Don’t Be Denied

Boat owners can do a lot to ensure their claims are paid in their time of need.

shutterstock_325206758 copy  Insurance companies want to do right by their policyholders, but some of the onus for claims denials falls at the feet of the insured. Boat owners have to do their part to ensure their policy is utilized to the fullest. Sometimes, an extra few minutes of attention can mean the difference between a disaster that gets remedied and one that gets exacerbated.

We reached out to a few marine insurance carriers and asked them for some of the reasons a claim might end up on the denied list — and for how policyholders can avoid such a fate. They were kind enough to contribute to a delicate subject and give boat owners a leg up in prepping for the worst.

Neglect
A boat is often the second biggest purchase most people make, but that doesn’t mean it receives all of the care it should. Overlooking the small but important things can lead to unintended consequences.

The Insured lived in a climate where freezing temperatures were the norm. This particular year, he failed to drain the water from his engine, and we all know water expands when it freezes. Well, the winter freeze resulted in a cracked engine block. Since the Insured didn’t winterize his engine properly, the damage wasn’t covered. Most watercraft policies will not cover these types of preventable damages. Properly winterizing one’s boat is a must. Some insurance companies will pay for this kind of damage if the boat is stored in a region where winterization is not the common practice because of mild winter temperatures. — PROGRESSIVE

The Insured was driving along in his boat when his engine suddenly failed. The adjuster, after examining the engine and speaking to the Insured, found that he had not changed the oil in over 10 seasons, which led to a lack of lubrication in the engine, which seized the motor. Lack of reasonable care and due diligence in the maintenance of a boat is a cause of loss that is not covered in most policies, so do the little (and big) things a boat requires: maintain your boat and document all services. — SEA INSURE

Five consecutive days of rain filled the Insured’s boat while it was sitting on its trailer. On the sixth day, the boat came crashing down on its stern when the weight of the water caused the boat fall backward. That will typically not be covered by insurance, because it was not a sudden occurrence (i.e., the water in the boat accumulated over a period of time). In another case, a family of raccoons decided to feast on a boat’s upholstery and wiring. The Insured didn’t have a fitted cover on his boat, so his claim was denied. Something as simple as having a fitted cover on your boat when it’s not in use for a few weeks can make a huge difference. — PROGRESSIVE

Dearth of Documentation
Insurance agents are pretty good at anticipating people’s needs, but they can’t read minds, so it’s up to policyholders to update their agent about new equipment and any thefts.

The Insured was missing a fishing rod that he had been storing in a rod holder in his boat. He filed a claim for the theft of his fishing rod. Unfortunately, without physical evidence that the equipment was stolen and with no police report to verify the Insured’s statement, the claim could not be paid out. Loose equipment should be stored in a locked storage locker aboard the boat or taken off the boat to be stored somewhere secure. And if, despite your best efforts to secure all of the property on your boat, something is ever stolen, get the proper documentation. — SEA INSUREshutterstock_364732460 copy

The Insured had a new sound system and updated electronics installed in his boat for his birthday a few months ago. The boat and the equipment were damaged in a recent accident, but his new equipment wasn’t fully covered, because he hadn’t added it to his policy. He had 30 days to contact his agent to update his policy for the added equipment value. Make sure to contact your agent as soon as you make updates to your policy. — ALLSTATE

Policy Choices
Not properly reviewing the policy language — or assuming coverage is provided in some other way — may cause an insured to submit a claim that is clearly not covered per the policy.

The Insured’s small, low-horsepower boat sank in the shallow water at the dock. He assumed his homeowner’s policy would cover him, and it did — to an extent. While it covered his small boat, it didn’t cover things like wreckage removal and fuel spill liability, so he was exposed to some hefty expenses. Don’t assume homeowner’s coverage covers anything except your home. Find out. — PROGRESSIVE

The Insured’s boat sank while he was fishing in the middle of the lake. He lost his fishfinder, poles and tackle box. Insurance covered his boat but not his lost gear. This fisherman did not have the right coverage. He should have added Personal Effects coverage to his policy so his fishing gear or other sporting equipment was covered in the event of a loss. — ALLSTATE

Many Insureds assume they have many benefits that they don’t have. Benefits such as Disappearing Deductibles, Small Claim Forgiveness, and even Pet Coverage are examples of those small intangibles that can make a big difference. Check your policy contract or call your agent to see what you have. — PROGRESSIVE

Make no mistake, there are a lot of uninsured boats out there. If an Insured’s boat is struck by an uninsured watercraft, injuring him and his passengers, he might have no recourse unless he has his own boat insurance policy with Uninsured Boater coverage. With Uninsured Boater coverage, the Insured’s policy will pay for the injuries caused by the uninsured boater. — PROGRESSIVE

Mechanical breakdown refers to a part or mechanism on the boat that malfunctions or breaks down. Examples might include a bilge pump that fails or a thrown rod that causes internal engine damage. Often, these types of losses are not the fault of the owner, yet many insurance policies exclude damage that results from mechanical breakdown.

*Read your policy closely or call your agent to find out what type of coverage you have. This will help avoid some very unpleasant surprises in the case of a claim. — Sea Insure

Left Lacking
Sometimes, a claim-worthy event isn’t so much denied as “not applicable,” because the boater never had a policy or he allowed it to lapse during the off-season. Oops.

Over the winter, the marina where the Insured stored his boat caught fire and his boat was damaged. Normally, not an issue. This fisherman, however, had dropped his boat insurance over the winter months, not realizing he still needed coverage even when he isn’t on the water. Even if you store your boat, you should have insurance coverage year round. — ALLSTATEshutterstock_439431037 copy

Boater A owns a relatively inexpensive boat and made the decision to “self-insure,” figuring that if his boat sinks or is stolen he’ll be bummed but life will go on. What Boater A and many like him often don’t consider is the liability piece. What happens if they collide with another boat on the water and injure the people on that other boat (or their own passengers)? This puts the boater at tremendous financial risk, but for some reason they don’t even consider this! — PROGRESSIVE

Too Fast, Too Slow
There is such a thing as moving too fast and too slow when it comes to a claim. Don’t be too fast to effect a repair, and don’t be too slow to pick up the phone.

The Insured notified his insurance company after an incident caused damage worthy of a claim. But for some reason, he waited a significant amount of time, leading to issues with his claim. In some cases, not having the insurance adjuster take a look at the boat right after the claim occurred can make it harder and harder to determine the cause of the loss — and further loss to the vessel can occur. If the carrier cannot determine the true cause of loss, there is no way to find out if it was a covered claim, leaving the insured out of pocket. Be sure to notify the insurance company in a timely manner. — SEA INSURE

The insured had an engine claim and took the boat to his mechanic before notifying his carrier. The mechanic fixed the engine but didn’t hold on to any of the old components. Once the insured filed the claim and a surveyor was called to go take a look, there was nothing to determine the cause of the loss. Therefore, the insured was left out of pocket. Putting a claim through after seeking out a repair is not recommended. — SEA INSURE

Not doing the simple things — such as changing gear oil, bellows and through-hull fittings — can cause catastrophic damage to your boat or its mechanicals. In many cases like these, your insurance policy might not pay for repairs because you failed to properly maintain your boat.— Progressive

Going Off the Chart
Knowing how to read a chart is essential for safe on-the-water navigation, but do you know how to read the “chart” included with your policy?

The Insured took his boat down to Florida from New York to use on vacation. He hit a sandbar that damaged his lower unit while in Florida waters. The Insured’s navigation area is from Eastport, Maine, to Morehead City, N.C. Since he did not notify the carrier that he was going to be using the boat outside of his navigation area, the claim was denied. Make sure you know your navigation area, and update your carrier if you plan on boating outside that area. Coverage can often be amended to include trips outside the navigation area, on a case-by-case basis. — SEA INSURE

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