After two winter sinkings in the Wrangell area, port commissioners and the harbormaster said the time has come to discuss a possible insurance requirement.
The subject has been on the commission’s agenda since the previous meeting in March. Discussion – commissioners took no vote on the issue – mentioned the requirement but also focused around possible alternatives to an outright requirement. Former port officials present at Thursday’s regular port commission meeting said a requirement had in the past faced criticism – and eventual defeat – along two lines. Owners of older boats say obtaining insurance may be next to impossible and all fishermen said a required policy could hurt their bottom lines.
The Feb. 13 sinking of the 38-foot wooden hand-troller Falcon in Shoemaker Harbor propelled the discussion to the forefront, though commissioners also mentioned the sinking of the 60-foot tug Silver Bay 2 at the 5.5-mile mill property Jan. 14.
Federal authorities intervened in the case of the Falcon and bore some of the cost of cleanup. A diver retained by harbor officials and some equipment used to relocate the Falcon out from underneath a pier are the outstanding costs remaining, estimated by harbormaster Greg Meissner at about $500. The boat’s owner is working out a payment plan with the city to cover the cost, Meissner said.
Cleanup for the Silver Bay 2 is still ongoing. Booms remain visible near the site of the sinking, and Meissner told port commissioners the act of raising the vessel will cost an estimated $100,000. A similar sinking in a borough-managed harbor has the potential to be a financial catastrophe, Meissner said.
“God forbid something like that happens in a harbor,” he said. “More times than not, they don’t have a bank account to handle it.”
Once a boat sinks, harbor officials are constrained in terms of avoiding costs associated with clean up, Meissner said.
“You gotta get it up out of the water, you gotta get it out from under the dock, so you do,” he said.
While the issue has surfaced in other public harbors in Alaska – most recently in Ketchikan, where it was met with similar opposition – officials typically retain enforcement flexibility, Meissner said. Juneau, Kodiak and Seward currently maintain policies related to insurance. Juneau charges a higher rate — 25 cents per foot per month — for boats without insurance, with the collected funds reserved for use in the event of a possible sinking, Meissner said. Under that standard, a typical boat like the Falcon would pay an annual rate increase of $114.
Kodiak has different insurance requirements for commercial, charter and recreational fishing, though harbor officials there typically don’t verify a boat’s insurance status apart from asking someone to sign a form stating they have the insurance, Meissner said.
Commissioners appeared to favor alternative means of girding for disaster to an insurance mandate.
“In simple terms, I was thinking of the typical surcharge,” said commissioner John Martin. “You come in at the end of the year and you get a discount. We’re not gonna demand that you get insurance, but you’re not gonna get your surcharge back.”
The issue will resurface until it is resolved, said commissioner Clay Hammer.
“I think this is an issue that just seems to not ever go away,” he said. “It keeps coming up again and again. I think it will continue to do that until we finally wrap our head around something and adopt some sort of plan. I think we should keep that on the table.”
Many boat owners already maintain insurance, making it doubtful that the borough would have to bear the cost of a disaster, said commissioner John Yeager.
“Is there that many boat owners that have insurance on their vessels?” he said. “I am insuranced to death. I can’t imagine a transient coming up here and wouldn’t have insurance on their boat. I’m not feeling like we’re targeting anyone, but if someone’s going to need our docks or use our services are they really not going to have insurance?”
Bill Knecht, a former port commissioner said he favored an alternative to an insurance requirement.
“Some years back we tackled this same issue and we met with a lot of resistance from the public,” he said, of his time on the commission. “I think there are several ways of handling this rather than requiring a person to have insurance. If you can present proof of insurance, you might get a discount in your moorage rate, something like that. I know a number of boat-owners in this community are self-insured. I think if you do pursue this you’re going to run into a great deal of public comment and resistance.”
At least one person present – Dan Miller — said he was more receptive to the idea of mandatory insurance, because it might prevent a rate increase to cover a large-scale sinking.
“This is just one of them situations where you’re not going to make any friends,” he said. “But if you look at it, if by chance one sinks, it’s still gonna cost us all, we’re all gonna pay for it. Mandatory insurance, I personally think, is a great idea.”
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