After a recent fire put the Ketchikan harbor department at risk of a lawsuit for not requiring boat owners to carry insurance, the Wrangell Port and Harbors Department is considering issuing an insurance requirement for vessels, though the decision-making process is still in the early stages.
At the Ketchikan harbor, the owner of a boat damaged in the fire aboard a nearby vessel has threatened legal action against the city for losses.
According to Wrangell Port Director Steve Miller, the borough harbor department is weighing its funding needs against the burden that an insurance requirement might place on users. “We’re trying to be sensitive to all the issues, but the city needs to be protected,” he said. “We’re trying to figure out what’s fair to the community.”
When uninsured boats sink, the harbor foots the bill for removal and cleanup. Over the past five years, the department has spent more than $60,000 disposing of impounded vessels, according to borough documents. The department calls high disposal costs “a long-term issue,” and suggests that the money budgeted for vessel disposal would be better used investing in port and harbor infrastructure, like replacing 50-year-old floats.
Vessels don’t sink every year, Miller said, but when they do, the harbor pays a high price. There is always “the potential that it could happen.”
Before moving forward with a decision, Miller plans to hold multiple public hearings, both at the port commission and borough assembly, to allow community members to voice their opinions on a possible insurance mandate.
Area harbors are divided about whether insurance should be a requirement. Kodiak, Seward, Whittier and Juneau harbors all have provisions mandating that boat owners insure their vessels, but Petersburg, Sitka and Ketchikan harbors do not. Many harbor departments in Southeast are having similar conversations, Miller explained. “We’re not the only ones … fighting the battle to try to recover costs.”
Boat insurance mandates are the industry standard for harbors in the Lower 48, but less so in Alaska, he said. He doesn’t know what percentage of the vessels currently moored in Wrangell are insured, though any boats used for commercial purposes like fishing or chartered tours would already be covered.
Because the harbor department does not track which of its customers are or are not insured, it is “really hard to tell” how many people would be affected by a requirement, he said.
It’s also difficult to estimate the amount of financial burden that owners might incur, since insurance premiums vary widely from vessel to vessel and from operator to operator, according to Nicole Olsen, of Petersburg-Wrangell Insurance, the company that insures most of Wrangell’s boats. A vessel’s age, size, condition and hull material, along with its operator’s age and its areas of operation, are all involved in calculating cost, she said.
Miller hopes to develop a poll to gauge how many harbor users are already covered and how users feel about a potential mandate. Once the poll is developed, he plans to make it available on the borough website.
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