Highlights of the Maine Lobstermen’s Association: Vessel insurance program

First published in the MLA Newsletter, September, 2011.

Since its very earliest days, the Maine Lobstermen’s Association has offered its members benefits that they could not get elsewhere. From health insurance, low interest-rate loans, or simply discounts on fishing equipment and services, benefits have always been part of the MLA membership package. And a constant among them has been the vessel insurance program.

Back in the 1950’s MLA’s first president Leslie Dyer set up an insurance program for MLA members’ vessels that continues to this day. Dyer, who once worked in the insurance industry, knew that lobstermen understood the sea better than most yacht owners. With dogged persistence, he convinced marine insurance companies to reduce hull insurance rates for MLA members.

Today that insurance program is offered through Smithwick and Mariner Insurance Inc. of Falmouth, Maine. Scott Smithwick is president of the company. “We picked up the program in 1990 with a couple hundred boats,” Smithwick said. “Now it’s doubled, to more than 450.”

The MLA members’ program offers hull insurance and protection and indemnity insurance through Great American Insurance Co. Smithwick said that part of the appeal of the program is that it has remained with that company for more than twenty years and that Great American Insurance is quick to respond to claims. “They are very responsive,” he said. “They don’t nickel and dime you.”

The MLA insurance program offers boat owners a broad sweep of coverage options, Smithwick continued. “It can cover vandalism, malicious mischief, pollution liability up to $1 million, reduced deductibles on electronics. We have consistently updated the policies to broaden coverage,” he said. The program even insures boats racing in the annual Lobster Boat Races, though not the boats’ engines.

Unlike many other marine insurance agencies, the MLA program covers older vessels at a consistent rate. “As boats get older, the insurance rates typically go up,” Smithwick explained. “We don’t. The overall rating system for commercial boats hasn’t changed.” The rate for fiberglass boats, for example, caps for vessels at 19 years. After that the hull insurance rate will not change. Older wooden vessels do see a rate change as they age, Smithwick said. However, most other marine insurance agencies won’t cover such boats at all.

The MLA insurance program provides an incentive for safety by offering an additional 5% discount if a member shows proof of having completed a Coast Guard approved Fishing Vessel Drill Conductor course within the last five years.

Insuring one’s vessel is both a necessary and expensive undertaking. Thanks to Leslie Dyer and subsequent MLA presidents, the MLA vessel insurance program continues to take the bite out of many lobstermen’s costs.