On September 18, 2015, The U.S. Department of the Treasury released new rules surrounding U.S. travel to Cuba. The administration lifted the prohibition on boating to Cuba and Cuban waters. While the intrigue is enormous, Florida boaters should be cautious before making plans for such a Caribbean voyage. Although the U.S. government has liberalized the rules, there are many unique conditions that should be considered; political risk, crime, navigational limits available on current insurance policies, just to name a few.
The new regulations bring the marine insurance industry into uncharted territory. Insurance companies are not yet offering coverage extensions for destination Cuba. The reasons that the carriers may be slow to respond are as follows:
- Conflicting laws and regulations between U.S. agencies
- Lack of familiarity with Cuban laws which may govern in civil and criminal matters
- Lack of knowledge and limited opportunities for subrogation
- Additional expense of sending marine surveyors and claims adjustors
- Unknown/adequate repair facilities
- Access to repair parts
- Towing charges if the vessel had to be repatriated for repair
- Technical complications associated with endorsing in force policies
- No underwriting data to base rates on
It is uncertain when insurance companies will offer this coverage to the recreational boater. In the meantime, boaters are reminded that property and liability coverage only applies to claims which occur within the navigational limits stated in the boater’s policy. Wallace Welch & Willingham will stay attuned to this situation and will continue to post updates.