This old boy’s opinion is not without prejudice and subject to twenty plus years of experience of handling marine claims for underwriters. having said that mouth full, let us cast off our lines for a voyage to higher insurance premiums.
The slack tide of fair and reasonable has been overcome by many factors of highs and lows. All insurance policies are basically legalized gambling. Both sides want good odds, so the risks remain equitable. The boat owner bets that the carrier is fair and reasonable and solvent, and the carrier bets that the risk is acceptable. How both sides come to their perspective conclusions is where the water becomes a bit murky, confused and sometimes downright dangerous.
In the world of boats we have many players: manufacturers, dealers, brokers, owners, sellers, insurers, lenders, repairers, and on the bottom of the pile, surveyors.
The manufacturers, dealers, brokers, and sellers have their story to tell so the buyers, lenders, and insurers can do their business of exchanging goods for services. In a perfect world the buyer knows what he or she is buying, the lender knows the fair market value and the insurer knows what’s being insured. In the real world it often does not work that way for many reasons. Sometimes the buyer doesn’t want to know what he or she is buying which is the most scary scenario from my corner. He or she just wants to buy it. Often when the realization of ownership hits the blades of reality, that is when the finger pointing begins, and the stuff spreads through the ranks of the players. A claim gets filed, a surveyor appointed, different opinions are expressed, and the billable hours of attorneys peak out.
First scenario: I bought it. It broke. What do I do? File a claim.
Fact#1: Buyer didn’t know what he or she was buying, just wanted to buy.
Fact#2: It’s not my fault. I have an insurance policy. They can pay for it, that is what insurance is for.
Fact#3: Insurance policies are not an extended warranty, they cover certain items, often not wear and tear, latent defects, loss of use, lack of maintenance, deterioration, galvanic action, blistering, marine life, your failure to maintain your vessel in good repair and condition, etc, etc.. Most boat owners never read their policies and often get a shock when something goes wrong.
Fact#4: You need to know what you buy, and its true condition and value. Other policy holders should not pay for some owners limited vision and maintenance neglect.
Second scenario: I’ve got a loss, and it’s covered and now I have to pay an agreed deductible, and it’s mucho bucks. Is there some way we can cover my deductible? Let’s steal the money from other policy holders, so I won’t have to pay my share. I like the admonition, if you don’t work, you don’t eat. This thing called insurance only works if we all pay into the pot, and only extract our fair share. If too many people take from the pot, the pot has to get refilled. We all put into the pot. Take your fair share – no more – no less.
Third scenario: You hired a surveyor who works to expedite business for others, not you. You blew it. You didn’t do your homework. You trusted the untrustworthy. Buyer beware.
Fourth scenario: You have a legitimate claim. It’s a covered loss. Your underwriter employs a claims hacker, and you get chopped up in the process. Don’t worry, most policies have an arbitration clause and those claims hackers don’t last long. The hand that feeds them will eventually withhold their food or go bust due to poor claims handling and legal pressure. If a policy holder is foolish enough to persuade the repair facility to help them gouge the underwriter, then things really get interesting.
So whats the answer? Simple. Fair and reasonable. Both insured and carriers honoring their agreements and not taking advantage of each other, just fair and reasonable. So what’s the problem and how come my premiums keep going up? Simple. Folks have lost their ability to be fair and reasonable. How do we turn it around. Simple. Fair and reasonable. If your boat gets damaged, get it repaired. Don’t expect to get it jacked up and transfigured. Reasonable expectations lead to solvable solutions and remember, the Lord loves sailors. May 2001 bring you fair winds and calm seas.