Difficulty With Insurance Company Claims

[Cohan85]

Hi guys,
bit of a frustrating one. After a few years of searching we finally found a suitable vessel to suit our needs and budget. Its a oldish 1985 simpson firebird 40ft catamaran and thing were looking great until we copped a larger than average wave at an awkward angle during rough conditions and split the bulkheads of the port side hull and a few cracks through the saloon area bulkhead on the delivery run home from east to western Australia. We were able to lower sails to reduce stress and motor into the nearest marina. The vessel was insured when I purchased it only 10 days prior to the incident. It was insured through the same broker as the previous owner and there was no survey requested as they had one on file from the previous year. The claim was filed and we found a suitable Shipwright in the area who quoted repairs and things seemed to be progressing ok. Now the insurance company is flat out denying the claim and saying that the weather was not extreme enough to cause the damage and that it was caused by improper maintenance. I find this ridiculous as it was clearly in good enough condition for them to insure it only 10 days prior and take my money for it! This has been going on for over 4 months now.

Has anyone had a similar experience and had a successful outcome and how did you go about it?

Appreciate your advice greatly as we are very frustrated and stuck with a busted dream.
Cheers

[Cheechako]

Tough one for sure. The problem with the lack of survey is that there was no proof that it wasn't an "existing condition" when you bought the boat. ie:damage was already there and getting the boat out in the sea made it obvious. OTOH, heck they insured it before, so either way they should have been liable for the damage right?

[Island Time O25]

I can't speak for the situation in Australia but here in US the insurance on 30+ year old boats is overall a losing proposition for the owners. By that I mean that if you have a $50K or cheaper boat and have "full" coverage i.e. not just liability, you will pay in 10 years probably as much if not more than the boat was initially worth. Definitely much more than it will be worth at the end of that 10 year period.

A marine pro friend who has been actively involved in all aspects of marine industry here in US for the past 20-25 years tells me emphatically that the insurance payouts here in US for the most part are a scam, rarely paying even 70-80% of what the real cost of fixing this or that problem. And for many owners your situation is more typical than not. Of course if one is an owner of a multi million yacht one by definition also has access to multi million attorneys who can harangue the insurance company all the way to the courts. But even then the insurance companies have usually even more robust legal defense, as well as time, on their side. So just like with the casinos - the odds are against poor old shmucks like us. ((

PS I would explore the possibility of finding a recently admitted attorney who is hungry for new business and would pursue this claim on contingency or mix - low retainer some contingency - basis.

[JTHAW]

Originally Posted by Island Time O25

I can't speak for the situation in Australia but here in US the insurance on 30+ year old boats is overall a losing proposition for the owners. By that I mean that if you have a $50K or cheaper boat and have "full" coverage i.e. not just liability, you will pay in 10 years probably as much if not more than the boat was initially worth. Definitely much more than it will be worth at the end of that 10 year period.

A marine pro friend who has been actively involved in all aspects of marine industry here in US for the past 20-25 years tells me emphatically that the insurance payouts here in US for the most part are a scam, rarely paying even 70-80% of what the real cost of fixing this or that problem. And for many owners your situation is more typical than not. Of course if one is an owner of a multi million yacht one by definition also has access to multi million attorneys who can harangue the insurance company all the way to the courts. But even then the insurance companies have usually even more robust legal defense, as well as time, on their side. So just like with the casinos - the odds are against poor old shmucks like us. ((

PS I would explore the possibility of finding a recently admitted attorney who is hungry for new business and would pursue this claim on contingency or mix - low retainer some contingency - basis.

Agreed to hull value policy is the answer...seemingly too late for the op...
I am about to insure with Foremost, a division of Farmers; my cost for full coverage is just over $700, though I have not had a claim , I strongly disagree with your opening statement...10 yrs of payments is not anywhere near close to value.
Can anyone shed light on Foremost? agreed to hull value policy seems excellent...and from what I have gleaned their reputation is very good...

[vjm]

Originally Posted by Island Time O25

I can't speak for the situation in Australia but here in US the insurance on 30+ year old boats is overall a losing proposition for the owners. By that I mean that if you have a $50K or cheaper boat and have "full" coverage i.e. not just liability, you will pay in 10 years probably as much if not more than the boat was initially worth. Definitely much more than it will be worth at the end of that 10 year period.

A marine pro friend who has been actively involved in all aspects of marine industry here in US for the past 20-25 years tells me emphatically that the insurance payouts here in US for the most part are a scam, rarely paying even 70-80% of what the real cost of fixing this or that problem. And for many owners your situation is more typical than not. Of course if one is an owner of a multi million yacht one by definition also has access to multi million attorneys who can harangue the insurance company all the way to the courts. But even then the insurance companies have usually even more robust legal defense, as well as time, on their side. So just like with the casinos - the odds are against poor old shmucks like us. ((

PS I would explore the possibility of finding a recently admitted attorney who is hungry for new business and would pursue this claim on contingency or mix - low retainer some contingency - basis.

A recently admitted attorney is possibly the biggest boon an insurance company can have on one of these cases. They are walking malpractice suits. Get a recommendation or two or three from your state bar and vet the hell out of them. And yes, I am a lawyer and have many friends on both sides of insurance cases.

[Paul L]

Originally Posted by JTHAW

Agreed to hull value policy is the answer...seemingly too late for the op...
I am about to insure with Foremost, a division of Farmers; my cost for full coverage is just over $700, though I have not had a claim , I strongly disagree with your opening statement...10 yrs of payments is not anywhere near close to value.
Can anyone shed light on Foremost? agreed to hull value policy seems excellent...and from what I have gleaned their reputation is very good...

Agreed value only comes into play when there is a complete loss or constructively a complete loss. It would not apply to the OP case, where the damage is repairable. The insurers claim that this was a maintainace issue seems pretty doubtful. What maintance do you normally do on a bulkhead -- change the oil every 10,000 miles Most policies do not cover manufacturing defects, which might be the next way they try and get out of a claim.

[JPA Cate]

A guy called something macca, also from WA, was reporting a sudden failure a couple of days ago, and with a similar title. In his case the company was Club Marine. He has sought the help of a lawyer, but had not yet resolved the issues.

I think you will probably get it covered if you keep after them. They'll drag their feet, but sometimes, the myth says that if they receive the letter on lawyer letterhead stating why, by the laws of the nation, they, should, indeed, pay up, then they think you're not going to just go away, and will negotiate a settlement. Of course, it is the lawyers who get rich off of this, and you will be out your legal fees, unless the court awards them to be paid by the insurance.

I think the fact that they had just insured it, and that very little time had passed for the boat to deteriorate will ultimately tell, in your case. Go for it. Do be polite, but extremely persistent. Tell them why their first concept was incorrect in great detail. At this point, just keep track of the bills, keep paying the shipwright, and keep explaining why they do need to pay.

[TWE]

I would also hire a top notch surveyor and get him/her to fight for you regarding what happened to the boat and whether it was poor maintenance or bad weather.

[foufou]

I agree with Anne T Cate. Persistence pays off. A few years back I had a claim that was denied. I spoke to a lawyer and an accountant who supported my position. In the States we have insurance commissioners who advocate for the insured. Just mention of my conversations and possibility of bringing in the insurance commissioner turned the tide. After a half hour I received a call back to tell me they were mailing a check. Keep after them

[gjordan]

Years ago I had about $20K flooding damage caused to my boat by a surveyor that the insurance company sent to survey my boat while it was on the hard, and I was away in the states. They denied the claim and I contacted a marine lawyer here in the States. They changed their tune right away and paid the whole thing. They cancelled me afterward, but I didnt want to deal with them anyway. If I had not put a lawyer on it, I would have gotten nothing from them. Insurance companies are sleazy. _____Grant.

[TWE]

I agree with Ann. We, too, had a claim that was denied by the insurance company. We worked with the state commissioner, filed a lawsuit, judge gave decision for us, insurance still denied. The final result was the state insurance commissioner made a suggestion that the insurance company may lose their ability to do business in that state. We finally got a check. Looking back we think hiring a very good surveyor to work for us may have helped when dealing with the surveyor that was hired, working and being paid by the insurance company.

[gjordan]

I just re-read Ann,s post. Yes lawyers make lots of money for a sometimes simple fix, but the $800 I paid her for a couple of letters and phone calls was much better than nothing, which is what I probably would have gotten without the lawyer. I dont hold lawyers in real high regard, but there are times when you cant do without them. _____Grant.

[Island Time O25]

Originally Posted by vjm

A recently admitted attorney is possibly the biggest boon an insurance company can have on one of these cases. They are walking malpractice suits. Get a recommendation or two or three from your state bar and vet the hell out of them. And yes, I am a lawyer and have many friends on both sides of insurance cases.

Over the years my own personal experience and that of those around me have taught me otherwise. Now, sure one would want to hire a smart competent lawyer in any event. But given a choice I will always go for a "hungry, right out of law school" type than for an established "well nourished, too many old clients-too little time for new clients off the street" type. And btw not just the insurance companies but many others hate dealing with a brash recently admitted attorney who has yet too few clients and too much time on his/her hands to pester them and consequently settle rather than go to court.

I once was told by an insurance industry insider that even a super well reasoned and written 1/2-1 page demand notice will get much less attention than a well written 3-4 page one, precisely for the reasons above.

[a64pilot]

Although insurance is of course you betting against yourself, and obviously insurance companies have to charge more than they pay out.
I just did the math on the agreed on insured hull value of my boat, in my case it will take 89.2 yrs before I have paid the insurance company the amount the boat is insured for.
I had to check that a couple of times as my math skills suck.

[verkerkbr]

It is really simple. You have to prove that the weather conditions were the cause of the damage.

Insurance Comp do this always, to see if a claim has come from "outside" conditions or from a construction/maintenance problem.

If it is a construction/maintenance problem you have to repair or to improve the construction at your own cost.

It has nothing to do with a survey.

Insurance is not for improving the construction or for maintenance.

Bram