Insurance on the High Seas

As you doubtless know from the media coverage, the Titanic sank 100 years ago last week. That disaster was long considered to be the most costly maritime insurance loss although the sinking of the Concordia Costa last year in Italy seems to have surpassed it. It’s interesting, therefore, that a Titanic insurance document has just surfaced for the first time in a century. The document, which records the total pay out of £4,000 (an estimated £263,000 or $419,432 in today’s money) by Royal Insurance, now part of the RSA Insurance Group has never before been seen by anyone outside RSA. This was only a small portion of the total insurance payments. As the ship’s hull and machinery was valued at £1 million, owners White Star Line would have had hundreds of different insurers.
The Encyclopedia Titanica has over 100 articles about insurance claims on the Titanic. Initial estimates two weeks after the disaster were that life insurance payouts totaled around $2.1 million, and accident insurance payouts came to a little more than $1.5 million. The industry estimated that life insurance losses would end up at $4 million, accident insurance losses at $2 million. Many passengers carried specific life insurance and travel policies while the survivors of other lost passengers filed claims against White Star Lines. One Mrs. Irene Harris claimed $1,000, 000 for the loss of her husband, a theatrical manager. The first claim settled was for a Mr. Ervin G. Lewy of Chicago and in a morbid note, the article comments that without a death certificate, the company had to “strain certain points” to allow the payment. Eventually, White Star paid $664,000 to settle all the claims.
In a fascinating look back at the insurance industry of a century ago, this New York Times article from April 1912 is highly complimentary to the insurers who settled the Titanic claims so quickly. It also notes that while in the age of sail, a ship was never declared lost until a year and a day after it was expected in port, modern technology – i.e., radios – had changed that age old rule and now ships were considered lost almost immediately upon the disaster.
While the golden age of ocean liners is undoubtedly past, cruise ships are at sea in record numbers. While the chances of anything happening on a modern cruise are so slight as to be almost nil, you, like John Jacob Astor, may want to consider buying travel insurance if you’re planning a voyage on the ocean deep. And you should periodically evaluate your life insurance coverage – a good idea whether you’ll be taking any ocean cruises or not. Your independent Renaissance Alliance insurance agent can help!
*Image source: PD-US – The Titanic