Corrosion - Towergate Insurance

[GrahamM376]

Following comments on this thread - http://www.ybw.com/forums/showthread.php?378857-Insurance-claim - I have been having correspondence over the last couple of weeks with a not too helpful member of staff at Towergate trying to resolve the "Loss or Damage due to Corrosion" issue.

Having finally lost patience this morning, I sent a formal complaint letter and, in under an hour, was telephoned by their managing director. We had a friendly discussion and I was invited to submit some suggestions about wording. Following this, he had discussions with their underwriters and I have just received the following email, which satisfies me enough to stay with them:-



Graham

Below is a summary of Towergate’s official position on corrosion related problems. This statement has been signed off by the senior underwriter at RSA, our lead insurer.

Hopefully it clarifies our position until we can reword our policy to more accurately reflect our intentions of protecting the responsible owner.

Firstly it is always the intention of Towergate to treat all its customers fairly.

If an insured regularly maintains his craft and has taken reasonable precautions to regularly inspect areas of the craft that would be susceptible to corrosive action then:

· Towergate would not avoid claims that occurred as a result of the failure of a part due to corrosion that the owner of the vessel could not have reasonably been aware of.

· Under the current wording Towergate has paid claims for damage that has occurred as a result faults including corrosion that the policyholder could not have known about.

· Also under the current wording Towergate has paid claims for rigging failures due to crevice corrosion that could not have reasonable been detected during normal inspection.

However if an owner is aware of a defect in his craft (including defects due to corrosion) and takes little or no remedial action, or takes no action to inspect /regularly maintain the craft to prevent such an event occurring, I hope you will agree it would be unreasonable to expect Insurers to pay for damage that could have reasonably been avoided had some very basic care and due diligence been applied to protect the craft.

We are looking at ways we could re-define “Corrosion” that could embrace the sentiments above but this is proving very tricky to do – hence the interpretation. Many other Yacht Insurers in our market also exclude “Corrosion” in some form, as we do. This has been brought about by many poor experiences across the industry on primarily smaller craft that are not regularly maintained /inspected and have produced large losses that unfortunately the diligent owners eventually end up paying for through increased premiums to fund such avoidable losses.

We are happy for you to reproduce any of the above on any of the discussion groups. In the meantime, thank you for your suggestions which we will certainly take on board when looking at the revised wording.

Kind regards

Nigel

 

[sailorman]

Well thats a start, thanks.
could you pls make jfm on the MoBo forum aware

 

[GrahamM376]

Well thats a start, thanks.
could you pls make jfm on the MoBo forum aware

Have just duplicated the thread on MoBo forum as many of them don't read this one.

 

[Sidedrum]

My experience of RSA is such that I decided against insuring with Towergate earlier this year when I found RSA was their main underwriter. I went for a higher quote from Panteanius instead.

I recently moved my house insurance away from RSA, with whom I had held a policy for 10 years, because they imposed three exclusions on my policy following an enquiry (it never became a claim) which their appointed contractor had investigated inadequately and in breach of their own terms. One of the exclusions was entirely gratuitous - a specific exclusion on something which was a general exclusion in the policy anyway. My complaint about their whole handling of the matter was rejected out of hand and without their complaints team even bothering to contact me direct to find out why I was so unhappy. I then found out that the exclusions made it much harder to get quotes elsewhere.

I have however now obtained insurance at 20% less than I was paying RSA and with no exclusions despite my disclosure of the exclusions RSA imposed. (And why not - if the issues RSA rejected come to fruition my new insureres will claim against RSA!)

I suspect RSA are not particularly better or worse than many other insurers. They are however the only insurer I have deat with who have treated me as at best someone 'trying it on' which, given my record, was clearly not the case. As a result, I will not place any insurance with RSA and however good Towergate have been in response to the OP's issue I would still not insure through Towergate so long as RSA are their main underwriter.

I reckon the only way to improve the behaviour of insurers is to go elsewhere when they behave unacceptably. For me, RSA are an unacceptable insurer.

 

[GrahamM376]

I'm still progressing this with Towergate and, following more points I raised, have just received the following reply from their MD:-

Hi Graham

As you may appreciate the onset of the Christmas holidays has meant that it has been difficult to speak to the various people involved in changes to the policy wording, which need to be signed off by legal departments etc.

However I think is important not to single out RSA as most of the leading yacht insurers include in their policy wordings some kind of exclusion for damage to items by gradual deterioration / corrosion, although this is expressed in different ways.

In the mean time, our recent statement of intent applies to all of our policyholders, whenever they took out their policy.

We hope in the New Year to clarify our position to reflect the following:

1. It is not our intention to pay for the replacement of items / parts that have become unserviceable or broken because of gradual deterioration / corrosion.

2. It is our intention to pay claims which have resulted from a latent defect, including corrosion which cannot be discovered by a person of competent skill using ordinary care.

We wish to achieve a balance in providing cover for responsible owners who take care to maintain their craft, without them being penalised by increased premiums caused by claims from policy holders that allow their craft to deteriorate and potentially sink due to lack of maintenance and neglect. It is noted that one insurer imposes excludes sinking if the craft has been left unattended or un-inspected for 28 days.

Kind regards and Christmas greetings

 

[Pinnacle]

I'm still progressing this with Towergate and, following more points I raised, have just received the following reply from their MD:-

Hi Graham

As you may appreciate the onset of the Christmas holidays has meant that it has been difficult to speak to the various people involved in changes to the policy wording, which need to be signed off by legal departments etc.

However I think is important not to single out RSA as most of the leading yacht insurers include in their policy wordings some kind of exclusion for damage to items by gradual deterioration / corrosion, although this is expressed in different ways.

In the mean time, our recent statement of intent applies to all of our policyholders, whenever they took out their policy.

We hope in the New Year to clarify our position to reflect the following:

1. It is not our intention to pay for the replacement of items / parts that have become unserviceable or broken because of gradual deterioration / corrosion.

2. It is our intention to pay claims which have resulted from a latent defect, including corrosion which cannot be discovered by a person of competent skill using ordinary care.

We wish to achieve a balance in providing cover for responsible owners who take care to maintain their craft, without them being penalised by increased premiums caused by claims from policy holders that allow their craft to deteriorate and potentially sink due to lack of maintenance and neglect. It is noted that one insurer imposes excludes sinking if the craft has been left unattended or un-inspected for 28 days.

Kind regards and Christmas greetings

Might it be a good idea to draw this to the attention of the folks on the MoBo forum?

 

[GrahamM376]

Might it be a good idea to draw this to the attention of the folks on the MoBo forum?

It's posted there as well. Problem I'm finding is that every time they answer a question, it raises another. - a person of competent skill using ordinary care. Most of us are amateurs with no formal marine qualifications so, who is deemed competent in their eyes?

 

[Sidedrum]

I'm still progressing this with Towergate and, following more points I raised, have just received the following reply from their MD:-

.... However I think is important not to single out RSA ....

The OP only referenced Towergate.

I mentioned RSA (Royal Sun Alliance for the avoidance of any doubt) because I became aware earlier this year, in checking out a quote for boat insurance, that RSA were the main underwriters for yacht insurance from Towergate. My experience of RSA with house insurance is such that I won't take out any insurance underwritten by them.

In my experience RSA's interpretation of "responsible" is unlikely to include folk who have made only one claim in ten years, the value of which was a lot less than one year's premium. In other words, their interpretation may well be that the mere fact we sail (or own a house) makes us irresponsible and therefore not covered. And if they don't like being "singled out" then they should treat long standing, low claiming customers a sight better than they treated me.

 

[GrahamM376]

The OP has only referenced Towergate.

I mentioned RSA (Royal Sun Alliance for the avoidance of any doubt) because I became aware earlier this year, in checking out a quote for boat insurance, that RSA were the main underwriters for yacht insurance from Towergate. My experience of RSA with house insurance is such that I won't take out any insurance underwritten by them. In my experience RSA's interpretation of "responsible" is unlikely to include folk who in ten years have made only one claim, the value of which was less than one year's premium. In other words, their interpretation may well be that the mere fact we sail (or own a house) makes us irresponsible and therefore not covered.

I specifically referenced RSA in my dealings with Towergate, I thought that would be obvious from part of their reply, which you have quoted above - However I think is important not to single out RSA ....


You may have had bad experiences with household insurance with RSA but they paid me out very promptly both on household cover when we were burgled and on marine cover when I had a claim so, as long as I'm happy with their revised terms regarding the corrosion issue I'll stick with them. Others can do as they see fit.

 

[langstonelayabout]

Problem I'm finding is that every time they answer a question, it raises another. - a person of competent skill using ordinary care. Most of us are amateurs with no formal marine qualifications so, who is deemed competent in their eyes?

My surveyor said that my rigging should be inspected (and of course the insurance will want it so...) so I've had the mast taken down so I can check it over.

I've found it to be all good for 7 year old stainless standing rigging, I've had a damn good look and wiggle over the entire length and around the swaged fittings on every wire, but will the insurance company accept my word for it?

After all, my fairly specialist engineering qualifications aren't in marine materials, crevice corrosion or work hardening of rolled stainless wire...

 

[GrahamM376]

My surveyor said that my rigging should be inspected (and of course the insurance will want it so...) so I've had the mast taken down so I can check it over.

I've found it to be all good for 7 year old stainless standing rigging, I've had a damn good look and wiggle over the entire length and around the swaged fittings on every wire, but will the insurance company accept my word for it?

After all, my fairly specialist engineering qualifications aren't in marine materials, crevice corrosion or work hardening of rolled stainless wire...

My rig was said to be 2 years old when I bought the boat 10 years ago but no invoice seen. Had it inspected 4 years ago and have arranged for another check this winter. For 50 euoro (last time) it's worth the money to have a written report. Surveyor does it with climbing gear and a magnifying glass.

If you don't want to pay a surveyor or rigger, you could always take a dated photo of the wire entry into every swage.

 

[TradewindSailor]

I don't think photographs will be acceptable at all as there is no way of telling what part the photograph is of.

I also believe that damaged rigging fittings that show an external crack with surface corrosion can be used by the insurer's loss adjuster to argue that the rigging was poorly maintained; even though those cracks can be very difficult to see, particularly when the rigging is in place. Consider a crack through the shoulder of double toggle: the remaining good shoulder will be supporting the rigging until failure, allowing the crack to remain closed but open enough for corrosion.

Insurers should make it very clear how often they require the rigging to be inspected by a professional rigger/surveyor. If it fails between professional inspections the onus should be on the insurer to prove that the owner should have been aware ...... in which case the owner would need an expert witness to counter their arguments.

Unfortunately if the insurer wants to argue their liability, they can .... and it could prove to be very expensive and time consuming to take it to arbitration or court.

 

[GrahamM376]

.........Insurers should make it very clear how often they require the rigging to be inspected by a professional rigger/surveyor. If it fails between professional inspections the onus should be on the insurer to prove that the owner should have been aware ...... in which case the owner would need an expert witness to counter their arguments.

I am still waiting for a reply to this part of my last letter to Towergate:-

........We still see a "grey" area - "If an insured regularly maintains his craft and has taken reasonable precautions to regularly inspect areas of the craft that would be susceptible to corrosive action".

.......what in your view constitute "reasonable precautions" and timescale to "regularly inspect" the various potential problem areas of the boat? Do you expect rigs to be professionally inspected at regular (again what's regular?) periods?

I think it's obvious from Towergate's willingness to discuss the policy wording with me and agree to update certain parts that they've had other policyholders contacting them and don't want to lose business. We need to get through to insurers just what cover we want, not necessarily their current standard offerings and, if we don't get it then we'll shop around until we do. Problem is, I've yet to find a policy without some clause or other I don't like.

 

[TradewindSailor]

IMO reasonable precautions would be to have the boat/rig professionally surveyed/inspected as specifically defined by the insurers and to inspect your boat from deck level and below before a voyage, during a long voyage, and after the voyage. To you should also inspect your rig or have someone inspect it at least every 3 months and after every hard sail.

The logic is that you would have intimate knowledge of the workings of your boat.

However, the problem is how is this formally demonstrate to the insurers. Obviously survey/inspection reports would be copied to them. Receipts would help to indicate the level of maintenance. But when there is a claim the insurer may send an assessor. If the assessor considers that the boat is run down and has evidence of clear faults other than that of the one that generated the claim, you would have great difficulty in proving that you had not been negligent and hence at least partly responsible for the damage.

A repair log is very useful. Note the faults and the repairs.

 

[GrahamM376]

IMO reasonable precautions would be to have the boat/rig professionally surveyed/inspected as specifically defined by the insurers and to inspect your boat from deck level and below before a voyage, during a long voyage, and after the voyage. To you should also inspect your rig or have someone inspect it at least every 3 months and after every hard sail.

Here's where you and I would disagree. If insurers came back with the statement in your first paragraph then I would certainly be shopping around. Whilst such an inspection regime may be appropriate for a large racing boat, out in all conditions, it's way over the top for the average day sailor. More time would be spent inspecting than sailing. There has to be a reasonable approach to this by both sides.

Talking to Towergate, their concern is how to word policies so the responsible majority are covered but not to open the door to the minority who don't maintain or inspect their boats and would be able to claim when it sinks in a quiet corner of the marina or canal basin. In the long term, insurers don't bear the cost - we do by paying increased premiums.

 

[sailorman]

The one good thing about all these & those post on the MoBo forum, is that insurers seem to be taking the comments on board & responding to our ( boaters ) concerns

 

[TradewindSailor]

I think perhaps you misunderstand the nature of a pre-sail, post-sail, in-sail inspection. It should take no more than 15 minutes and is the sort of inspection that any master should carry out. I am not expecting parts to be removed or NDT.

Because you should be familiar with you vessel you should be able to walk around your boat to see if there is anything untoward such as chafe, water in the bilges, damaged/missing split pins, cracked gear, engine oil condition, corrosion products, battery charge etc.. in very little time. Monthly inspections of battery acid (if applicable), loose engine bolts, etc, etc.

Your familiarity with your boat should warn you any strange noises and cracks, and how they progress. Surveyors would have to take time and carry out a close inspection because they have no intimate knowledge of your boat.

 

[Tomahawk]

A note of interest…

Someone in Towergate does read this Forum… I know because we has a bit of an issue with them and posted a comment. The issue was resolved the same day

 

[sailorman]

A note of interest…

Someone in Towergate does read this Forum… I know because we has a bit of an issue with them and posted a comment. The issue was resolved the same day

I bet your not the last either if he reads the MoBo forum as well :encouragement:

 

[GrahamM376]

A note of interest…

Someone in Towergate does read this Forum… I know because we has a bit of an issue with them and posted a comment. The issue was resolved the same day

I know from my conversation and emails with them they're taking the issue seriously and I hope other insurers are as well as they also have some unacceptable exclusions. Problem I have is that I'm not an expert and only putting forward my own point of view. Others may disagree with my suggestions and have their own ideas and if that's the case, please put them forward either here or directly to Towergate, we need cover and wording which (hopefully) satisfies us all.