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Old 20-08-2014, 19:03   #1
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Insurance requiring the correction of survey issues 8 months after issuing a policy

We bought our boat in December of 2013 and we had a survey conducted which identified a some minor issues of which we were already aware, fire extinguisher inspection tags, smoke and CO detectors, a recommendation to replace the house batteries based solely on age, to add a visual signal to the auto bilge pump, add a reverse polarization indicator to the shore power system, GFI the AC system, replace expired VDS, add a gauge and leak shut off to the propane system, etc etc....I corrected most of these purely because I thought it was the best/safest thing to do.....I did not replace the house batteries (they are still serviceable and will be for 12+ months) or GFI the AC system yet or add a reverse polarity indicator to the shore power system.....

I recently received an email from our insurance broker (eight months later) saying that they neglected to have me sign a form stating that I had corrected ALL of the recommendations of the survey. Most weren't safety related (ie house batteries) or were ABYC standards established after the boat was built or modified. They failed to advise me of this requirement when I applied for the policy and if they had I could have used it has a basis for negotiating a lower purchase price. These modifications in total could amount to as much as $5,000 including new house batteries and wiring upgrades.

Does anyone have any experience with a similar issue and do I have any recourse against the insurance company if they threaten to cancel me or not renew my policy assuming I can't make the upgrades on their timeline.....

Please.....no "insurance is bad/unnecessary/ridiculous" comments......this is to be our primary residence and represents a good chunk of our total net worth.....so insurance is a necessity....

Thanks,


Sailing somewhere.....
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Old 20-08-2014, 19:10   #2
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

My company accepted an "action plan," rather than actually getting everything done. But then, they let me know up front that it had to be done in 30 days.
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Old 20-08-2014, 19:10   #3
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

I think you would have a fine case to argue after 8 months that you , in effect have entered into a contract with your insurers and its not reasonable to impose such conditions after that contract was entered into.

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Old 20-08-2014, 19:57   #4
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

Do what you want but:

1) They can cancel your policy at any time
2) If something happens to the boat they can deny the claim
3) You want to get renewed with the same company next year?

Sign the paper and fix the issues.

BTW - i was successful at having my insurance company remove some of their requirements simply by pointing out the nonessential. MY insurer went back to the underwriter only to find that they didn't need many of the survey issues fixed after all.
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Old 20-08-2014, 21:25   #5
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

I agree with Boss.

Take your list of items that are left, and either fix them, or explain why you shouldn't need to. If need be, commit to a timetable to have them done.

Batteries? Seriously? Age alone does not determine whether or not they need to be replaced.

Underwriters are human (I deal with them daily, in the real estate business). Give the underwriter some wins, and he/she will probably let the others slide.

P.S. When we bought our boat, they wanted us to recertify the liferaft. We pointed out that it's not required. They bought that.
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Old 20-08-2014, 22:42   #6
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

When we brought our new to us boat last year the insurance company told us they wanted some items fixed pretty much straight away. I called them to discuss this and we basically agreed that the items would be fixed "in due course" with the caveat that a loss of the vessel as a direct result of an unfixed item would negate the insurance. Perhaps you could call your insurers and work something out.
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Old 21-08-2014, 01:20   #7
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

Back up your points with data

i.e. ABYC and my battery maker do not recommend a periodic retirement of batteries. Attach the reference.

You should not have to do anything that is not regulatory, recommended by manufacturer or does not improve boat safety.
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Old 21-08-2014, 06:47   #8
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

Quote:
Originally Posted by Ex-Calif View Post
Back up your points with data

i.e. ABYC and my battery maker do not recommend a periodic retirement of batteries. Attach the reference.

You should not have to do anything that is not regulatory, recommended by manufacturer or does not improve boat safety.

I actually did that yesterday and the agent sent that info to the underwriter to get a decision.....thanks


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Old 21-08-2014, 08:46   #9
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

Quote:
Originally Posted by motaman9 View Post
1) according the Insurance Commission of NC they cannot cancel a policy mid-term once payment is accepted (NC Insurance Regulatory Reform Act of 1986 Article 41 58-41-5.)
.
"This
Article does not apply to insurance
written under Articles 21, 26, 36, 37, 45 or 46 of this
Chapter; insurance written for residential risks in conjunction with insurance written under
Article 36 of this Chapter; to marine insurance as defined in G.S. 58-40-15(3); to personal
inland marine insurance
; to commercial aircraft insurance; to policies issued in this State
covering risks with multistate locations, except with respect to coverages applicable to
locations within this State; to any town or county farmers mutual fire insurance association
restricting its operations to not more than six adjacent counties in this State; nor to domestic
insurance companies, associations, orders, or fraternal benefit societies doing business in this state"
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Old 21-08-2014, 08:54   #10
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

Quote:
Originally Posted by Greenhand View Post
"This

Article does not apply to insurance
written under Articles 21, 26, 36, 37, 45 or 46 of this

Chapter; insurance written for residential risks in conjunction with insurance written under

Article 36 of this Chapter; to marine insurance as defined in G.S. 58-40-15(3); to personal

inland marine insurance
; to commercial aircraft insurance; to policies issued in this State

covering risks with multistate locations, except with respect to coverages applicable to

locations within this State; to any town or county farmers mutual fire insurance association

restricting its operations to not more than six adjacent counties in this State; nor to domestic

insurance companies, associations, orders, or fraternal benefit societies doing business in this state"

That's not what they told me on the phone or in their email....I'll double check...thanks


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Old 21-08-2014, 09:23   #11
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

Quote:
Originally Posted by Greenhand View Post
"This

Article does not apply to insurance
written under Articles 21, 26, 36, 37, 45 or 46 of this

Chapter; insurance written for residential risks in conjunction with insurance written under

Article 36 of this Chapter; to marine insurance as defined in G.S. 58-40-15(3); to personal

inland marine insurance
; to commercial aircraft insurance; to policies issued in this State

covering risks with multistate locations, except with respect to coverages applicable to

locations within this State; to any town or county farmers mutual fire insurance association

restricting its operations to not more than six adjacent counties in this State; nor to domestic

insurance companies, associations, orders, or fraternal benefit societies doing business in this state"

I just got off the phone with the NCDOI they confirmed that I cannot be cancelled mid term without due process as outlined in my policy.....which means a minimum of 45 days.....and even if they do cancel me I can file a complaint....I also called the insurance broker and they confirmed that.....they also said that the underwriters already waived the house battery replacement (thank you Ex-Calif for reminding me to cite the sources). They will most likely waive the main breaker addition as well as long as it's on the "to do list"....thanks to everyone who posted something useful....



Sailing somewhere.....
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Old 21-08-2014, 09:40   #12
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

Can they cancel your insurance?
- Canceling without notice, they can't do.
- Canceling at the end of the current policy...they definetly can do.
- In between gets a little more fuzzy but now that they have notified you of the issues, if you don't correct them in a reasonable time frame, they can probably refuse to pay any claims that can be traced to the issue and it becomes a situation where they will try to link any claim to the issue and the burden is on you to prove it isn't related.

Your ability to get a discount on the sale price is not relevant. You had the same information available when you got the survey results. It's not the insurance companies responsiblity to negotiate a deal for you.

It's unfortuante but assuming it was an honest mistake, they are following up the way they should.

You can certainly highlight why some of these issues are not relevant to insurability but batteries definetly could be considered an insurance issue. Weak batteries may not run the bilge pump as long or pump as fast. If your anchor is dragging late at night, if you can't start the engine because of a dead battery... If you feel the batteries are good, a simple solution would be to offer to have them load tested. If they come back good the insurance company should have no complaints and let you out of that requirement.
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Old 21-08-2014, 09:54   #13
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

Quote:
Originally Posted by valhalla360 View Post
Can they cancel your insurance?
- Canceling without notice, they can't do.
- Canceling at the end of the current policy...they definetly can do.
- In between gets a little more fuzzy but now that they have notified you of the issues, if you don't correct them in a reasonable time frame, they can probably refuse to pay any claims that can be traced to the issue and it becomes a situation where they will try to link any claim to the issue and the burden is on you to prove it isn't related.

Your ability to get a discount on the sale price is not relevant. You had the same information available when you got the survey results. It's not the insurance companies responsiblity to negotiate a deal for you.

It's unfortuante but assuming it was an honest mistake, they are following up the way they should.

You can certainly highlight why some of these issues are not relevant to insurability but batteries definetly could be considered an insurance issue. Weak batteries may not run the bilge pump as long or pump as fast. If your anchor is dragging late at night, if you can't start the engine because of a dead battery... If you feel the batteries are good, a simple solution would be to offer to have them load tested. If they come back good the insurance company should have no complaints and let you out of that requirement.

I agree.....they can't cancel me at any time without process and notice which means 45 days, they also don't seem eager to lose the business and I'm not talking about suing them for the difference it could have made in any way. I planned to correct all the issues in due time....just not eight months in with little to no notice.

They already waived the house battery replacement requirement so that one is moot.....it certainly would have been nice to know when the transaction occurred though.....I think it was, however, their duty to disclose the potential requirements prior to accepting my payment.

My bilge pumps run off separate (new) batteries....I also have the ten House batteries that were at issue but now are not......


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Old 21-08-2014, 10:17   #14
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

You need a new insurance company.
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Old 21-08-2014, 10:20   #15
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Re: Insurance requiring the correction of survey issues 8 months after issuing a poli

In the end one of you is going to cancel the policy, start shopping!
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