Mechanical Insurance Claims

As a marine surveyor assisting insurance companies with claims our primary duties are to determine cause of loss, scope of damage and review repair costs. The type of boat claims most surveyors receive are varied, from submersion damage to lightning strikes to mechanical failures.  No one is an expert in all experts, we all cannot be electrical and mechanical engineers, metallurgists, experts in rules of the road, lamination experts or coatings experts.  We simply need be proficient and know our limits.

The types of engines and drive systems that experience failures are varied and a good example of modern marine surveying. Further, different insurance carriers require different levels of cause or determination.  Some carriers merely need to know if the cause was mechanical (from within the engine) or external, plastic bag, submerged object, bad fuel etc…).
A recent claim for a failed diesel engine began with the discovery of plastic components in a sea strainer.  A tear down of the engine revealed a single cylinder failure, not caused by the plastic.  Interestingly the insured thought the claim may not be covered if it wasn’t caused by the plastic but this mechanical failure was not excluded by the policy. Some insurance companies require much more specific cause or determination. This can be to allow proper cover decisions or to preserve subrogation rights. In another recent claim an inboard diesel engine had been rebuilt and had been rebuilt approximately one month prior to the loss. The warranty was for six months. Our inspection resulted in the determination of a mechanical failure from a component within the engine, however this carrier required a more specific determination.  Again, the mechanical nature of the failure was a key factor.

There is no shame in not being able to more specific in a cause or determination such as this. In this case a forensic engineer was hired to attempt find “the smoking gun”.  In modern insurance claims it is important to remember the basics, develop the history, any recent repairs and the precise event details from the operator.  Be sure to separate opinions developed after the loss from consultations with varies from the facts of the actual events.  Be aware that our failure analysis skills often evolve past those of the trained mechanic, as their job is not the same as ours.  A skilled and ethical mechanic is one of our best tools cross checking opinions with other mechanics is also an option. With modern machines don’t forget the computers. Recording error messages and understanding their significance can be vital.  In a recent failure claim we were provided “compression readings” as proof of the condition of an engine prior to loss.  Further analysis revealed that these “compression” test results were a computer analysis versus an actual pressure gauge inserted in the injector tube.  So obtain the error codes but also understand their significance.

Managing a Claim

Managing a Claim

This is a follow up to our newsletter article entitled “When to file a boat insurance claim”. In the previous article we discussed various types of coverage on boat insurance policies to raise awareness of benefits provided by a boat insurance policy. The article was a real thrill ride; you can read it on our web site –

Once an insurance claim is filed you have certain responsibilities and rights. Filing a boat insurance claim is rare and many of the insureds and claimants, with whom we deal, have had no prior experience with a boat claim and very limited experience with any insurance claim. Once you fulfill your obligations you deserve a relatively smooth and timely process to the completion of the claim.

To file a claim simply contact your agent or insurance company. Your agent may be an independent agent or an employee of the insurance company. Either way contacting them will begin the process and they will request information, your job is to provide the information in a timely manner.

In California and many states, the handling of a marine insurance claim is governed by the Fair Claims Settlement Practices Regulations or Fair Claims Act, designed to protect consumers. As long as the policy is written by an admitted California insurance carrier (versus a non admitted or surplus lines carrier), the policy holder is covered by this law. The law assures the policy holder a fair assessment, fair settlement offer and a well defined time line. Basically the Fair Claims Act requires the insurance company to investigate and decide coverage within thirty days of the date the claim was filed. If the claim is covered it requires the insurance company to pay the claim in full, based on the contract of insurance, preventing insurance companies from making low ball offers for settlement. It requires the insurance carrier to either deny the claim or provide the insured with a reservation of rights (ROR) letter. The ROR letter must detail the reasons for a possible denial, and must be sent as soon as the adjuster becomes aware that the claim may be denied, if the investigation is not completed to the point where they can issue a denial letter. The denial letter must be in writing and reference the specific policy language which is the basis for the denial.

The Fair Claims Act also provides an easy option for an insured who feels they have been treated unfairly. The insured can file a complaint with the state’s department of insurance and the claim will be reviewed at no cost to the insured. A complaint is a thorn in the adjuster’s side, and most adjusters prefer to avoid the process.

So, what are your obligations after filing a claim? In general it is the insured’s responsibility to “prove their claim”. To begin the claim process, contact your insurance agent or the claims contact number on the policy and provide the information requested. From the beginning, document your activities including date of initial and subsequent phone calls and name of contact. Obtain a claim number, telephone number and e-mail address for your adjuster. We recommend an immediate follow up to the initial call via an e-mail to the adjuster and/or agent. The fair claims clock begins ticking with the first contact with the agent or claims department.
With no extenuating circumstances the insurance company has thirty days from the date you filed the claim to determine coverage.

Expect to be asked a series of questions regarding the history of the vessel, maintenance relevant to the loss, event details and a description of the damage.

It is your obligation to provide honest and factual answers. It is not your obligation to be a boat repair professional, mechanic, electrician or forensic engineer. You do not need to know exactly why your engine failed, what object you ran over or how the fire started. You simply need to provide answers to questions to the best of your ability. You may be asked to write a “master’s statement”; if so, just provide the basic facts, in writing, expediently.

Immediately after any accident, act as a prudent uninsured. In other words, take immediate actions which you would take if you did not have insurance, mitigate (minimize) the damage as possible. Most insurance policies require the boat owner to mitigate the damage and the cost of mitigating actions are usually compensable, sometimes even if the claim itself is denied. Either way it is your boat and prudent actions will save your time and money. The classic example of mitigating damage is when an engine suffers water damage internally or externally. There are clear and well known mechanical procedures to mitigate this damage and they should be initiated immediately as time is of the essence in this type of loss.

The determining factor in coverage is the cause of loss. As discussed in the prior newsletter article the various sections of your policy provide coverage for a multitude of events while also excluding a multitude of events. It is the cause of the damage which is the crucial factor in determination of coverage. Sudden, accidental and fortuitous events are generally covered. Wear, tear and gradual deterioration are generally not covered.

You, as the insured, should expect an explanation of the process including the steps the adjuster requires to determine the cause of loss. This may include an inspection by an independent marine surveyor or specialist in the type of damage to your boat. It may require discovery, or some type of destructive inspection process or disassembly. This cost is often covered by the insurance company; we suggest prior written communication to establish who is responsible for any charges in the “discovery” process. This prevents surprises.

In order to facilitate the payment of a covered loss, you will need to choose a repair facility and obtain an estimate for the repair. We recommend choosing an established, reliable repairer. Their timely preparation of an estimate is crucial in the claim process and their timely and professional completion of the repairs is critical to the continuation of your boating enjoyment. Choose a repairer known for staying within budget; overruns lead to headaches and can usually be avoided.

Once you have received an estimate, forward it quickly to your claims adjuster. They can’t pay a claim unless they know how much to pay. Review the estimate for completeness and make sure all damage is addressed. At this point we suggest an e-mail to the adjuster to confirm they have received all documents required to handle the claim. They may have still need maintenance records, sales receipts, a master’s statement or statements from witnesses. Make sure you have complied with all their requests. This will prevent further delays, which may be caused by loose ends.

At this point it is the insurance adjuster’s responsibility to process your claim expeditiously. Though it is sometimes omitted, we prefer the adjusters provide an explanation of the claims payment. A synopsis of the basis of the payment including approved estimate repair amounts and applicable deductible and depreciation is crucial in to the proper explanation of the claim settlement. On first party (your insurance) property damage claims you will have a deductible and there may be depreciation applied (read your policy). Depreciation is a reduction in the payout based on the age and/or condition of the damaged components. An older engine or sail which need replacement may not be paid for completely. Some policies and some components are not depreciated and thus are paid for on a “new for old” basis. If you are pursuing a liability claim (another party’s insurance), you will not have a deductible, but depreciation will almost always apply.

Once you have received payment it is your choice as to how to have the repairs completed. Depending on the severity of the damage and the extent of repair necessary, you may have numerous options. In case of severe damage, which limits the continued insurability of the vessel, you may be required to complete all of the necessary repairs. This may be required by either the insurance company or by a lender. Any lien holder named on the insurance policy will often be named on the settlement check.


Claims involving large amounts of money are heavily scrutinized by claims departments. They will look carefully at all aspects of the claim and they will review your insurance application. It is imperative that your application is filled out completely, honestly and accurately. Any false information or omission on an application can lead to a policy rescission (cancellation). If the policy is rescinded, you get back your insurance premium, but no claim payment. Don’t embellish your experience or omit a prior claim on the application.

If you have an idea that an event may be a covered insurance claim, contact your agent immediately. The agent may advise you to hold off on the filing of the claim (with the carrier) until some further determination is made, but you will prevent future coverage issues by quickly contacting the agent. Do not initiate repairs and alter or discard the crucial components prior to allowing the insurance company an opportunity to inspect the damage, as this will create problems. It is only fair that the insurance company be allowed the opportunity to inspect critical components. They may have coverage issues or subrogation (an ability to recover their loss) potential that can’t be addressed or pursued without an inspection. Thus the contract of insurance provides them rights as well. It is unfortunate when an otherwise covered loss is claimed after repairs are completed but the claim is denied because the insurance company’s rights have been compromised.

There are insurance companies that write directly, usually communicating via telephone from a central national location. There are insurance companies that write through agents, who are often located in your home city. While there are examples of both good and not so good insurance companies writing directly or through agents, a local, knowledgeable and helpful agent is invaluable during the claim’s process. This type of policy may be more expensive, but during the claim’s process the premium is well earned.

All claims are not covered and that is the nature of the business. However, since a few ship owners developed this concept of insurance at a coffee shop in London, marine insurance claim payments have helped a myriad of boat owners manage their risks associated with vessel ownership and reduce the stress arising from boat accidents.

Christian & Company Marine Surveyors got their start in marine damage claims and continues to be active in this process. We represent insurance carriers, boat owners, repair facilities and various interested parties in the process.

Please keep Christian & Company in mind if we can be of assistance and help in the process of recovery from any accident or damage to your vessel.


This article was edited on February 29, 2016.

When to File a Boat Insurance Claim

When to File a Boat Insurance Claim

While brain-storming with our assistant, Ms. Anna Rosvall, on subject matter for a newsletter, she suggested this subject. As we have been assisting with marine insurance claims for over two decades, she thought we could write something that would be informative, helpful and interesting. Well, two out of three is not bad.

Along with every insurance policy issued is a declarations page. The declarations page identifies the insured, the vessel, the inception date (most policies are annual), the policy number and the various details of coverage and policy limits. The policy which follows the declarations details the various coverage provided and is very useful if battling insomnia. Compared to an insurance policy this article is a “thriller.”

Review of a declarations page from a major player in the boat insurance market revealed nine separate coverage areas. They include: property, liability, pollution, medical, tender, personal effects/sport equipment, towing, uninsured boaters and longshoremen/harbor workers. Most policies will not include all of these options and a review of your policy may reveal an unexpected exposure. An understanding of the coverage will allow you to utilize your policy better.

The appropriate time to file an insurance policy varies depending on the policy, coverage and the event details. Some decisions are easy: IF – your boat burns, sinks or is involved in an accident, THEN – you file a claim. If a guest falls and is seriously injured; file a claim. But, what if your engine fails?

The most often used portion of boat insurance policies is the property damage coverage. It provides coverage for damage to the boat itself. The property damage portion of the policy includes a deductible. Deductibles vary and are often a percentage of the boat’s value and are the amount the insured will pay toward any covered loss, prior to the insurance company’s contribution. If the property damage loss is less than or equal to the deductible, there is no benefit to filing a claim. If in doubt get a repair estimate prior to filing a claim.

Damage to a boat’s engine is addressed under the property damage section of the policy. It is an area of coverage that is often misunderstood. Most recreational vessel insurance policies are “all risk”, versus “named peril” as is the case for many commercial policies. An “all risk” policy provides coverage for virtually any cause of loss, except those causes which are specifically excluded. Thus, many insurance claims on engine failures are covered. While there are policies which exclude mechanical break down, filing a claim for an expensive engine repair is generally worth the potential, limited downside. We are continually amazed at what is covered with respect to engine claims.

For a most interesting conversation ask your dock buddies if the damage to your boat or engine is covered by insurance. This subject is second only to corrosion for the prevalence of misinformation.

Another benefit of a boat insurance policy is the ability to shift responsibility for primary payment and recovery if your boat is damaged by a third party. A classic example is when a vessel is damaged in transit on a truck or a ship. While the shipping company may be liable for the damage, pursuing and obtaining payment is often difficult. By filing a claim with your own insurance carrier, they will assume the responsibility for payment of the repair invoice and recovery from the responsible party (called subrogation in the industry).

Another area with surprising benefits is undiscovered or latent defects in the vessel. A latent defect is: a flaw or other imperfection in any article which is discovered after delivery; usually, latent defects are inherent weaknesses which normally are not detected by examination or routine tests, but which are present at time of manufacture and are aggravated by use. (McGraw-Hill Science & Technology Dictionary)

While some policies will exclude latent defects and the damage resulting from the defects, others will provide coverage for resulting damage, which is often the most significant cost of the repair.

As a general rule of thumb the property damage portion of the policy covers sudden, accidental and fortuitous events and excludes normal wear and tear.

The liability coverage on your policy protects you from exposure from claims filed by others arising out of the ownership, operation and maintenance of your vessel. Basically this coverage requires negligence on your part and financial damages arising from personal injury or properly damage to an uninsured party, but may also cover such things as loss of income or loss of use suffered by a third party. This is the coverage in the policy which will pay for your legal expenses for defense and any judgment, up to the limit of your policy. We strongly encourage you to exercise this benefit rather than face any potential law suit personally. It reduces stress and in the unfortunate, but far too common event of a law suit, it is why you paid your premium.

The medical coverage or “med pay” portion of your policy does not require negligence on your part. It provides payment for cost for medical care arising from almost any injury aboard your vessel. Virtually all policies cover your guests though some exclude the owners specifically and most exclude paid professionals. It has been our experience that adjusters are very liberal in disbursing funds from the “med pay” portion of the policy, as it is an easy way to prevent personal injury lawsuits. In most cases it should be offered up with no hesitation, though the limit is low it establishes “good will” quickly.

Paid professionals are generally expected to carry their own insurance and are often covered under the Jones Act, a marine equivalent to worker’s compensation. If you wish to cover professionals on your vessel you may purchase longshoremen and harbor workers coverage, referred to as LS &

Pollution is an ever growing area of coverage on boat insurance policies. While some policies may exclude the cost to clean up the pollution and the fines related to it, others will provide specific coverage, separate from the liability protections. Not only is it a good idea to keep oil in the engine, discharged oil is bad for the environment and your bank account.

The property damage portion of your boat insurance policy generally covers property that is normally aboard the vessel and used for the operation and maintenance of the vessel exclusively. It does not cover personal effects such as jewelry, laptops and sporting equipment. While this type of property may be adequately covered by your homeowners insurance, it is wise to discuss any components of value which are brought aboard the vessel with your agent. High value art work aboard mega yachts is often covered by specific riders for that piece of art.

Small boats, including trailer boats and tenders, often have separate coverage and thus opportunities for claims, which are different from larger yachts. Outboard engines are often covered separately, with their own deductible. Trailers are almost always covered separately, though a skilled negotiator may persuade the adjuster to buy the trailer along with the “totaled boat”. Every spring we see several claims resulting from small boats filling from winter rain water. Many of these are covered losses. A tender on a larger boat usually has a much smaller deductible and thus filing a claim for a smaller amount may still provide relatively significant benefit.

Uninsured boaters coverage is an option offered by many underwriters. While some carriers use this coverage only for excess medical expenses, others may allow this coverage to waive your deductible for property damage caused by an uninsured boater. If you have this coverage, don’t forget to request its benefits, which may be overlooked by your busy adjuster.

There is very little downside to filing an insurance claim. The worst outcome is generally a denial. Being told “no” and not receiving compensation for the financial exposure is generally worth any loss of your “no claim discount”. Many policies provide a “no claim discount” upon issuance of a policy; some provide a similar discount upon renewal. The loss of this credit is miniscule compared to the amount of the average claim. Multiple claims, however, can result in difficulty in obtaining insurance and cancellation of a policy.

Stay tuned for an exciting follow up, “How to file and manage a boat insurance claim”.


This article was edited on February 26, 2016.

How to Buy Boat Insurance

How to Buy Boat Insurance

Insuring your boat to protect your investment is a sound idea, however in certain circumstances you may need to insure your boat; lenders and marinas often require insurance. Protecting hard-earned assets from liability exposure due to property damage or personal injury, which can occur as a consequence of boat ownership, is prudent.

When you want or need to buy boat insurance, how do you shop and compare boat insurance policies?

The most common comparison is price. If you never have a claim, price is the best comparison. However, there are many other factors, which should be considered.

As with a new suit, the basic fit of the policy is crucial. Your policy must cover your intended use, navigation area, season, winter storage, and overland transportation, as applicable. It is foolish to buy a suit that does not fit, no matter how good it looks on the rack; and it is foolish to buy an insurance policy that does not cover the vessel and your liability exposure during the entire policy year.boatinsurance bldg

Once you determine the size of the suit, you need to decide the color and style. In shopping for boat insurance, the most prudent shopper reads each prospective policy. As this suggestion is at least, as tedious as it is comical, here are some tips.

How are claims paid?

Total losses are paid based on either agreed value or actual cash value. Total losses on agreed value policies pay the declared value, or value agreed to by your insurance agent, or underwriter and you at policy inception. Total losses on actual cash value polices are paid based on a value established post casualty. This value is often established by a marine surveyor hired by the insurance company. While actual cash value policies may be less expensive, a total loss can lead to significant and unwanted negotiations with your insurance adjuster.

Claims are also paid as partial loss claims. Partial loss claims are much more common than total losses. There are a wide variety of clauses that govern partial losses. When shopping boat insurance, the most important aspect of the partial loss payment clause is what components are depreciable/actual cash value versus non-depreciable/new-for-old. Most policies will depreciate sails, canvas, upholstery, and fabric. Many policies will depreciate external finishes, engines, and outdrives. Some policies pay actual cash value or apply depreciation to everything. In the case of a partial loss on an older boat, depreciation can significantly reduce your recovery.

Discern what is covered. Most boat insurance policies are “All Risk”. This means that virtually every loss is covered, unless it is specifically excluded in the policy. Whether the exclusions are in the form of responsibilities, insuring conditions or specifically stated exclusions, insurance companies generally require normal and prudent maintenance. Specific exclusions generally include wear and tear, gradual deterioration, corrosion, and lack of maintenance. Some policies exclude mechanical breakdown, freezing damage, and latent defects.

In conclusion, to choose what boat insurance policy to purchase, consider price, basic coverage and total/partial loss payment methods. There are other “bells and whistles”. Some policy options include personal effects coverage (check limits), towing (check limits), uninsured boaters coverage, pollution/fine coverage, and deductible amounts.

Another important decision when buying insurance is making the choice between a local independent agent or “a direct writer” with whom correspondence is generally by mail and telephone. The difference is analogous to buying a suit from Nordstrom or Nordstrom Rack. The suit from Nordstrom comes with a helpful and courteous professional; Nordstrom Rack offers a better price. Both sell quality products. The local marine insurance agent can perform that tedious process of reading, screening and clarifying the policies, and therefore provide the best fit, color and style. An independent agent can assist if and when a claim arises. This local assistance, personal service and expertise comes with a premium. Direct writers offer discounted rates that can be significant.

Local independent insurance agencies represent many insurance carriers. Most of the carriers represented by the independent agents are domestic (USA companies) and many are regulated by the California Department of Insurance.

Some insurance agencies carry specialty lines of insurance, which are most applicable to unusual vessels, extended navigation limits and commercial risks. Some of these specialty line carriers may not be domestic or regulated by the California Department of Insurance. However, if the agent is trustworthy, the risk of buying an “unregulated” policy is small and many “special needs” can be met.

The Importance of Maintaining Good Boat Insurance

The Importance of Maintaining Good Boat Insurance

As the name of the article implies, we feel that maintaining suitable insurance on your vessel is important. We buy insurance to protect us from unexpected events and there are the obvious reasons to insure your boat and there are lesser known, but important benefits, which we will discuss. Over two decades of assisting marine insurance carriers with damage claims is the perspective from which this article is written and it was inspired by a recent speech at a San Diego area yacht club. The gathering of “seasoned” boaters requested that the undersigned speak about the importance of maintaining suitable boat insurance and how to maintain the boat so it “passes” survey. This is part one of a two part article based on that speech.

Most of the insurance claims which we have handled involve either damage to the boat owned by the insured or financial exposures to the boat owner for liability arising from that ownership. A boat owner can choose to buy liability only insurance, however most boat policies include coverage for both types of losses. Generally, liability only insurance is purchased if the vessel itself can be lost without significant financial harm to the owner, but he or she chooses or is required to provide liability protection for themselves or a marina. This option protects assets other than the boat. Liability only insurance, is usually purchased to save money, as it costs less than a policy offering full coverage. Liability insurance does not offer coverage for damage to your boat.

Damage to your vessel, covered under your policy of insurance is referred to as a first party claim. The handling of the claim including the coverage decisions, adjustment and payments are governed by the insurance policy. The policy is a contract between the insured and the insurance carrier and it stipulates what is covered, what is excluded, what is depreciated and other important details. On the declarations page of the policy you will find your limits of coverage, deductibles and the various components of the policy, which will include vessel value limitation and liability exposure limitations.

Typical first party claims involve submersions or partial submersions, collisions or an allision *, fires, smoke and machinery failure. The basic purpose for property damage coverage in your boat insurance claim is to minimize your financial exposure due to an unexpected, accidental loss to your boat. Many policies also use language such as “sudden” and “fortuitous”, with the idea that gradual wear and tear, deterioration and normal maintenance are not covered.

In the second part of this article we will discuss the most common causes of the typical claims and how to maintain a vessel to prevent them. The underlying idea that the claims are “unexpected” is the most important motivation for maintaining first party coverage. While most of the boat owners with whom we interface while handling claims did not anticipate the loss, many times there are clues which foreshadowed the loss. Being aware of a subtle, small change in the condition of the vessel will often prevent a significant loss by breaking the chain of unfortunate circumstances which often precede a significant damage claim.

Submersions often occur due to the failure of a bilge pump, or so we are told by boat owners. In every submersion claim we have ever handled, the basic cause of the loss is always the same. While the bilge pump failure may have contributed, the true cause of the submersion is always “too much water on the inside”. Boats, even wooden boats, should keep the water on the outside. If you find water accumulating in the bilge, or the bilge pump is cycling, determine the source of the leak immediately.

Similarly address any change in the condition or function of the boat and its systems when they are first noticed. If the circuit breaker trips, determine the cause and address it appropriately. If your engine has always been reliable and starts on the first turn, but today cranks for several seconds before starting. Don’t ignore the clues your boat is trying to give you. We have noticed that recreational boats’ engines rarely wear out; the failures are usually the result of a component failure that goes unchecked. Conversely commercial boat’s engines hiccup and the captain notices and addresses the issue, leading to much longer service lives than recreational boats’ engines.

Machinery failure is a component of boat insurance policy that is often misunderstood. Some policies exclude machinery failure. Most policies provide coverage for machinery failure, but all policies limit coverage based on the cause of loss. We see engine failures covered by boat insurance policies regularly. Maintain the vessel and the engine; pay attention to clues to prevent catastrophic failure but don’t overlook possible assistance from your insurance policy if a catastrophe occurs.

A boat owner’s nephew was taking the boat out on a summer holiday. After a short time, he noticed a change in the engine. The change was small and included a different noise and a change in the exhaust smoke. He slowed the engines, turned them off and discussed the situation with the other passengers. Nobody aboard was an experienced, seasoned mariner. They decided to restart the engines, without checking the engine room or determining the cause of the change. Everything appeared normal and they continued on their holiday excursion. A short time later the cabin was filled with smoke and the voyage was aborted as the operator and passengers were rescued and the vessel was attended by the fire department and towed to a boat yard.

The inspection revealed that there was a fire in the engine room. The fire was initiated by the failure of an exhaust hose. The exhaust hose failed due to cooling water blockage in the engines exhaust mixing elbow. The blockage in the mixing elbow was caused by corrosion and is a common failure mode.

The good news was the passengers were rescued and uninjured. The fixed fire extinguisher in the engine room functioned properly and the vessel was not a total loss. The bad news was the claim was denied and preventable. Had the operator checked the engine after the first indication of a problem, he would have likely been alerted to the impending failure of the exhaust system and could have discontinued using the vessel until proper repairs were made.

Fire damage claims do not always arise due to causes that are aboard the insured vessel. Fire claims are a common third party claim. Third party claims are when a claim is made for damage to your property, against an insurance policy for something other than your boat, like another boat, boat yard or marina or when others make a claim on your policy for damage to their property. Just because a fire starts on another vessel and damages your boat, don’t assume that the other boat’s insurance policy will pay for the damage to your vessel. If the cause of the fire is deemed to be negligence on the part of the boat owner, coverage may be extended. However, if the cause is not deemed to be negligence you may have to rely on your own policy to cover the expense for repairing the damage to your vessel. For instance, a fire caused by a cigarette butt thrown onto your neighbor’s vessel is not due to the neighbor’s negligence. Many times, the exact cause of the fire is never definitively determined. This is another reason to assure that your vessel has property damage coverage to protect your investment and your asset. Fires also illustrate the benefits of liability coverage.

The liability portion of your policy covers you from financial exposures which arise due to the ownership, maintenance or operation of your vessel. Most boat owners consider liability protection as defense against law suits such as personal injury claims or damages resulting from collisions from other vessels or structures. These are the normal uses, occasions arise where even the circumstances of these somewhat anticipated situations are surprising and the liability portion of your policy provides additional protection which you may not have considered. A somewhat unique circumstance arose during a sea trial of a vessel which was pending sale. Engine control failure resulted in the vessel colliding with a private dock during the sea trial, with the potential owner aboard. The vessel’s owner was not aboard, but his insurance policy remained in effect. The insurance policy took care of the expense of repairing the private dock and the skilled broker salvaged the transaction, leaving all parties satisfied. This example illustrates why the policy should remain in effect until the ownership is fully and completely transferred and illustrates the benefits of the liability portion of the policy resulting from an unexpected incident.

It is unlikely that any other policy, including your homeowner’s policy, will provide coverage from liability arising from ownership of a vessel. Most homeowner’s policies specifically exclude liability arising from ownership or operation of a watercraft.

If your vessel was to suffer the unfortunate circumstance of a submersion or a partial submersion, the liability portion of your boat insurance policy is where coverage can be found for salvage. Salvers maintain expensive equipment and have highly specialized skills and experience. If their skill and equipment is used to raise your vessel, you will learn how expensive their expertise can be. The salvage expense will likely be borne by your boat insurance carrier. Vessel towing policies generally exclude even simple de-watering operations and virtually never include coverage for salvage operations of any kind.

Many marinas require liability insurance and may require being named as an additional insured on your policy. This requirement may be enforced at your home marina or at a guest dock while cruising. Some policies provide coverage for costs to mitigate pollution, including fuel spills and may even pay the fines which accompany the spill. These are additional benefits from maintaining suitable insurance on your boat.

By far, the best insurance is a knowledgeable boat owner, an active maintenance schedule and an operator who pays attention to subtle clues that the boat gives. As the above examples illustrate, accidents do happen. Insure the vessel, protect the value of the asset and insulate your personal wealth with a suitable boat insurance policy.

* The striking of one ship by another (The Random House Dictionary of the English Language – the unabridged edition)

In addition to maintaining adequate boat insurance, some losses involving a vessel may be covered by other policies. Homeowner’s insurance often covers loss of personal property and is not limited to the loss of that property from the insured residence. For instance, a watch stolen or lost while boating may be covered by a homeowner’s policy. Some types of boating losses will be specifically excluded by many homeowners’ policies, primarily losses involving the boat itself or liability arising from boat ownership. Those who carry umbrella policies should confirm with their agent that their boat insurance policy and limits are appropriate so that the umbrella policy’s coverage will be seamless.