He reported a tremendous softening in insurance prices, with double-digit decreases in some cases.

In the case of a 39-foot boat that he handles, Mr. Cracco said, “This year it's a 20 percent decrease for the same exact boat.”

The economic problems are impacting his marina business as well. He sees them going out of business or cutting back on insurance as their repair business plummets, as more boaters cut back on usage, and less of them need to be towed in.

Steve Ruchman, a past president of the National Association of Professional Insurance Agents and president of Ruchman Associates Inc. in Rockville Center, N.Y., said he does not see rates decreasing by 20 percent, but acknowledged that insurers are now very competitive for boaters' business.

Insureds who shop can easily steer their way to a good deal, he said, adding that competing companies may not be advertising lower rates, but they “do whatever [it takes] to get the price down” and are very creative in offering deals.

If they are unable to lower the premium, Mr. Ruchman said carriers will negotiate on coverage terms and conditions, with areas of discussion including lay-up periods, permitted navigable waters and towing.

In addition, the more electronic navigation equipment an owner has, the more premium credits a carrier is generally willing to give, he advised.

Howard Reif, with Sullivan and Strauss Agency in New Hyde Park, N.Y.–which trades as SkiSafe–said companies that left the market after the extensive boat losses from the hurricanes of 2005 are now back in. “They have a short memory,” he quipped. He said he has seen ACE, Allstate, Nationwide, Progressive and Zurich all show a greater appetite for business.

Meanwhile, Mr. Reif said the competitive challenges in the small-boat insurance market are increasing because of plunging boat sales. Purchases are down 20 percent, he said, adding: “I don't see it getting better.” Making matters worse, he added, is the fact that “we are at a point with more boats for sale than I have seen in the last 15 years.”

He remarked that “there has been a drastic credit crunch affecting the recreational marine market in a bad way,” with loans for boat purchases hard to come by and many who took out loans to buy boats going into default.

All this translates into a smaller marketplace for the insurance industry, according to Mr. Reif.

“Generally speaking, insurers who specialize in boats are seeing a significant drop in business this year,” he declared, noting that rates are particularly soft for boats located on inland lakes or rivers.

However, for big boats–those mega-yachts that measure 100 feet or longer and cost $5 million or more–it's a very different story.

Sean Blue, yacht director for the AIG Private Line Group in Seattle, said that for such maritime heavies, “there is a large demand and a high waiting list at some of the larger yacht shipyards.”

The competition is limited among carriers who take on such risks, he said, because “not many can insure a $100 million yacht.”

He said the AIG private line yacht sector is six years old, and retention of clients has been very good, as has growth, noting that the company is adding staff and products.

“We expanded into the European market and have offices in Dubai, Sydney, Hong Kong and London,” he said.

One of the risks involved with mega-yachts is piracy–particularly in Southeast Asia, according to Mr. Blue, who said AIG checks the owners' security precautions for those waters, pointing out that some are shadowed by security boats.

Mr. Ruchman said the boating endeavors of the rich are not affected by gas prices.

Indeed, while small boaters are traveling shorter distances and spending most of the day at anchor, he noted, when the topic of gasoline came up with one of Mr. Ruchman's clients who recently bought a $500,000 boat, the owner said, “'I'm not concerned about [gas prices].' His yacht club squadron is part of his social life.”

Mr. Reif would agree. Indeed, after cataloging the difficulties in the small-boat market, he remarked that “most of this does not affect the 100-foot plus mega-yachts.”

At Travelers, Chantal Cyr, vice president of personal insurance for boats and yachts, said her company, unlike some others, has had a long-term involvement with the small-boat market. She said there had been four new entries this year.

The competition, she said, has led Travelers to review segments of the boat market that it had not written in the past.

Ms. Cyr said the company has been busy working with agents to help them develop new leads from boating registration lists, as well as urging them to cross-sell auto and homeowners books with boats.

She said the company has also sponsored three large boat shows in the Midwest, as well as salmon fishing derbies in the Seattle area. “The Midwest and West Coast is definitely where everyone is looking to grow,” she declared.

Still, the market for small-boat insurance is tough, she conceded, noting that in the current down economy, “people are thinking long and hard” before they buy a new boat.

Ms. Cyr observed that in the past, many had used the surplus equity in their homes to buy boats, “but with declining housing prices, it has affected the sale of new boats.”

Making matters worse is the fact that fuel prices at the dock are always higher than on the highway, while the miles-per-gallon for boats is generally far worse than the most gas-guzzling vehicle, she added.

Ms. Cyr said the gas price impact has caused owners to use their boats differently, noting that they are not “going full throttle.”

Neither is the boat insurance market, she might have added.