Eye on Boats and Marinas

Marine Broker Shares Views on the Current State of the Market

The marina and boat industry is a natural fit for John Harvey, founder and president of Voyager Insurance Services in Frisco, Texas. Harvey has been in the insurance business for 50 years and has been a boat enthusiast since his childhood.

“I grew up enjoying boating as a child with my family and have had a boat since I was in high school,” Harvey said.

Since 1958, Voyager has served its community as a full-lines independent insurance agency, but made the decision in the late 1980s to target marine insurance as the agency’s primary niche market. “We had many boat owners as clients and started attending all of the boat shows in Texas and the surrounding states,” Harvey said. “We decided to start marketing nationally and are now licensed in 40 states.”

The marine insurance industry has changed like many other insurance markets. Even so, Harvey says it continues to be an excellent niche for his agency.

“We have a full brokerage department to help retail agents looking for boat markets for their clients. We also work closely with boat dealers and provide insurance binders for their new clients purchasing a boat,” he added.

Insurance Journal asked Harvey his views on the current state of the market for marinas and boats. Here’s what the marine specialist and life-long boater had to say.

How is the economy affecting the marine industry?
Harvey: We work with many new boat dealers who report that their industry has been severely impacted. There have been a number of boat dealers that have filed for bankruptcy and left a very large inventory of mostly 2008 boats sitting unsold. Many dealers are buying this inventory rather than ordering new boats because the inventory is deeply discounted.

Another issue affecting their sales is their floor plan financing companies’ refusal to lend the full amount of their credit line and controlling how much inventory they can buy. Dealers report that getting a customer approved for financing has become quite difficult with several national banks exiting the boat financing market. Those left have severely curtailed their lending except to the very highest credit scores.

Boat dealers advise that this is an excellent time for the consumer to buy due to the deep discounts being offered; however, many consumers cannot qualify. Boat dealers also advise that their customers who usually pay cash are holding back to see what happens with the economy.

Attendance at the winter boat shows was down dramatically. The Dallas Boat Show actually closed for Monday, Tuesday and Wednesday nights due to poor attendance. However, dealers reported the people who did attend the show were there to purchase.

Our marina clients report much of the same. They find slip rentals have dropped significantly and many see people canceling their slip rental and taking their boats into dry storage or putting the boat back on a trailer. While fuel has dropped significantly, the consumer is too fearful of returning to $6 to $7 per gallon gas [prices], so many large boats are on the market. Again, credit is very tight with almost no movement in financing for large boats, even with excellent credit.

Are you a boater as well?
Harvey: I have been boating since childhood with my family. I built my first boat in my high school woodshop class. My mother always used to shudder as she talked about watching her entire family pull away from the dock in that homemade boat, hoping and praying everyone returned to her safe. My wife and I have owned a number of boats but we have developed a passion for old wooden boats. I purchased my first wooden boat in 1985 and still have that boat, a 1952 Chris Craft Custom Sedan named “Unforgettable” (Golden Pond boat with a hardtop). … My wife and I have become very involved in the “International Antique and Classic Boat Society” where I served as president in 1999 and 2000.

What’s your best claims story?
Harvey:Unfortunately, there have been many claims stories. I don’t have a best, but I will say that Hurricane Ike was absolutely devastating to our boating clients on the Texas coast and very little has been reported. We have many people who have still not found their boats and are trying to get their claims settled. Our marine companies responded quickly and were able to get most claims handled within a week to 10 days. Considering the circumstances, we were very pleased with our insurance companies’ responses.

Voyager offers full online quoting for any size boat for insurance brokers at: www.agent.voyagermarine.com.

Topics Texas Agencies