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View Poll Results: Can insurance companies endanger lives
yes 4 15.38%
no 12 46.15%
maybe but only inadvertently 1 3.85%
if it impacts their bottom line they will 10 38.46%
Multiple Choice Poll. Voters: 26. You may not vote on this poll

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Old 05-11-2022, 07:43   #46
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Re: can insurance companies endanger lives?

As I read through this thread, I think it just illustrates how corporations will always put profit at the top of their priority list. Heck, they have a legal duty to do so. Insurance companies are no different.

Insurance companies maximize profit (in part) by minimizing payouts. So no one should be surprised to see an insurer resist paying out, and working hard to try and get a claim payment as low as possible.

With regard to the dude's claim that his company had a duty to disclose known issues ... was this a clear legal responsibility established in Australian law? Or is this one of those warm fuzzy commitments corporations often sign on to, but have no legal teeth and are soon forgotten when it clashes with their primary goal?

If it is a clear legal responsibility, then you can sue them. In extreme cases, they could be found to be criminally negligent. But if this is just a 'moral responsibility,' well, corporations are not human. They have no morals. They don't care if you live or die, except as it affects profit.

On the core question: can insurance companies endanger lives? It's a bit loaded, but clearly they can, and do, all the time. They do so in the sense that they underwrite risk, and some of these risks could lead to the death of their clients. So "endangering lives" is really part of the business.

BTW, I sympathize with your situation Dude. From what you say, they did have a moral obligation to disclose known issues. But again, expecting a corporation to act morally is wishful thinking. They do what they must (through law). If they breached the law, you can sue them. Otherwise, you're banging your head against a brick wall.
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Old 05-11-2022, 07:48   #47
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Re: can insurance companies endanger lives?

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Originally Posted by thinwater View Post
There are two assumptions which I don't think I accept, or at least not without limitation:
  1. They could have left earlier. I doubt the coverage date was not known far in advance.
  2. They could have sailed without insurance or waited until the season passed.
The "felt" they had to go, but the insurance company did not tell them to. The insurance company only told them that their coverage would be interrupted, not what to do.

Do we decide to sail based on insurance (someone else will pay) or based on seamanship? It should always be the latter, as though there were no insurance. If it is not safe for the boat, it is not safe for you and not fair to place that financial burden on another.
Agreed! They should have waited for an appropriate window and sailed without coverage. I sometimes wonder if people with insurance consider a decision like this and conclude "Well, it would be better to wait, but since I have insurance..." - seems crazy to me.

This is one of the reasons I have operated for 20 of my 21 years cruising/living aboard without insurance (except for liability which I pick up when I need to reside in a marina) - I figure if something serious happens I will probably be dead anyway. And if I live through it, I will pay the piper. My first year I paid $9k for insurance, then cancelled it. Over the 20 years since I figure I've saved at least $180k since then by not having it (far more than any claims I might have successfully made over the years).

I often wonder reading threads on CF about insurance if I am the only lunatic who takes this risk without a second thought? Don't want to derail this thread, but it seems to have run its course anyway, so... am I alone in operating without insurance?
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Old 05-11-2022, 07:50   #48
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Re: can insurance companies endanger lives?

ok, i'm sure this is gonna bring some heat but ....

I quit doing insurance claims surveys years ago out of sheer disgust.

Now I'm going back about 15yrs so the numbers may or may not be scaleable.
The vast majority of claims I was involved with were paid out.
The vast majority of claims I was involved with were falsified in whole or in part

Insurance companies are about numbers, and they know them well. I found that claims up to about $25k were paid out just to make them go away no matter how falsified they were.
Claims up to about $50k were paid out after some pushing, again no matter how falsified.
Claims at $100k or over, you better be as pure as distilled water because they are going to scrutinize every comma in your claim.

Paying out on a $25k - $35k claim, false or not is cheaper than investigating it or fighting it in court. They will fight if the numbers get high enough and thay have suspicions.

My disgust with the system was due to the staggering number of outright false and highly exaggerated claims that were paid out routinely.

One example ... 35' twin shaft drive powerboat claimed two blown engines. Claimed he sucked up one plastic bag on each intake at the same time and destroyed the engines. His claim was for $40k.
I pulled both shredded impellers and proved by the part numbers stamped on the sleeve that they were original to the 20 year old boat. A clear case of failed maintenance and not insurable.

One letter from the claimants lawyer got him a $40k cheque. It was cheaper to write the cheque than fight it. We all pay for this nonsense and it is rampant.

PS. I'm currently involved as an expert witness against an underwriter. It's an interesting story that I'll tell you about once its resolved ... in a year or two
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Old 05-11-2022, 08:01   #49
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Re: can insurance companies endanger lives?

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Originally Posted by jordanbigel View Post
I often wonder reading threads on CF about insurance if I am the only lunatic who takes this risk without a second thought? Don't want to derail this thread, but it seems to have run its course anyway, so... am I alone in operating without insurance?
I suspect this warrants a whole new thread Jordan. I've often argued that insurance is simple ONE way to mitigate risk, and sometimes the money spend on it could be better applied to ACTUALLY reducing risk on a vessel.

Disclosure: I have full coverage (hull and liability), but if I ever leave Canadian waters, I highly doubt I'll be able to afford comprehensive insurance. I have zero qualms in travelling without hull insurance, although I'd like to maintain liability if possible.

Ann's story, while a bit extreme, is actually quite common in my limited experience. I've heard many stories from people on the east coast of North American and how they structure their cruising life around insurance demands over hurricane coverage.
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Old 05-11-2022, 08:07   #50
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Re: can insurance companies endanger lives?

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Originally Posted by goboatingnow View Post
Yes and no.

For Example Pantenious Europe do not cover rigging failures due to bad maintenance. Hence the onus is on the owner to ensure a mast rigging failure is not due to poor maintenance. The insurer will use its surveyor to determine if the rig fails due to poor maintenance.

Hence for example Pantenious Europe don’t ask for boat or rigging condition surveys , if a claim is made and the results are maintenance related no claim will be paid.


Hence Pantenious have no interest in any survey you do. That’s purely for you the owner. They simply accept your signed statement that that boat is in good condition and complies with other undertakings your agree it has so compiled.
I actually find that pretty scary and never heard of that before. It leaves the door wide open to easily refuse a claim, perhaps too easy. I would not be comfortable insuring with a company that practices that.
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Old 05-11-2022, 09:25   #51
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Re: can insurance companies endanger lives?

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Curiously every single one of those items could be damaged by a lightning strike. Do you not think they should be inspected ? Do you not think the insured should be made aware of the results of inspection ?
If you make a claim they will be inspected and if corrosion has occurred in the component which failed and found to have been the proximal cause of the failure your claim may be rightly rejected.

There is generally some sort of due diligence clause in a well written insurance policy and if you are not duly diligent in preventing the corrosion (generally considered a manageable risk) the failure may be considered an inevitability and not an insurable risk.

Lightening strikes are unpredictable events, the charge buildups which initiate them may occur anywhere and if your boat happens to be the place it may be the victim even though other vessels may be in proximity. Consequently it is almost a classical instance of an unmanageable risk. However, if your boat is kept in a place where lightening strikes on vessels are common an insurer may not wish to accept the risk and exclude it. So the basic rule in assessing whether a claim is valid or not is whether or not the risk was excluded and if not whether it was manageable with due diligence.
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Old 05-11-2022, 09:38   #52
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Re: can insurance companies endanger lives?

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Originally Posted by boatpoker View Post
ok, i'm sure this is gonna bring some heat but ....

I quit doing insurance claims surveys years ago out of sheer disgust.

Now I'm going back about 15yrs so the numbers may or may not be scaleable.
The vast majority of claims I was involved with were paid out.
The vast majority of claims I was involved with were falsified in whole or in part

Insurance companies are about numbers, and they know them well. I found that claims up to about $25k were paid out just to make them go away no matter how falsified they were.
Claims up to about $50k were paid out after some pushing, again no matter how falsified.
Claims at $100k or over, you better be as pure as distilled water because they are going to scrutinize every comma in your claim.

Paying out on a $25k - $35k claim, false or not is cheaper than investigating it or fighting it in court. They will fight if the numbers get high enough and thay have suspicions.

My disgust with the system was due to the staggering number of outright false and highly exaggerated claims that were paid out routinely.

One example ... 35' twin shaft drive powerboat claimed two blown engines. Claimed he sucked up one plastic bag on each intake at the same time and destroyed the engines. His claim was for $40k.
I pulled both shredded impellers and proved by the part numbers stamped on the sleeve that they were original to the 20 year old boat. A clear case of failed maintenance and not insurable.

One letter from the claimants lawyer got him a $40k cheque. It was cheaper to write the cheque than fight it. We all pay for this nonsense and it is rampant.

PS. I'm currently involved as an expert witness against an underwriter. It's an interesting story that I'll tell you about once its resolved ... in a year or two


Similar experiences.

I was amazed at the number of claimants who had not bothered to read their policy documents or if so to understand them, until after they had lodged the claim.
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Old 05-11-2022, 09:38   #53
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Re: can insurance companies endanger lives?

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Originally Posted by RaymondR View Post
If you make a claim they will be inspected and if corrosion has occurred in the component which failed and found to have been the proximal cause of the failure your claim may be rightly rejected.

There is generally some sort of due diligence clause in a well written insurance policy and if you are not duly diligent in preventing the corrosion (generally considered a manageable risk) the failure may be considered an inevitability and not an insurable risk.

Lightening strikes are unpredictable events, the charge buildups which initiate them may occur anywhere and if your boat happens to be the place it may be the victim even though other vessels may be in proximity. Consequently it is almost a classical instance of an unmanageable risk. However, if your boat is kept in a place where lightening strikes on vessels are common an insurer may not wish to accept the risk and exclude it. So the basic rule in assessing whether a claim is valid or not is whether or not the risk was excluded and if not whether it was manageable with due diligence.
I understand that quite well however, in the OP's case as I understand it, they did pay the claim but failed to do a full inspection. This is a different issue as I see it.
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Old 05-11-2022, 09:52   #54
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can insurance companies endanger lives?

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I actually find that pretty scary and never heard of that before. It leaves the door wide open to easily refuse a claim, perhaps too easy. I would not be comfortable insuring with a company that practices that.


I think too many boaters work on the basis that of any insurance company accepts a risk then the boat must be ok.

This is a fundamental misunderstanding of insurance

Insurance is in the business of risk evaluation they will have broad rules for what they cover.

But they mostly rely on you the insured to relay to them what the “ truth” is. This is where people think lying to get insurance means they are insured, they are not.

As I said insurers are not experts on the condition of “ your “ boat. You are expected to be.

Hence they say “ Owner is it in good condition “, “ you say” “ yes” , “ ok they say , here’s your insurance

Insurers know nothing about boats. They are not in the business of telling you your boat is “ safe “. Your in that business.

I would also agree that the main problem is insurance pays out too much too easily. This drives costs up.
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Old 05-11-2022, 10:19   #55
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Re: can insurance companies endanger lives?

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As I said insurers are not experts on the condition of “ your “ boat. You are expected to be.

Hence they say “ Owner is it in good condition “, “ you say” “ yes” , “ ok they say , here’s your insurance

.
In my experience the underwriters rely on the surveyor to determine that.
I would never trust the few underwriters that do not require a survey.
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Old 05-11-2022, 10:23   #56
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can insurance companies endanger lives?

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In my experience the underwriters rely on the surveyor to determine that.

I would never trust the few underwriters that do not require a survey.


No they do not. The surveyor report is drawn up for you. You pay it. It’s drawn up where either of the insurers have doubt over your ability to assure them of what you claim.

In reality it’s drawn up for you and paid by you.

Again it’s not the insurers determining what’s safe , it’s you aided by a professional surveyors opinion.

In my case I often use the purchase survey carefully re worded for the insurers as it’s a different audience.

It’s no different to what I say.

Whether I pay a surveyor or i state the condition , the insurers are not determining the condition they are asking for my “ professional “ statement.

Insurance works on the basis of being hung by your own petard.
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Old 05-11-2022, 10:32   #57
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Re: can insurance companies endanger lives?

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No they do not. The surveyor report is drawn up for you. You pay it. It’s drawn up where either of the insurers have doubt over your ability to assure them of what you claim.

In reality it’s drawn up for you and paid by you.

Again it’s not the insurers determining what’s safe , it’s you aided by a professional surveyors opinion.

In my case I often use the purchase survey carefully re worded for the insurers as it’s a different audience.

It’s no different to what I say.

Whether I pay a surveyor or i state the condition , the insurers are not determining the condition they are asking for my “ professional “ statement.

Insurance works on the basis of being hung by your own petard.
My experience and judgement is somewhat different than yours.
I doubt we'll ever agree on this issue.
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Old 05-11-2022, 12:43   #58
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Re: can insurance companies endanger lives?

GoBoatingNow said: "[underwriters and agents] mostly rely on you the insured to relay to them what the “ truth” is. This is where people think lying to get insurance means they are insured, they are not."

Indeed! The insurance industry is in many, many ways horribly old-fashioned as to norms and mores. It is expected "in the industry" that all concerned act "in utmost good faith", and that a man's word is his bond. Thus the terminology, for instance, of "binding" a policy, i.e., of bringing a policy into force in the expectation that a premium not yet paid will indeed be paid.

If a policy holder can be shown to have acted in any respect in anything but "utmost good faith", the policy in question is void, i.e. the bet is off.

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Old 05-11-2022, 12:49   #59
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Re: can insurance companies endanger lives?

If your car gets hit in a fender bender with your car, is the insurance company responsible for inspecting your brakes and re-lining them? No.
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Old 05-11-2022, 14:37   #60
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Re: can insurance companies endanger lives?

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If your car gets hit in a fender bender with your car, is the insurance company responsible for inspecting your brakes and re-lining them? No.
If you claim the bender was caused by failed brakes, they will pay for the inspection.
If it turns out to be normal wear and tear or lack of maintenance ... you're out of luck
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