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Bahamas and Caribbean Insurance Coverage

CW Bill Rouse
 

All,

I am not a lawyer and the following is based on what I believe to be factual.

Insurance coverage is a huge challenge and which company is better or worse changes frequently and without notice. Insurance coverage for your Amel is not about price as much as being about what the price actually buys. 

Most insurers include language in policies that legally allow claim-denial. Most insurers force policy holders to litigate in states or regions which do not allow the insured to seek a legal remedy for "Bad Faith" on the part of the insurance company. Recently an Amel SM owner was denied a claim for a salon fire caused by a lightning strike on the mainmast. Before giving a notice of denial the insurance company filed a fraud lawsuit against the owner for fraudulently claiming his Amel was seaworthy (typical policy language) because the engine room fire extinguisher had an expired date. The fraud lawsuit sought to invalidate the policy based on fraud. The policy required the insured to litigate in a state which gave the insured no ability to claim Bad Faith on the part of the insurance company.

Some "insurance companies" are actually a co-op backed by "assets" of poor ilanders located on a Caribbean island, where there is no required minimum assets on the part of the insurance company. Think about that one. 

More than a few of my clients use an agent, and most use:
Gary & Elliott Golden
Manifest Marine
604 Stonewall Lane
Fredericksburg, Virginia 22407 USA
Gary@...
Elliott@...
https://manifestmarine.com/

I hope this helps.


Best,

CW Bill Rouse 
Amel Owners Yacht School
+1 832-380-4970 | brouse@...
720 Winnie, Galveston Island, Texas 77550 
www.AmelOwnersYachtSchool.com 
Yacht School Calendar: www.preparetocastoff.blogspot.com/p/calendar.html


   

On Wed, Nov 2, 2022, 09:51 Arlo Bess <svplanb@...> wrote:
Thanks everyone for all the information. I am knee deep in the insurance hunting now. Will let everyone know how it goes and my experience.

Jeffrey Pardo
 

Bill:

I’m a Florida lawyer. Insurance contracts are interpreted like any other contract.  However, because they are prepared by the insurance company and are non-negotiable, courts tend to construe them against the drafter – the insurance company.

On many claims, insurance companies deny first, deny the appeal, and require the insured to fight them if there is ANY issue that they think will sustain their denial.

Most states permit insured to sue the insurer for a bad faith denial.  It’s basically a claim for breach of the insurance contract.

With an expired fire extinguisher, several factual and legal issues come to mind:

  1. Does the policy language expressly and explicitly require the fire extinguishers to be current?  General language might not suffice to put an insured on notice of that requirement.
  2. Did the lack of a current fire extinguisher prevent the fire  from being extinguished?  In other words, did the insured try to use the fire extinguisher and it didn’t work because it was expired?
  3. Was the fire extinguisher accessible such that it possibly could have been used to put out the fire?  If not, then the lack of the current status wouldn’t have made a difference in the loss.

As with all legal matters, it’s best to engage an attorney who is well-versed in insurance claims BEFORE filing your claim – and definitely after you’ve been denied because of a technicality.

While I don’t intend this message to be deemed legal advice (CYA), the denial of a claim because of a technicality should not be considered the end of the matter.

 

Jeffrey Pardo

Not yet an Amel owner

 

 

 

Sent from Mail for Windows

 

From: CW Bill Rouse
Sent: Wednesday, November 2, 2022 11:20 AM
To: main@AmelYachtOwners.groups.io Notification
Subject: Re: [AmelYachtOwners] Bahamas and Caribbean Insurance Coverage

 

All,

 

I am not a lawyer and the following is based on what I believe to be factual.

 

Insurance coverage is a huge challenge and which company is better or worse changes frequently and without notice. Insurance coverage for your Amel is not about price as much as being about what the price actually buys. 

 

Most insurers include language in policies that legally allow claim-denial. Most insurers force policy holders to litigate in states or regions which do not allow the insured to seek a legal remedy for "Bad Faith" on the part of the insurance company. Recently an Amel SM owner was denied a claim for a salon fire caused by a lightning strike on the mainmast. Before giving a notice of denial the insurance company filed a fraud lawsuit against the owner for fraudulently claiming his Amel was seaworthy (typical policy language) because the engine room fire extinguisher had an expired date. The fraud lawsuit sought to invalidate the policy based on fraud. The policy required the insured to litigate in a state which gave the insured no ability to claim Bad Faith on the part of the insurance company.

 

Some "insurance companies" are actually a co-op backed by "assets" of poor ilanders located on a Caribbean island, where there is no required minimum assets on the part of the insurance company. Think about that one. 

 

More than a few of my clients use an agent, and most use:

Gary & Elliott Golden
Manifest Marine
604 Stonewall Lane
Fredericksburg, Virginia 22407 USA
Gary@...
Elliott@...
https://manifestmarine.com/

I hope this helps.

 

 

Best,

CW Bill Rouse 
Amel Owners Yacht School
+1 832-380-4970 | brouse@...
720 Winnie, Galveston Island, Texas 77550 
www.AmelOwnersYachtSchool.com 
Yacht School Calendar: www.preparetocastoff.blogspot.com/p/calendar.html


   

 

On Wed, Nov 2, 2022, 09:51 Arlo Bess <svplanb@...> wrote:

Thanks everyone for all the information. I am knee deep in the insurance hunting now. Will let everyone know how it goes and my experience.

 

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CW Bill Rouse
 

Jeffrey,

My comments/answers in red:

It was not my claim nor was it my Amel. I know the owners and the information I wrote was based on what I was told.

  1. Does the policy language expressly and explicitly require the fire extinguishers to be current?  General language might not suffice to put an insured on notice of that requirement. I believe it fell into the definition o seaworthy
  2. Did the lack of a current fire extinguisher prevent the fire  from being extinguished? No, the fire was not in the engine room and was devoted to the engine room. There was no fire in the engine room In other words, did the insured try to use the fire extinguisher and it didn’t work because it was expired?
  3. Was the fire extinguisher accessible such that it possibly could have been used to put out the fire? The fire extinguisher was an automated extinguisher devoted to the engine room and the vessel was unoccupied at the time of the fire and strike If not, then the lack of the current status wouldn’t have made a difference in the loss.

I understand what you are saying. It was obviously a situation where the insurance company, through their surveyor, looked for a reason to deny the claim. Unfortunately having a claim acknowledged and paid should not require lawyers and courtrooms. It seems to me that many claims do require lawyers and courtrooms. It shouldn't be that way, but it is in the US. 


CW Bill Rouse Amel Owners Yacht School
720 Winnie, Galveston Island, Texas 77550 
   

On Wed, Nov 2, 2022 at 11:46 AM Jeffrey Pardo <abi.gezunt.farm@...> wrote:

Bill:

I’m a Florida lawyer. Insurance contracts are interpreted like any other contract.  However, because they are prepared by the insurance company and are non-negotiable, courts tend to construe them against the drafter – the insurance company.

On many claims, insurance companies deny first, deny the appeal, and require the insured to fight them if there is ANY issue that they think will sustain their denial.

Most states permit insured to sue the insurer for a bad faith denial.  It’s basically a claim for breach of the insurance contract.

With an expired fire extinguisher, several factual and legal issues come to mind:

  1. Does the policy language expressly and explicitly require the fire extinguishers to be current?  General language might not suffice to put an insured on notice of that requirement.
  2. Did the lack of a current fire extinguisher prevent the fire  from being extinguished?  In other words, did the insured try to use the fire extinguisher and it didn’t work because it was expired?
  3. Was the fire extinguisher accessible such that it possibly could have been used to put out the fire?  If not, then the lack of the current status wouldn’t have made a difference in the loss.

As with all legal matters, it’s best to engage an attorney who is well-versed in insurance claims BEFORE filing your claim – and definitely after you’ve been denied because of a technicality.

While I don’t intend this message to be deemed legal advice (CYA), the denial of a claim because of a technicality should not be considered the end of the matter.

 

Jeffrey Pardo

Not yet an Amel owner

 

 

 

Sent from Mail for Windows

 

From: CW Bill Rouse
Sent: Wednesday, November 2, 2022 11:20 AM
To: main@AmelYachtOwners.groups.io Notification
Subject: Re: [AmelYachtOwners] Bahamas and Caribbean Insurance Coverage

 

All,

 

I am not a lawyer and the following is based on what I believe to be factual.

 

Insurance coverage is a huge challenge and which company is better or worse changes frequently and without notice. Insurance coverage for your Amel is not about price as much as being about what the price actually buys. 

 

Most insurers include language in policies that legally allow claim-denial. Most insurers force policy holders to litigate in states or regions which do not allow the insured to seek a legal remedy for "Bad Faith" on the part of the insurance company. Recently an Amel SM owner was denied a claim for a salon fire caused by a lightning strike on the mainmast. Before giving a notice of denial the insurance company filed a fraud lawsuit against the owner for fraudulently claiming his Amel was seaworthy (typical policy language) because the engine room fire extinguisher had an expired date. The fraud lawsuit sought to invalidate the policy based on fraud. The policy required the insured to litigate in a state which gave the insured no ability to claim Bad Faith on the part of the insurance company.

 

Some "insurance companies" are actually a co-op backed by "assets" of poor ilanders located on a Caribbean island, where there is no required minimum assets on the part of the insurance company. Think about that one. 

 

More than a few of my clients use an agent, and most use:

Gary & Elliott Golden
Manifest Marine
604 Stonewall Lane
Fredericksburg, Virginia 22407 USA
Gary@...
Elliott@...
https://manifestmarine.com/

I hope this helps.

 

 

Best,

CW Bill Rouse 
Amel Owners Yacht School
+1 832-380-4970 | brouse@...
720 Winnie, Galveston Island, Texas 77550 
www.AmelOwnersYachtSchool.com 
Yacht School Calendar: www.preparetocastoff.blogspot.com/p/calendar.html


   

 

On Wed, Nov 2, 2022, 09:51 Arlo Bess <svplanb@...> wrote:

Thanks everyone for all the information. I am knee deep in the insurance hunting now. Will let everyone know how it goes and my experience.

 
Rodney Aylmore
 

It is an interesting predicament and there are a few things that insurance buyers can do to avoid similar situations:

1. Maintain an inspection and maintenance regime and document the same. Preferably any documents would be held in the cloud, so in the event of a fire the evidence that such a system existed is not lost
2. Read your policy, read your policy, read your policy. Insurance is too often treated with disrespect and contempt as a grudge purchase, and the terms and conditions only read line for line after a claim occurs. Which leads me to point 3:
3. Ideally use a broker, even if it costs more, as they are generally adept at deciphering insurance lingo distinguishing the differences between competing proposals. They can be invaluable at the time of a claim to argue the nuances of insurance without having to appoint solicitors. Certainly in Australia the broker would argue that the proximate cause of the fire was lightning and the expired extinguisher had not caused the insurer any prejudice. 

The insurance market remains tough and I can't see this changing in the foreseeable future, particularly in light of frequency and intensity of hurricanes/cyclones. This means that insurers are generally increasing prices, deductibles/excess whilst restricting coverage. It also means that they are more inclined to find reasons to avoid liability for claims. This is well reported in the contemporary media.

I recently went through the process of obtaining quotes for a hypothetical purchase to ensure that I could actually acquire insurance at a reasonable premium when the time arrived. I received two proposals and both have their pros and cons. One policy had a blanket LiFEPO4 exclusion and an exclusion for the vessel dragging at anchor when there is a severe weather warning of any kind. The second proposal was less onerous but still had a broad and open ended condition that the vessel be maintained for its intended use however, the jurisdiction and choice of law under the policy was not from my country of residence (Australia) and this would be a concern as a potential insurance buyer.

Your mileage may vary.

 

I am an insurance broker (client agent) by profession but the yacht/bluewater cruising space is not an area I practice in. 
Bill Kinney
 

Here is a very good article about the issues around the “Implied Warranty of Seaworthiness” and how it relates to yacht insurance.  It has the potential to be a real “gotcha” in the event of a claim.  

https://www.greatlakesscuttlebutt.com/news/featured-news/ask-the-expert-implied-seaworthiness/

Read it very carefully.  Under US admiralty law, unless your policy EXPLICITLY rejects it, it applies to you, even if not mentioned in the policy. I have read too many yacht insurance policies, and only seen one that rejected the warranty of seaworthiness. That policy is no longer being written.

Bill Kinney
Tyrell Bay, Carriacou, Grenada
http://www.cruisingconsulting.com

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