased hazards believed to be involved in coastal operation. It ahs been found, however, that although such operation certainly is different from that on inland waters, it is not necessarily more hazardous. A boat that is operated on an island lake containing submerged stumps or other debris may be just as likely to suffer a loss as a similar craft subject to the bad weather and rough seas of coastal waters.
Further 1971 improvements include adjustment of the credits available on hull premiums. An additional 5% credit now is extended for each U.S. Power Squadron course completed successfully with a maximum 10% credit available. The credit for sailboats also has increased from 15% to 20%. While yacht programs are available for insuring larger boats, it has been pointed out by the U.S. Coast Guard that 90% of the country's 8.4 million registered boats are less than 21 feet in length. That's what we call a booming market, and with the new programs that are available, we are getting our share of it.
Charles C. Campbell has been in the general insurance business for 25 years. He is executive vice president of Rebsamen & Associates. He is a past member of the executive committee and past chairman of the casualty committee of his state agents' association, and he has been active in committee work for the Southern Agents Conference. Mr. Campbell is the current International President of Optimist International, and he is active in a number of other civic organizations.
