Potential Claims Issues Facing Marine Insurance Policyholders After Suffering a Loss

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

As the calendar reflects the seasonal change from summer to fall, Florida boat owners need to start thinking about winterizing their vessels.  The process of protecting your investment includes ensuring that your marine coverage is appropriate given the risks to your substantial investment, including theft, collisions, and weather damage.  A recent report from the National Insurance Crime Bureau (NICB) indicates that theft related losses for watercrafts continued a recent decline in 2014, but the risk remains substantial.  There are approximately 432 vessels per month stolen across the U.S. according to the report.  This blog answers frequently asked questions (FAQs) about insurance claims issues involving vessels.

What is marine insurance coverage in broad terms?

This form of policy refers to a contractual relationship between an insured who pays a premium and the carrier who agrees to financially cover damage from certain perils to the vessel or a liability claim from an accident involving bodily injury.    The specific scope of coverage and exclusions vary between policies, so owners of yachts, personal watercrafts (PWCs), powerboats, fishing boats, yachts, cabin cruisers, sailboats, and personal watercrafts should carefully review their policy to ensure they have the proper coverage.

What are common types of claims disputes that can result in a maritime insurance claim?

Although the full spectrum of potential claims is virtually limitless, some of the most common types of claims include complicated hull and machinery claims including 1st party disputes; maritime salvage claims; boats sinking offshore or while docked; denied boat insurance claims; boats damaged by collisions, storms, lightning.

How does the legal framework of maritime insurance law in the U.S. make it especially important to retain legal counsel?

The United States have never formally codified maritime insurance law, so judges look to applicable federal maritime law or state law when interpreting maritime insurance policies.  Federal law will control many issues, but other issues will be a matter of state law.  This complexity in terms of determining the applicable law that governs a claims dispute makes it imperative that policyholders be represented by an experienced maritime insurance law attorney.

What issues generally must be negotiated in an insurance claims dispute involving a vessel?

There are a number of issues that often arise which our Florida maritime insurance lawyers routinely analyze in claims dispute:

Policy Ambiguity: The language of a policy might be ambiguous because relevant terms are not defined, unclear language makes coverage or exclusions difficult to interpret, or conflicting provisions suggest coverage in one part of the policy and non-coverage in another section.  Our Florida boat insurance law firm often uses such ambiguity to benefit our clients.  Since insurance companies generally draft the entire insurance agreement, judges typically construe any lack of clarity against the insurance carrier.

“All Risk” vs. “Name Perils” Policies: The type of policy must be analyzed because these two broad types of policies work very differently.  While named peril coverage is limited to specifically articulated hazards and situations, all risk coverage generally extends to all fortuitous risks that are not expressly excluded under the policy.  Types of risks that typically would not be considered fortuitous include ordinary wear and tear, inherent defects, and intentional misconduct by the policyholder.

Broker Role: The insurance broker is considered an agent of the insured in most cases despite having a clear financial relationship and ties to both the carrier and policyholder.  However, an insurance company can be liable if the agent fails to exercise the proper standard of care in analyzing an insured’s coverage needs depending the the relationsgip netween the broker/carrier/insured.  If a type of coverage should have been identified as not falling within the scope of the policy, the carrier might be compelled to cover the claim.  The information provided to the broker must be evaluated to determine whether the agent should have advised the insured about the additional types of coverage.

Misrepresentation/Inadvertent Material Omission: Many claims disputes will be based on allegations by the insurer that the policyholder lied or failed to disclose relevant information.  Our law firm will examine whether the information submitted by the agent/broker corresponds with the responses actually provided by the insured.  Our insurance claims lawyers also investigate whether the inadvertent non-disclosure or inaccuracy is “material.”  A lie or undisclosed fact generally will be considered material only if it would have affected the carrier’s decision to issue the policy based on the premium and terms offered.

When a boat owner runs into a stonewall put up by adjusters, investigators, and other insurance company representatives, an experienced Miami Marine Insurance Claims Attorney can help you navigate obstacles in the claims process and challenge an unjustified denial.  Our Miami insurance claims law firm invites you to contact us if you are having difficulties with your insurance company.  Miami insurance claims lawyer J.P. Gonzalez-Sirgo handles claims disputes involving property damage under insurance policies in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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