insurance - aarrggghhh!

[Paul45c]

OK, we've all had our sport bashing insurance companies before, especially for policies for here in Florida, but here's something else to add to the gripe file.

I've been getting set up to cover a boat I'm hoping to close on this week ('82 55c), and I was actually pleasantly surprised at the quote I received. I can't say it was FAIR (there's no such thing in Florida these days!), but it was actually less than that for my 2 years' newer 45c. So far, so good. But they said that the policy could not be bound until all survey deficiencies were cured. ??!! A) I don't own the boat, and B) typical to most surveys, the list was pretty long (I have to confess this boat hasn't had nearly enough love in the last 3 or 4 years, at least). When I presented this to my eminently reasonable broker, he said, "no problem, it's pretty typical to get them to give you up to 30 days to complete the work". Before he did that, I asked if we could whittle down the list I was being hung on to at least only those things that had any material bearing on safety (i.e. bilge pumps, seacocks, fire safety, etc.). "Nope," is what I got back. My broker has been down that road with Lloyd's many times, and he's never won that one. Some bureaucrat sees an item on the list, and said item has to be ticked off the list.

So, we went ahead and submitted the full list for the 30 days. Answer came back "no." OK, so I have to ask, is it typical/acceptable in the underwriting business to have boats in non-insurable condition going uninsured for even brief periods of time? Wouldn't it be more reasonable to just state that "yes, we'll cover your boat, but if any of the deficiencies gives rise to the claim, your claim will not be paid." In plain English, if a raw water cooling hose bursts and the boat sinks because you have bad/inadequate bilge pumps and float switches and the seacock is stuck open (and you didn't have the presence of mind to have shoring plugs aboard and handy), the company doesn't have to pay the claim since those faulty pumps, switches and seacock were flagged on the survey. Let the captain assume the risk on that one. Wouldn't that be reasonable? I just don't understand the game, I guess.

I guess they're basically forcing people into "unofficially" playing it that way, because if a claim arises and the underwriter investigates and finds an aforementioned and uncured survey fault to be the cause, I'm sure they'll have the basis to deny the claim. You end up in the same place. It just will force more people to be dishonest and say that they have completely fixed the whole survey list when everyone knows they couldn't have at the time coverage was bound.

 

[captddis]

It is a whole new world. My experience has been that items that are critical need to be repaired before use and lesser items in 30 days.
The ins people are getting real stupid, ie a cust had a survey and one of the items was a knotmeter paddlewheel was broken. They wanted it fixed ASAP and before coverage could be in force.

 

[Jaxfishgyd]

"I've been getting set up to cover a boat I'm hoping to close on this week ('82 55c), and I was actually pleasantly surprised at the quote I received...."

One really has to LOVE boating to put up with the B.S. we are forced to put up with...

 

[Boss Lady]

I would ask them if they would go ahead and insure it if it was put up on the hard, that way you are covered. Then you could get the work done without any risk. You can't really use it anyway so it should not matter to you whether it is in the water or not, but it may make the insurance company happy enough so you can close the deal and be covered.

 

[MarioG]

Remember, in florida there is no longer coverage available. what there is are companies willing to extort money out of us and the simple reason is because the can. god forbid you have a claim, be prepaired for the legal fight of your life. lloyds is covering our YF on an agreed value of $224K which is under insured. I had the privlage of forking over $7800 in premium up front. I was told to be thankful. I'm not holding my breath waiting for the renewal in a few months. Call me crazy, but in a way I wish there was no underwriters in Fl just to see what the bank will do. If I were a betting man I'd bet the bank and I would be stuck in a "catch 22".

that would force me to assume the liability because of no full coverage then again, would I have coverage if I put a claim in with what I've said above? Hmm...

 

[Angela]

Can't say I'm a fan of Lloyds anymore or any of the rest of those miserable b@#%&$*s. When I first bought my boat, peeling wallpaper, of all things, was on the survey list. I had to sign an affidavit that I put some seam glue on a wallpaper seam in order to effect coverage.

My last dealing with Lloyds....I spent thousands of dollars jumping through the "fix it all in 30 days and then coverage can be bound" BS and once I did that, they declined to write the policy with "we've changed our minds" as the only excuse - they would give me no other reason than that...honest!

And yes, it is common to go uninsured for months while trying to get either renewed or a new policy in place in Florida. I had an incredible amount of trouble getting a recreational policy written. When I changed my game plan and asked for a commercial policy, it was a done deal within about a week's time and I was on my merry way.

 

[Dave Phipps]

Most marine insurance policies are a real work of "art." To start with, even if coverage was bound, the language in the policy will usually contain wording to the effect that you agree to keep the vessel in seaworthy condition. So let's assume for the moment, to illustrate my point, that your surveyor found the vessel to have NO deficiencies...and that coverage was bound. Later, the boat sinks, and the insurance investigation finds that an engine room hose developed a crack, leaked, and that you couldn't get the associated sea cock closed to prevent the loss. Their conclusion: the boat wasn't maintained in a seaworthy condition, and no settlement is due the "insured."

Most lending institutions demand that their exposure on the loan is covered, and so you may find a "breach of warranty" clause that says even if you don't meet all the covenents and restrictions imposed by your policy, the policy will pay the mortgage holder. In some cases, the insurance company then retains the right (right of subrogation) to sue you for the monies paid out to the mortgage holder. So in effect, they paid the claim, but they can sue you to get their money back!

The bottom line is this: don't accept coverage or a binder UNTIL you've requested and read in complete detail a copy of the actual policy!!!!! Make sure you understand and can live with the "coverage" you're paying for...and don't be mislead by the quotes on the policy limits page.

Dave

 

[Angela]

I hear ya, Dave, but I haven't found a policy yet that didn't have all that BS that gives the insurer every excuse under the sun not to pay a claim. Very little is offered to us here in Florida and we have to resort to picking the best of all evils laid before us. I haven't had the pleasure of having a choice between a policy containing the crap you describe and one that doesn't. It's just not that simple here. Again, there's that Catch 22.

 

[Boatsb]

$7800 for 224 of coverage? Not too bad. They offered me $50K coverage with an $11K deductible for $2700. Guess what told them.

Come one really I said "I will take Liability only please"

 

[captddis]

BUS policy 205,000 agreed, 500,000 liability, 800,000 oil spill and 2,000 deduct. Hurricane deduct 5% tender and motor included 4500.00 in FL.

 

[skrmetta90]

When we bought our boat, i had 18 items that needed compliance in order to get insurance in place. I received 30 days to correct the conditions, one of which was a bent outrigger, another was an inoperable ice maker. I had to get an "outrigger specialist" to examine the outrigger and repair, per the insurance company. I purchased an outrigger specialist license on ebay and approved the condition of the outrigger.......... Oh, and the ice maker, i simply turned it on. I hope no one wonders why we as boat owners think the insurance companies are a bunch of crooked clowns.

 

[Angela]

BUS policy 205,000 agreed, 500,000 liability, 800,000 oil spill and 2,000 deduct. Hurricane deduct 5% tender and motor included 4500.00 in FL.

BUS is all over the place. They quoted me somewhere in the neighborhood of $18,000 for $225,000 value, $300,000in liability and a 5% deductible (and either 10% for storm or storm was excluded - can't remember now). I do remember the huge premium. I suspect that's BUS's way of saying NO without having to fess up to the insurance commissioner that they won't write policies in South Florida.

 

[Mako440]

Paul,
the same thing has been going on in the home insurance business as well. Insurance companies are requiring 3 & 4 point inspections to verify that certain systems have been upgraded.

They are also charging more for older homes, here, prior to 1994, because those homes may not meet the 1994 building code.

I have also heard that they won't insure your home if it has knob and tube wiring or fuses. Some won't write insurance if you have a certain type of electrical panel (Federal Pacific).

It doesn't surprise me in the least that this has trickled into the marine market.

 

[MikeP]

As far as having survey items repaired for coverage to be approved, I always tell the ins company, "Yes, they've been fixed," and sign whatever piece of paper they want stating that. That's always been good enough and I figure I'm not lying or cheating any more than they are.

The difference is that I actually will fix all the items at some point. Whether they will follow through on their insurance commitment if necessary is another issue.

 

[captddis]

BUS is all over the place. They quoted me somewhere in the neighborhood of $18,000 for $225,000 value, $300,000in liability and a 5% deductible (and either 10% for storm or storm was excluded - can't remember now). I do remember the huge premium. I suspect that's BUS's way of saying NO without having to fess up to the insurance commissioner that they won't write policies in South Florida.

I have been with then 22 years, maybe I get some credit for loyalty. nah.
I believe you are right. BUS does not want more boats in hurricane zones. I was told that BUS's carrier was very unhappy about their exposure to hurricanes after the 04 / 05 season.
Do we actually have a ins commisioner? You would never know it. More of my income goes to the insurance industry than goes to Uncle Sam!

 

[captddis]

As far as having survey items repaired for coverage to be approved, I always tell the ins company, "Yes, they've been fixed," and sign whatever piece of paper they want stating that. That's always been good enough and I figure I'm not lying or cheating any more than they are.

The difference is that I actually will fix all the items at some point. Whether they will follow through on their insurance commitment if necessary is another issue.

Me too. You have to play their game.

 

[yachtsmanbill]

BUS policy 205,000 agreed, 500,000 liability, 800,000 oil spill and 2,000 deduct. Hurricane deduct 5% tender and motor included 4500.00 in FL.

Make sure you have an oil spill endorsement. Ive got that even with my port risk policy. I copied this off of boatnerd today. Look at the quantities involved! ws

Fines imposed for pollution spills

10/24 - Montreal – Two separate investigations by Transport Canada recently led to charges in Penal and Criminal Court followed by an imposition of fines. The Italian-flag ship Crystal Rubino and the Canadian-flag ship Catherine Desgagné were both found guilty of hydrocarbon pollution.

Under the Oil Pollution Prevention Regulations and the Canada Shipping Act, Judge Pierre Fortin of the Montréal Criminal and Penal Court recently ordered the Crystal Rubino to pay a $15,000 fine for dumping six liters of hydrocarbon residues in the Saint Lawrence River. The discharge occurred April 18, 2004 when the Crystal Rubino was moored in the Port of Montréal and transferring hydrocarbon residues to a tank truck.

On the other hand, Judge Anne-Marie Jacques of the District of Richelieu Criminal and Penal Court found the Catherine Desgagné guilty of dumping about 10 liters of oily water from its machine room bilges into the Saint Lawrence River. An $18 000 fine was imposed on the ship. The discharge occurred on July 24, 2004 when the ship was moored at the Sorel wharf.

 

[Boatsb]

My company would not reissue the insurance until I had the surveyor come out and sign off the items were repaired. They told me this finally 2 days before it expired at 4:30 on a Thursday afternoon. I bet they though I would give up and leave them alone but I had the boat reinspected 2 weeks later and they now have my liability coverage. This was not for full coverage as they were getting to costly for the amount they would cover.

 

[captddis]

It seems ridiculous to even need a survey for liability. I guess they have to check the brakes and turnsignals.

 

[Boatsb]

I even changed the air in the tires. Randy ( freebird ) has similar issues as every time he meets the latest request they come up with a new one.