Check Those Insurance Policies

[barfwinkle]

A month or so back I mention a fire that had occurred at my marina, destroyed 4 boats and closing the exit from the marina until all was set right with the EPA, Insurance Adjusters, Coast Guard etc.

Well an 88 year old friend of mine lost his boat, burned to the waterline and then sank. He was insured by a local agent that was not very well versed in marine insurance and here is the scoop.

Obviously the boat was totalled and he was paid for whatever the appraisted value etc... However, shortly after that he received a bill for the insurance company for $18,000. Now the boat (IMHO) is not worth anywhere near that, but that is a difference story. Anywhow, his policy stated that the company would cover up to 5% of the appraised value of the vessel for recovery AND ENVIRONMENTAL CLEANUP!

We had salvage divers onsite form the better part of a week, we had skimmers deploying and recoverying the "booms" they use to contain oil/fuel spills. The divers couldnt raise any of the boats that burned and sank, so we had a tug with a full sized crane on a barge come in and pull the debris out of the cove. The divers pulled what pieces they could because the insurance adjusters/fire investigators wanted to know what started the fire (we know where it started).

Anyway previous experience tells me that to have a "land based" crane on site is $300 per hour, one hour minimum, including travel time to the site.. It took the tug w/crane two or three days to get to the site (I dont know what arrangements were made with the tug company). I have said all of that to say that my original guess of $1 million in damage, has been greatly exceeded. More in the range of $5 or more mill and we are a small marina.

Finally, Boat US policies cover 800K in both recovery and environmental clean up/damage. For the owners sake, one needs to know the limits of their policies. Just because your insured, doesnt mean you are covered.

End of rant!

Fair winds

[winthrop fisher]

hi....

a friend had his 32 foot boat in the ozarks in southern mo four years ago we had a foot of snow and later it we had an ice storm hit and his boat and around 12 others boats sank at the docks,

half of the owns did not get money back at all,

and the other half of the people got checks from there insurance for there loss...

so you are right, check your insurance to see what it covers....
winthrop

[Wayne Grenier]

You raise several issues-I have been an Insurance Adjuster for 25 years-here is the 5 minute course-some policies are "stated value" policies-meaing if your boat sinks, is destroyed by fire or otherwise not repairable-you are paid the "stated value" amount-however-this amount includes and is therefore reduced by the costs of salvage and/or pollution remediation. If your boat gets stuffed under the bridge or tossed up onto the marshes by a hurricane and cranes or a helicopter are needed to remove it-the policy only pays up to the stated amount-divers-pollution control-booms etc-are all included-but only up to the limit-so the idea is to carry more insurance than the actual replacement cost of the boat-
2nd-most polices here in the North East have haulout limitations-my policy is void if the boat is in the water between Nov1st and May 1st-
so if you are wintering at a dock and your boat sinks-or the boat next to catches on fire and your boat burns too-you will not be covered-
Your best bet is to go with a real marine insurer-and take the time to make sure you understand what you are covered for and what the limits are-
You also should carrying liability insurance on this policy-for ex-your boat catches on fire at the dock and destroys other boats-that have no insurance because they were supposed to be hauled for the winter-guess who they are going to go after for their damages plus their salvage and pollution costs? then its a question of whether or not you were liable or negligent-was your power cord old and frayed? where you using a torch or a heat gun? etc-I suppose I could go on and on but last week there was a posting from someone whose fuel tanks were old and leaking-suppose the fuel runs into the bilge and is pumped overboard by the bilge pump? guess what-we have a pollution/liability claim that your policy will have to respond to but only up to your limits-after that you own it-and pollution claims run into tens of thousands of dollars-suppose you put the local shellfish people out of business for several weeks during the height of their season? (lost income would be hard to prove on their part because I'd bet a lot of them are working off the books) but you can see how complicated it gets
another ex-my policy allows $500 for me to pull my boat if the costs are incurred within 48 hours of a hurricane watch or warning is issued for my area by the National Hurricane Service-we can call this the "get the boat the hell out of the water " clause-its nice to have-
also-all of the good stuff on the boat is depreciated-sails-cushions-batteries-etc-meaning I would assume they would be depreciated at about %10 per year down to almost nothing-

[Joe CD MS 300]

Wayne,

Thanks, for the tips. I think I'll review my policy as I haven't read it in a while. I believe it is a standard ACE / Yacht policy. It was originally through Hinkley Insurance Agency but is now part of Marsh.

Joe