Here is some advice on what to do if you have a loss or suspected loss of your vessel, and want to place a claim against your marine insurance policy. First and foremost, read your policy when it is initiated and understand what is and what is not covered.
Notify your agent or underwriter now, not later. Describe the incident when, where and how. It’s always good to sit down and put it in writing while it’s fresh in your mind. This is especially important if another vessel was involved and you have sustained collision damages. Make a simple sketch with wind direction, tidal flow, vessel’s relative position pre and post incident. This will help all parties involved acquire a clearer picture as to what transpired. If another vessel was involved, get the operators name, address and his or her insurance company’s name. Make no statement of liability. If the damage is over $500 or a fatality has occurred, notify the U.S.C.G. and the State Department of Natural Resources. If there were witnesses, solicit a statement from them now, while it’s fresh in their minds and you can find them.
If your regular service facility or repairer advises you that you may have a claim. Notify your carrier now and not after your boat is repaired. Insurance Companies have the right to investigate the cause and origin, and if repairs are completed, the evidence is gone and your claim may very well be in peril.
Always approach these situations as if you were not insured. All too often boat owners take the attitude that this is not their problem, it’s the insurance companies problem. You are the owner of your vessel and it is your responsibility to care, maintain, and protect your property. If your vessel was sunk, contact your agent or underwriter for instructions. It’s better to settle the salvage price now and not later when things may get amplified. The salvage claims made these days are outrageous for the most part and have played a key role in escalating the cost of recreational boating and increasing premiums.
The cost of salvage is usually separate from the vessel’s policy value, as is any steps taken to preserve equipment such as engines. This is called Sue and Labor and is usually separate from the policy. If your motors have been submerged, hire a reputable mechanic to drain, flush and preserve this valuable equipment. I have seen engines that have been submerged run for years if attended to quickly. A series of short oil and filter changes and running the engines can in most cases prevent any serious internal damages. Even if your carrier totals your vessel, operational machinery will increase the salvage value and reduce the claim. Also, if there happens to be a coverage issue under the terms of your policy this one step could save you thousands of dollars. We all pay into the insurance pool, and if we all work together, maybe our grandchildren will be able to afford insurance.
Your underwriter will assign a surveyor or adjuster to your claim. Their purpose is to report on the cause, origin, equipment affected, and approximate cost of the loss to the underwriter. Your insurance company will then reserve monies to cover your loss. You, as the boat owner are responsible for procuring a “reasonable” estimate from your chosen repairer. Here is where there could be a hazard to navigation in the claim’s process. If your repairer tells you he can write his estimate to cover your deductible to make the deal attractive to you, run, don’t walk from this individual. If there are maintenance issues that need to be addressed on your vessel, and your repairer suggests that this be incorporated into your estimate to repair your vessel, refuse this offer. These types of insurance fraud is unfortunately all too common. A claim can go as smooth as you want it to, but playing with deductibles and added non-loss related items may give you a bumpy ride. The people that access your claim have a good handle on how much it should cost to make your vessel whole.
Keep the channels of communication open between the repairer and your surveyor or adjuster. Remember that you have one boat that you are dealing with, your boat; Your surveyor may have many losses that he or she is dealing with at one time, and your repairer is in the business of repairing many boats at one time, not just yours. Be pro-active in the repair process. This is your boat. If you have concerns or questions, address them to your surveyor or adjuster. If additional items are discovered damaged during repairs, notify the surveyor or adjuster so they can document them for the benefit of all parties.
Your surveyor, adjuster or underwriter are not in the quality control business. Your surveyor, adjuster or underwriter does not supervise repairs nor do they specify particular repair procedures. Your repairer is responsible for making adequate and proper repairs for the type of damages sustained. Make frequent visits to your vessel during repairs to insure that the repair work is satisfactory and done to acceptable marine standards. If your vessel has sustained serious damages requiring substantial re-construction and gear replacement, it is a very good idea to carefully document the re-construction as this disclosure will be necessary if and when you sell the vessel to prevent future liability. Before you accept your vessel from the repairer, perform a stringent sea trial testing all equipment affected to insure that it is performing as designed.
If we all work together and be reasonable, a marine claim will be only a small bump in the road of life, and remember, the Lord loves sailors.
Capt. Neil K. Haynes NAMS/CMS; SAMS/AMS October 10, 2002