Insurance Nightmare

[PyotrBee]

In Aug 2010 my boat was in our local marina to have one of its engines put back in after an overhaul. It was in the corner and surrounded by 3 x 60' party day tripping cats, and with a 80' one right behind it. All of them have significantly bigger masts than my 36' cat.

Somehow ours was the one that was struck by lightening - not once, but twice. There were many live aboards in the marina as well as security and the dock master. There were several lightening strikes nearby and even live aboards were headed for land. This provided several witnesses. The first strike hit the VHF aerial atop the mast. The red hot aerial fell onto the flaked sail and went straight through (I have some pics if anyone is interested, I think I posted them here in Aug 2010). The second strike hit one of my wind gens.

Fortunately the dock master was alert. He ran to one of the party cats and took on of their fire extinguishers (mine were all inside) and put the fire on the sail out.

I raced to the marina. The stainless near one of the windgens was still too hot to keep your hand on very long, and was slightly deformed. Inside the cabin there was a smell of smoke coming from the main electrical panel. No electronics worked.... The fridge was ok, as was one of the engine consoles. Everything else - radar, gps, charge controllers, bilge pumps, one engine console, was all dead.

I next pulled out my insurance policy. Full coverage - EXCEPT there was a yearly depreciation on sails and electronics... Guess what the only items that I lost are? Electronics and sails. So I prepared to be reimbursed 15% for the sail and 20% for electronics. But they had to pay for labour, and that turned out to be a lot as the boat needed to be rewired. Ok... so this clause sucks.. but its the policy I had, my fault, my bad luck in such an incident.

The insurance company said I needed 2 estimates. We sailed it a few miles to a haul out facility and took it out of the water for the season. I got two estimates from the local places but they couldn't do most of the work. So I had to fly in several people at my expense. Finally around Nov the insurance company flew in their appointed adjuster. He said there needed to be a rigging inspection too. So I had yet another expense to fly in FKG rigging from St Martin. By now it was December.

The boat was not safe to go to St Martin and several items had to be ordered in to make the boat "floatable" to St Martin. The insurance adjuster dragged his feet for several months but finally approved one of the estimates and instructed us to get it to St Martin to Atlantis Marine. The boat needed some bottom paint and some work on the sail drives and for parts + work this caused about a 2 month delay that was purely mine.

Finally in May the boat barely made it to St Martin (not in good shape, and NO electric...). Final leg required a dinghy to tow it to the dock.

Now the insurance adjuster said he wanted 2 estimates. AGAIN?? We had already been instructed that Atlantis had been accepted and to take it to them. Now I was back in St Kitts and the insurance asked Atlantis to get competing estimates - against themselves. They made weird request like "must have 2 estimates from Raymarine dealers" - despite Atlantis being the only one in St Martin.... So garbage went on like this for quite some time.

Finally I complained to the owner of the survey firm and was informed that that particular surveyor had decided to leave and a new one was being hired. So I had to wait a few weeks. A new one did take his place and she flew to St Martin and go things moving. She also agreed to several things we had been fighting the previous one about. The previous one refused to agree to replace the wiring saying that "the parts I can see don't look burnt", despite most of the wiring not being visible unless its pulled. We warned him that if there was ever a fire at sea we would sue him and the insurance company... but no budge. He also didnt want to bring the mast down for inspection of the internal wiring despite it taking a direct hit.

So finally the newly appointed adjuster approved the work and things were ready to go. Or were they?

So far I had to pay to bring several surveyors to St Kitts, dockage, for a haul out, and more. Now the insurance company said that I had to pay for everything up front and then later they would reimburse me. Worse yet, they would not even say exactly what they would cover and what they would not saying they could only decide after the work had been done and a final claim submitted.

This went on for months. Finally with pressure from both the adjuster and my insurance agent they agreed to a settlement.

They asked us for our bank details and said they would wire the money within 30 days. I paid for most of the repairs by taking money from my house and waited for the payment to cover the rest. Still sucking up dock space in St Martin... and dodging hurricanes as we were now well into the season. We warned the insurance company repeatedly that the boat was still not safe to sail and there was no room on the hard in St Martin. If it took a hurricane hit, expect that I would sue them (by now my insurance was up and we changed insurance companies for obvious reasons).

29 days later, a check arrived in my mailbox in St Kitts. A USD check drawn from a UK company, to a BVI company that only has bank accounts in Europe. WTF am I supposed to do with this check??????

We contacted the insurance company again "Oh we had trouble with the wire, so we sent you a check". ???????

The company that owns our boat receives dozens of wires a month, from all over the world. No one has ever had trouble before.

We asked for bank contacts, they would not give them. They said no client ever had trouble cashing checks before - are all their clients Amerians? Wonder what they would do if I tried to pay my premiums with a Scotia Bank check written in EC dollars.

Now all the sudden they had "email problems" and couldn't get or send emails and we had to repeatedly call them in London.

Finally after a lot of mess, and many calls from our bank they somehow magically wired the money.

Its now January 2012 and I'm finally getting my boat back from Aug 2010.

[PyotrBee]

Two small follow ups - the work done by Atlantis was fantastic - I posted another thread about this...

Wiring - there WERE some spots where damage could be seen. Several inline fuses near the engine compartments had been blown completely out... not just burned the fuse out, but ejected them from the holder through the protective caps and left black marks on the fibreglass.....

[xymotic]

name names man! Not really applicable where you are, but one of the main reasons I use Boat US is that they actually pay. Cheap insurance that never pays a claim is not worth it IMO

[Lagoon4us]

Originally Posted by xymotic

name names man! Not really applicable where you are, but one of the main reasons I use Boat US is that they actually pay. Cheap insurance that never pays a claim is not worth it IMO

Agree name who they were!!!

[PyotrBee]

Our agent was actually helpful when we engaged them. They were Offshore Risk in BVI and Florida - highly recommended.

The surveyor who was a problem has left the company and I've since found out used to work in St Martin and made a lot of enemies there. He's long gone to another continent now so it doesn't make sense to name him despite him being a major PITA. If you're in NZ though, be cautious.

The insurance company from hell was Osprey Ltd in the UK. Cheap wasn't the reason I went with them, although they did have a competitive price. The former owners of my boat used them. They had some small claims and said they were responsive for those. So I went with them based on their experience (former owners have been great and in fact live within a mile of me) and the insurance rating of A.

I'm now with Nagico. They are B+, but they are local. Ive talked to other boaters who have Nagico and the feedback has been good and I get repeated comments about them being local and understanding the Caribbean much better. I've also been able to go with my local insurance agent now that handles my car, business, health, etc.. He's excellent as well so I should be good now... Note that while I switched agents, I still highly recommend Offshore as an agent... I only switched agents because my local agent for all my other insurance is a local Nagico office and so it made everything local for me including the agent....

[gonesail]

insurance is a scam

[osirissail]

If this is the outfit - "Osprey Special Risks Ltd, global marine insurance underwriting agents" - they are "brokers or agents" - they may not be the actual underwriter or insurance company. If the underlying insurance company they used was less than solid (e.g. Edward Williams, TL Dallas) you can expect such problems.

Osprey even has a special website: OspreySucks.com
Interesting read . . . .

[PyotrBee]

Yes thats them....

" if you read the policy, there is major depreciation built into it, and they will refuse to cover many things"

Sounds familiar.. in the end we got them to pretty much cover just about everything they had too... In addition to the depreciation - the only area I couldnt get full coverage (but did get some) was payment for the very long dockage required due to their dragging of feet.

[osirissail]

A "Depreciated Value" insurance policy is the standard home-owners insurance policy and most likely the same for small vessels. Thirty, some odd years ago I had my house burn down and the insurance only paid a fraction of the cost of rebuilding as everything was "depreciated value." After the fire, my insurance agent advised me that they had a new policy available called "Replacement Value" which paid for "new" to replace the "old" and of course, the premiums were significantly higher.

So I purchased on one for a new "old home" when I moved to St Louis. When it was destroyed by a flood they paid what was necessary to go down to the stores and buy new stuff to replace my old destroyed stuff.

However, the marine insurance market hasn't really bought into the "Replacement Cost" type coverage but did bring out "Agreed Value" policy wherein they cover the vessel up to the policy limit for repair and replacement. And naturally, at a higher premium than the standard type policy.

With over 800 private cruising vessels lost in Grenada due to Hurricane Ivan, we all got a quick education in the value of the different types of coverage and even in the issue of prompt or severely deferred (what the OP experienced) handing of claims. One insurance company with about 200+ boats lost in Ivan flatly slammed their doors and disappeared (went out of business) and those cruisers got nothing. One close friend had to dip into his retirement account to cover the $80K cost of fixing his nearly-new Hunter.

So the assumption that all insurance companies (and their agents/brokers) are "equal" has been definitely proven to be wrong. These days it pays to investigate the broker/agent - and - the underlying insurance company to find out their past performance. Which, IMHO is the main benefit of threads like this (if they stay on topic).

[AnchorageGuy]

If your "agent" is Offshore Risk Management with offices in the Florida Keys, we and others have had problems with them in the past and getting you set up with this kind of insurance company that you might otherwise not use is one of those problems. Although they might seem to be helpful, we found them to have created lots of the problems we had. Chuck

[mrohr]

I like self insurance......If I can't take the loss,then my boat is too expensive.

Money saved on premiums goes into rainy day account or more better safety equipment and has made me a better seaman.

Yes, I've been lucky,but I've also taken some hits....so far I'm way ahead.

I'm thinking that insurance companies are generally quite profitable even with their vast overhead,so without that overhead and competent ownership could I not profit also by pocketing the premiums?

I'm betting that insurance considerations will not be paramount in my mind as my boat sinks beneath the waves and I'm left clinging to my overturned dingy.

Do the math and keep your fingers crossed.

[PyotrBee]

The replacement vs actual value you are right on most policies in case of loss....

But this was repair, which is different and unfortunately there was depreciation on those items as well

[osirissail]

Originally Posted by mrohr

I like self insurance......If I can't take the loss,then my boat is too expensive. . . .

Unfortunately, unless your boat is trailerable or tied up to your own dock or property (or an unwitting neighbor's) you will find these days you cannot, except in increasing disappearing circumstances, dock it at a marina or haul it at a boatyard - and in some places even take a mooring - unless you have an insurance company document that says you and the boat are insured. Gotcha coming and going . . .

If your boat is small enough and/or trailerable then it gets wrapped into your home-owners and/or automobile insurance coverage - so your boat is insured even though you don't have a "stand-alone" policy on it.

However if you are based and operate outside major 1st world countries then insurance is the exception rather than the rule for the locals and ex-pats.