State of the Marina Insurance Marketplace

If you operate a marina in Arkansas, Missouri, Oklahoma, or Kansas, chances are you have had weather-related property damage sometime in the past 3-4 years. This four state region, as well as Tennessee, Kentucky, Alabama, Texas and others have all had significant and damaging weather events such as tornadoes, severe thunderstorm winds, and snow and ice storms. These storm events have wrecked many marinas and caused millions of dollars in damages that insurance companies paid out in the past several years.

This is a real problem in the marina industry because there are a limited number of insurance companies that choose to insure marinas because of the high-risk nature of experiencing catastrophic property damage claims. After the latest round of storms occurring in this region, the insurance companies have started reacting in various ways, which will impact marina operators.

Companies are getting much stricter with their underwriting guidelines and that will start to impact marina operators who have older docks. The underwriting rules are starting to result with increasing deductibles including wind, flood, hail, and collapse due to weight of ice/snow. Some companies are even starting to exclude collapse coverage in certain areas, on older docks, and on all wood frame docks. In addition to the increasing deductibles, we have started seeing increasing rates on docks. Due to the claims history in these regions, other insurance companies are not looking to get into the marina insurance business, which will keep the number of available companies very limited in the near future. Anytime you have a limited marketplace, there are fewer insurance options and that can lead to reduced insurance coverage as well as higher prices.

This can change, of course, if these regions have a couple of years of infrequent claim reports. When that happens, more money is made by the insurance companies leading these companies to relax underwriting rules in an attempt to gain market share and other companies will look to enter the marketplace as well.

What can a marina operator do when the insurance marketplace is so limited? A good risk management program and good dock maintenance program are critical to reducing the risk of property claims. When the marketplace is so limited and underwriting rules so strict, it is very important that efforts are made to reduce the risk of a claim. You definitely want to hire a marina insurance specialist as your agent because your agent can help you with your risk management program.

Doug Timmons, CIC, CMIP
Marina Insurance Specialist
Commercial Risk Service