Collision, who pays?

[Gypsyjoss]

In a bay on Kithnos, we witnessed a collision between two charter boats and one was damaged. One had a Polish crew and the other that was damaged by the Poles had an English crew. Different charter companies. The Poles refused to acknowledge their guilt or give details.

When the English guys return their boat will they lose their deposit? I'm intrigued to know how this is this sorted out? Can charterers buy an accident damage waiver insurance like you buy for hire cars?

Pete

 

[Tranona]

In a bay on Kithnos, we witnessed a collision between two charter boats and one was damaged. One had a Polish crew and the other that was damaged by the Poles had an English crew. Different charter companies. The Poles refused to acknowledge their guilt or give details.

When the English guys return their boat will they lose their deposit? I'm intrigued to know how this is this sorted out? Can charterers buy an accident damage waiver insurance like you buy for hire cars?

Pete

In answer to your second question there is usually a choice of paying an additional premium to cover the excess on the policy, or paying a deposit by credit card. Clearly the first means no additional cost to the charterer if there is damage, but the latter will result in a charge against the credit card. will depend on the operator which is offered and the charterer may or may not have a choice.

 

[Tony Cross]

In a bay on Kithnos, we witnessed a collision between two charter boats and one was damaged. One had a Polish crew and the other that was damaged by the Poles had an English crew. Different charter companies. The Poles refused to acknowledge their guilt or give details.

When the English guys return their boat will they lose their deposit? I'm intrigued to know how this is this sorted out? Can charterers buy an accident damage waiver insurance like you buy for hire cars?

Pete

If you're still in contact with the English guys get them to make a written statement to the port police as soon as possible. From personal experience (when we were damaged) the PP take this kind of thing seriously, plus it gives them something interesting to do with the exciting possibility of being able to arrest the offending boat!

 

[bedouin]

Certain charter companies certainly offer the option of a damage waiver at a considerable cost (£100 pw IIRC) under threat of you being liable for all loss and damage if you don't take it.

IMHO this is nothing short of criminal - clearly a way of ripping off customers, but it would be a brave person who declined it.

 

[Tranona]

Certain charter companies certainly offer the option of a damage waiver at a considerable cost (£100 pw IIRC) under threat of you being liable for all loss and damage if you don't take it.

IMHO this is nothing short of criminal - clearly a way of ripping off customers, but it would be a brave person who declined it.

No different from any other form of insurance (such as hire cars). There is usually a substantial excess on the boat's insurance (mine was 1000 euros on my charter boat) - so the charterer either has to accept that risk or insure against it. Lowish value damage is common on charter boats and somebody has to pay for it, and why should the operator take the risk for something that is outside his control? So long as it is clear up front, can't see a problem.

 

[bedouin]

No different from any other form of insurance (such as hire cars). There is usually a substantial excess on the boat's insurance (mine was 1000 euros on my charter boat) - so the charterer either has to accept that risk or insure against it. Lowish value damage is common on charter boats and somebody has to pay for it, and why should the operator take the risk for something that is outside his control? So long as it is clear up front, can't see a problem.

The problem is that the premium I am sure is much greater than the genuine cost the the company - but there is no option but to go with their premium or to take the risk themselves. Also you are taking the entire risk - not just the cost of the excess.

I insure by boat for an entire season for £250 so why is it reasonable to pay £100 for one week cover on a boat that is already insured.

 

[Tranona]

The problem is that the premium I am sure is much greater than the genuine cost the the company - but there is no option but to go with their premium or to take the risk themselves. Also you are taking the entire risk - not just the cost of the excess.

I insure by boat for an entire season for £250 so why is it reasonable to pay £100 for one week cover on a boat that is already insured.

Suggest you get a quote for insurance with no excess and see how the premium rockets. Insurance against small claims is disproportionately expensive because the risks are higher and the costs of handling such claims high. Why do you think insurers insist you take a voluntary excess? Your boat insurance is cheap because you, in a little used private boat are low risk. When I stopped chartering my boat the premium dropped by over 50% and the excess from 1000 euros to £250 - gives you an idea of the relative risks.

It is irrelevant whether the operator is making a "profit" on selling the waiver - it is for the buyer to decide if he is prepared to risk the 1000 euro potential liability or pay the premium - and no, he is not taking the entire risk. He has already paid his share of the insurance of the high value boat in the charter fee, all he is insuring is the very risky low value claim of up to the first 1000 euros, not the 150000 that the boat is probably insured for.

 

[bedouin]

It is irrelevant whether the operator is making a "profit" on selling the waiver - it is for the buyer to decide if he is prepared to risk the 1000 euro potential liability or pay the premium - and no, he is not taking the entire risk. He has already paid his share of the insurance of the high value boat in the charter fee, all he is insuring is the very risky low value claim of up to the first 1000 euros, not the 150000 that the boat is probably insured for.

It would not be legal in this country - the buyer is in effect being forced to buy an over priced package and does not have the option of getting a fair market price.

Also if the owner is already insured why should the charterer be liable for the entire damage, not just the excess.

No - the way it is set up is a money-making con.

As the owner when you were paid that £100 for the week's insurance did you really go out and buy a policy to cover that? If so how much did it cost?

 

[Tranona]

It would not be legal in this country - the buyer is in effect being forced to buy an over priced package and does not have the option of getting a fair market price.

Also if the owner is already insured why should the charterer be liable for the entire damage, not just the excess.

No - the way it is set up is a money-making con.

As the owner when you were paid that £100 for the week's insurance did you really go out and buy a policy to cover that? If so how much did it cost?

Just wonder whether you are deliberately misunderstanding what I am saying.

Lets get this clear. The charterer pays his share of the insurance of the boat (less the excess) as part of the fee for using the boat. The extra he is paying is to insure against any losses that are not already covered. What is so difficult about that?

This is exactly the same as when you hire a car in the UK - fail to see how you can say it is not legal!

You have a choice in both cases. First carry the risk yourself. Second buy the extra cover offered by the hirer. Third find an alternative insurer to cover the risk.

The third option is widely available in the UK for hire car insurance, but not worth it unless you are a regular hirer and need an annual policy. Therefore by the short term insurance offered by the hirer. It does indeed cost more than an annual policy - but it is pointless trying to compare it with the annual policy on a private boat/car - entirely different risks. For hire cars the daily rate falls dramatically the longer you have the car for. For example i hired a car in New Zealand and for 3 weeks the extra insurance cost less than £2 a day, compared with £10 a day for a one day hire.

However, not sure that you have the option of buying separate insurance for the excess on yacht charters simply because few people are regular users and most will only need one off short term policies for the week or 2 that they have the boat.

As to whether it is good value or a con, just think through the consequences rather than concentrating on an amount of money that is just a fraction of the total cost of a week's charter. Useful to use the incident that started this thread. Assume the Brits are not able to get any redress from the other boat. They have to return the boat to the operator in a usable condition or compensate the operator. If they have insured, they can have their final meal in a taverna, then just walk away and catch a plane home knowing the cost will be met by the insurer. If they are carrying the risk themselves they will either lose their deposit or end up having an argument with operator who has an obligation to get the boat ready for the next customer arriving the next day. Which scenario do you think is better for both parties?

If you have ever been involved with a hirer in case where there was uninsured damage to the car/boat then you will appreciate why extra insurance is sensible. The one occasion it happened to me took 6 months of arguing and threatening to get an agreeable settlement.

So, you have the choice - but now you can make it in the full knowledge of what you are buying (rather than your seeming misunderstanding). There is nothing unusual, or illegal about these arrangements. Insurance is about pricing risk and the higher the risk the higher the premium - and the risk of low value damage in charter boats in the med is high (as I know to my cost with my own boat).

 

[bedouin]

Just wonder whether you are deliberately misunderstanding what I am saying.

Lets get this clear. The charterer pays his share of the insurance of the boat (less the excess) as part of the fee for using the boat. The extra he is paying is to insure against any losses that are not already covered. What is so difficult about that?
.

I think you are misunderstanding what I am saying - because that is not how it works in all cases.

If (as it is in some car hire) the extra payment were to cover the excess that would be fine. But that is not the way it works in some cases.

If you don't pay the premium then some hirers say you are liable for the full damage to the vessel (even though most of it is already covered by the insurance you have already contributed to).

The costs are far from trivial - can be about an additional 10% on top of the hire charge.

I assure you these practices are quite properly illegal in this country.

 

[macd]

I assure you these practices are quite properly illegal in this country.

Could you clarify which "this country" is?

 

[bedouin]

Could you clarify which "this country" is?

UK

 

[Tranona]

I think you are misunderstanding what I am saying - because that is not how it works in all cases.

If (as it is in some car hire) the extra payment were to cover the excess that would be fine. But that is not the way it works in some cases.

If you don't pay the premium then some hirers say you are liable for the full damage to the vessel (even though most of it is already covered by the insurance you have already contributed to).

The costs are far from trivial - can be about an additional 10% on top of the hire charge.

I assure you these practices are quite properly illegal in this country.

You seem very confused. What are we talking about here - cars or charter boats?

Again get one thing clear. If you take responsibility for another person's property you are liable for any damage that occurs when it is within your care. Hire companies and charter operators insure their property against damage their hirers do up to the value of the asset, but just as with private insurance their insurers insist on an excess amount for each claim (and there may also be other exclusions). The cost of this insurance is normally included in the hire charge. The liability for the uninsured losses lies with the hirer.

As I have patiently explained, the hirer can carry this liability himself, but the operator normally requires a refundable deposit (or a credit card charge) equal to the uninsured loss. Or the hirer will offer an insurance policy to cover the potential uninsured loss for an additional charge.

Some people take the first option and get their deposit returned if there is no damage, others, perhaps more risk averse, pay the extra premium. Nothing unusual or illegal in such arrangements.

Trying to understand what sort of arrangement you are talking about and why you think it could be illegal. I suppose it is possible for a hire rate to exclude any insurance at all and the hirer has to pay for a premium to cover liability for the whole value. This would indeed be a significant additional sum to the hire charge - but not illegal. All that is doing is moving the insurance element of the hire company's costs from the hire rate to a separate charge. Probably not good marketing and not good value as, for obvious reasons an individual week's insurance policy is going to be more expensive than a share of an annual premium.

If a hire company says you have to pay for insurance as a separate item before you hire the car/boat as it is otherwise not insured at all, that is not illegal - how could it be? If on the other hand they advertised a rate that said insurance was included and then attempted to charge a compulsory extra without advising beforehand you may well have a case for misrepresentation. However, if they were upfront and said their rates did not include insurance for losses not covered by their insurance, and an additional premium was required as a condition of the hire, this would still not be illegal - but as I said probably not very good marketing.

Perhaps you are confusing the well known practice of hire companies pressurising clients to buy additional insurance at point of collection with dire warnings of the potential consequences of not doing so. This is indeed bad practice, but not necessarily illegal - and as I pointed out earlier, the dire consequences can indeed be very real when you get home from your holiday abroad and find a charge on your credit card for damage they claimed you were responsible for and you face a long fight to get your money back.

This has gone a long way from the original thread. It does not take much effort to find out what the situation is with regard to insurance when you charter a boat - just ask the operator. When I chartered my boat out in the Med, the manager made sure that clients knew what to expect and the options with respect to my potential uninsured losses. The client either had to buy the waiver policy or leave a deposit equal to the excess before he could take the boat. Either way the client knew he would not get any additional claims against him (or would get his deposit back if no damage) and the manager and I knew that all minor damage could be repaired without resorting to a major insurance claim.

 

[KellysEye]

Every charter company used by LateSail has a damage waiver paid up front which is returned if there is no damage.

 

[Tranona]

Every charter company used by LateSail has a damage waiver paid up front which is returned if there is no damage.

That seems to be a refundable deposit, not an insurance policy. So the customer is liable to lose the whole lot if there is any damage whereas an insurance is likely to be cheaper and removes any risk. An insurance is in many ways better if you are risk adverse as a refundable deposit leaves open the possibility of disputes, but of course depends on the size of the premium whether you find it attractive.

 

[KellysEye]

>An insurance is in many ways better if you are risk adverse as a refundable deposit leaves open the possibility of disputes, but of course depends on the size of the premium whether you find it attractive.

Insurance is possible but it's not refundable and not cheap. One funny story about boat damage is we were in Gouvia marina, Corfu when a charter boat came in and got their refundable deposit. Only the next day did Sunsail realise that the boat was holed just above the waterline, so they could have only sailed on one tack.

 

[Tranona]

>An insurance is in many ways better if you are risk adverse as a refundable deposit leaves open the possibility of disputes, but of course depends on the size of the premium whether you find it attractive.

Insurance is possible but it's not refundable and not cheap. One funny story about boat damage is we were in Gouvia marina, Corfu when a charter boat came in and got their refundable deposit. Only the next day did Sunsail realise that the boat was holed just above the waterline, so they could have only sailed on one tack.

Exactly why insurance is better from the operator's point of view. It is expensive because the insurer does not quibble over the relatively small amounts. Of course it is not refundable to the hirer - he is paying to eliminate any risk. Of course many hirers prefer to take the risk of losing their deposit, but it tends to lead to them not reporting any damage if they can hide it.

 

[sailaboutvic]

Do you not think the reason that insurance is expense is because insurers know that charter company don't really care who or what experiences the people they charter out too and the risk of damage to the hire boat let alone to other people boat is high .
After what we seen over the years I very surprise there isn't more serious damage .or maybe they are and we just not seen them .
I have no sympathy with charter who have to pay high insurance or having to leave large deposit in case of damage personal I think it should be a lot higher then maybe people will thing twice about charting boat which are much too big for them to handle , all my sympathy goes to the boat owners who boat are damaged by these in some cases very inexperienced people trying to maneuver boat of up to 55 feet and in some cases more , A monkey can steer a big boat in open water but it a very different thing when your surround by other boats now put in the wind factor and that poor monkey hasn't a chance . One can only hope has the monkey bounces off other boats the damage is only done to his own boat and not to others .
Charter company really need to be more responsible to who they hire to and not take the view , the boat covered so what .

 

[jacaldo]

We've sailed in the med for 14 years, 9 of those years as owners. I now charter, does that make me and my wife monkeys??

 

[Tranona]

Do you not think the reason that insurance is expense is because insurers know that charter company don't really care who or what experiences the people they charter out too and the risk of damage to the hire boat let alone to other people boat is high .
After what we seen over the years I very surprise there isn't more serious damage .or maybe they are and we just not seen them .
I have no sympathy with charter who have to pay high insurance or having to leave large deposit in case of damage personal I think it should be a lot higher then maybe people will thing twice about charting boat which are much too big for them to handle , all my sympathy goes to the boat owners who boat are damaged by these in some cases very inexperienced people trying to maneuver boat of up to 55 feet and in some cases more , A monkey can steer a big boat in open water but it a very different thing when your surround by other boats now put in the wind factor and that poor monkey hasn't a chance . One can only hope has the monkey bounces off other boats the damage is only done to his own boat and not to others .
Charter company really need to be more responsible to who they hire to and not take the view , the boat covered so what .

Insurance is not hugely expensive if in a group policy. On my boat for 2007 it was 1200 euros, but with 1000 euros excess. Insured value 80000 euros. This is recovered through charter fees. Major damage (over 1000 euros) is not common - mine had only one claim in 7 seasons. However, as I explained several times earlier, small value damage - bumps, scrapes, bent stanchions, dented toe rails etc is common and either does not affect the running of the boat or can be fixed quickly. Cost of this is recovered from clients deposit, or waiver insurance. The latter is expensive for the reasons stated earlier.

When you consider the number of boats, the high level of usage and the congested harbours, damage is low - other breakages such as electrical, plumbing, rigging etc are greater. Again, looking at my costs for that last year when my boat was getting old, those costs exceeded the insurance premium, and there was no damage of the type described earlier. Apart from the toe rail dents and signs of repair on a bent pushpit, you would not think my boat had been used for charter.