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Boat & Watercraft Insurance: Managing Your Claim, Sunk Boats, Vessel Damage, and How to Save Money


Boat insurance

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 sustained collision damage. Make a simple sketch with wind direction, tidal flow, and vessel’s relative position pre and post-incident. This will help all parties involved acquire a clearer picture of what transpired.


If another vessel was involved, get the operator's name, address, and insurance

Boat 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 you have equipment affected, don’t dispose of it before your insurance company’s representative has the opportunity to inspect it. How do they know if the disposed item was related to your claim or just a boat part that needed replacing? If the part is thrown away, no one can examine it to determine why it failed.

If your regular service facility or repairer advises 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 company's problem. You are the owner of your vessel, and it is your responsibility to care for, maintain, and protect your property. If your boat 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 salvage cost is usually separate from the vessel’s policy value, as are any steps 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 serious internal damage. 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.

Boat 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. As the boat owner, you are responsible for procuring a “reasonable” estimate from your chosen repairer. Here is where there could be a hazard to navigation in the claim 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 maintenance issues need to be addressed on your vessel, and your repairer suggests incorporating this into your estimate to repair your vessel, refuse this offer. These types of insurance fraud are, unfortunately, all too common.


A claim can go as smoothly as you want, but playing with deductibles and added non-loss-related items may give you a bumpy ride. The people who access your claim know 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 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 proactive in the repair process. This is your boat.


If you have concerns or questions, address them with your surveyor or adjuster. If

Boat insurance

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 is 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 ensure the repair work is satisfactory and meets acceptable marine standards.


Suppose your vessel has sustained severe damages requiring substantial reconstruction and gear replacement. In that case, it is a very good idea to document the reconstruction carefully. This disclosure will be necessary to prevent future liability if and when you sell the vessel. Before you accept your vessel from the repairer, perform a stringent sea trial testing of all equipment affected to ensure it performs as designed.


If we all work together and be reasonable, a marine claim will be only a tiny bump in the road of life, and remember, the Lord loves sailors.


© Capt. Neil K. Haynes NAMS/CMS; SAMS/AMS (Originally published October 10, 2002)

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