Consequential Loss Insurace Coverage

[Brian B]

Below is a link to an article relating to the author's boat that had sunk at the dock due to a leaking bolt that had worn out. (The author is an insurance agent no less.) His insurance company denied the claim as the policy did not cover "Consequential Loss". Its an interesting read that states 90%
of boats that sink at the dock are not covered by insurance companies. Worth checking your policy for this type of coverage. I'm getting a clarification on my policy right now.

http://www.risaa.org/newsletter/0717/0717_04.pdf

[captstu]

Not being a lawyer or an insurance, can you tell us what companies do and don't cover the loss.?

Only luck kept my boat floating when a hose clamp parted on my shaft log. Even after it broke and I got the leak under control, I could not see to inspect the others. On my way to the boat from West with four new hose clamps.


Stuart Bell
Ranger 25: Shearwater
(561) 352-1796

[daveo]

I just got a policy with Boat US. Called them about adding consequential loss. They do not have such coverage, I explained what it covers and got the insurance run around that adjusters would look at a claim and decide coverage applied.

[Connerkip]

I too have boatUS. I called them, and they read me the section covering consequential damages. Sure sounded like I had coverage for consequential damage.

[scross]

Brian B,
Thanks for the heads up on this! Missed your original post last year.
Just sent an email to our insurance agent asking about consequential loss coverage. Couldn’t find a reference to it in our current policy.
That loss was another reminder to me on why it’s important to close the seacock when not planning to run the engine for awhile!

[Hydraulicjump]

The disaster on the Cutwater made us all go out and check our insurance, I hope. Hard to imagine, given the relatively low cost of insurance, that one would ever choose to self insure.

We use Global Marine Insurance Agency in Seattle and they have written a Geico policy for us. Here is the critical language in the Hull Physical Damage Exclusions:

"Any losses caused directly or indirectly from wear and tear, gradual deterioration,
mechanical or electrical breakdown, overheating, electrolysis, galvanic action, rot, mold or
mildew, corrosion, weathering, marring, scratching, denting, vermin, animals or marine life;
however, we will cover immediate consequential property, damage resulting from any fire,
explosion, sinking, demisting, collision or stranding."

I called and they patiently explained that yes, if our boat sinks in the dock and it is caused by, say, a corroded seacock, they will not cover the seacock replacement but they will cover the damage caused by sinking. For example, I had a trim tab corrode and fall off. They won't cover that and that's on me. But if it somehow caused major damage to the boat, they cover that. However, they said that in cases of extreme neglect of the boat (meaning letting it rot at the dock), they may dispute coverage.

So yes, good to check and make sure that you have consequential property coverage. And by the way, the folks at Global Marine were very patient with me, which I appreciate. The folks at Ranger Tugs directed me toward them and I appreciate it.

Although I am still a bit mystified why "demisting" would lead to damage on a boat....

Jeff

[Wee Venture]

Was that a sly joke? Must be “demasting.”

[bigdealsam]

As a 32 year "policy peddler" for one of the major carriers (recently retired) I offer the following absolute truth about insurance policies - "The large print giveth and the small print taketh away"

Ask all questions in writing and keep a file, electronic or paper, of all responses. Trust me, someday you will need to access that file.

[bill j]

I too have boat insurance through BoatUS. I called and they do cover Consequential Losses. Bill

[Wee Venture]

Just a word of caution about calling to verify coverage. I would definitely want to see it in the official contract. I have been verbally assured of things more than once by insurance representatives on the phone and at boat shows about specifics of coverage that turned out to be inaccurate. I’m not saying they intentionally misrepresented. They may have meant well and thought they knew but were uninformed. When it comes to making a claim, all that really matters is what is in the contract. (And I would say the second most important thing is the company’s reputation for customer service and specifically claims servicing.)