Corrosion - Towergate Insurance

[jfm]

if you're insured with Towergate.

I had to ROTFL at that part Graham

The new wording does half the job, but ham-fistedly or deliberately fails to do the other half.

The half it does is that it limits the exclusion only to corrosion (etc) that the boat owner should have noticed. Insurance isn't denied if the corrosion etc is hard to spot. That's helpful, but is merely half the story. Also, the legal drafting is very poor indeed, but you can just about make out that the draftsman is trying to get at

The half it fails to do is that it fails to provide expressly that consequential damage is always covered. If for example a £50 mast fitting fails and the mast falls down costing £20,000, the wording of the policy does not provide for a £19,950 payout. The Pantaenius policy, in contrast, does.

Until Towergate at least get this right people should avoid the policy imho. Especially in view of the track record I'm aware of (two large cases involving ybw forum members) where Towergate refused to pay and only after considerable effort to show them the error of their ways did they eventually pay out in full (the long running sailing boat case was finally resolved with full pay-out last week, as you may know). All imho of course

 

[GrahamM376]

The half it fails to do is that it fails to provide expressly that consequential damage is always covered. If for example a £50 mast fitting fails and the mast falls down costing £20,000, the wording of the policy does not provide for a £19,950 payout. The Pantaenius policy, in contrast, does.

Thanks for your comments, I'll pass them on to Towergate. This is an extract from one of the emails I had from them which appears to cover consequential damage but, it's not been included in the new terms - unless it's elsewhere in the policy document which I don't have.

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.


Addition - see post 16 above. Clear statement that consequential damage is covered.

 

[jfm]

Sure, the consequential loss point is covered in his emails to you which are then put on this forum. The contractual basis is however at best shaky, and I'm saying the point should be expressly covered in the policy doc. Towergate are doing themselves no favours by not just putting the clause in the policy doc, especially as your recent post shows they've just gone to the trouble of re-writing the clause anyway.

IMHO, they are not staffed up by the sharpest tools in any box generally and both big fights I've had with them have been won 100% by the policyholder but not without very considerable effort in, frankly, overcoming their inability to understand contracts and law. So they're definitely not on any "recommended" list of mine. If they re-wrote this clause properly they'd start to make amends, in my book

 

[GrahamM376]

Sure, the consequential loss point is covered in his emails to you which are then put on this forum. The contractual basis is however at best shaky, and I'm saying the point should be expressly covered in the policy doc. Towergate are doing themselves no favours by not just putting the clause in the policy doc, especially as your recent post shows they've just gone to the trouble of re-writing the clause anyway.

IMHO, they are not staffed up by the sharpest tools in any box generally and both big fights I've had with them have been won 100% by the policyholder but not without very considerable effort in, frankly, overcoming their inability to understand contracts and law. So they're definitely not on any "recommended" list of mine. If they re-wrote this clause properly they'd start to make amends, in my book

I think you are being a bit unfair and need to read the policy again as the point you make is covered. At least they're willing to make changes whereas other insurers still won't cover corrosion and, unlike Pantaenius, they don't require the boat to be inspected monthly to stay within cover.

Page 16.
You can claim for:
accidental damage caused by faults:
- that you could not know about, or
- caused by a fault in the design of your boat or the way that it was made.

This covers the consequential damage due to failure of a part you didn't know was defective and they also cover latent defects, which isn't a requirement under the Marine Insurance Act.

 

[jfm]

I think you are being a bit unfair and need to read the policy again as the point you make is covered. At least they're willing to make changes whereas other insurers still won't cover corrosion and, unlike Pantaenius, they don't require the boat to be inspected monthly to stay within cover.

Page 16.
You can claim for:
accidental damage caused by faults:
- that you could not know about, or
- caused by a fault in the design of your boat or the way that it was made.

This covers the consequential damage due to failure of a part you didn't know was defective and they also cover latent defects, which isn't a requirement under the Marine Insurance Act.

Graham, respectfully I don't agree. What you post in #24 are inclusions in the policy, ie things you can claim for. What you posted in #20 are exclusions. Generally, exclusions trump inclusions. You should never read the inclusions and think "Ah, I'm covered"; you MUST read the exclusions as well because they invariably operate to reduce the cover that the inclusions provide

The exclusions you post in #20 do suffer from what I criticised them for, namely that in the case of corrosion of a type you should have noticed you have no insurance cover for the consequences of the corrosion, whereas with Pantaenius you do. In other words, if a £50 mast fitting fails and the mast comes down causing a £20,000 loss, the insurer merely has to conclude that you should have spotted the corrosion and the payout becomes £zero not the £19,950 Pantaenius would pay.

Sure, if the mast fitting is 100 years old and covered in rust they would morally have a point but in real life the difference between corrosion you ought to have known about and corrosion you didn't ought to know about is going to be a huge grey area, upon which (in my example) £19,950 hangs. That huge chunk of greyness benefits the insurer not the policyholder, and as I keep reminding people the boat owner is the plaintiff so has the onus of proof.

So imho this Towergate policy just doesn't cut enough mustard. Credit to them for bothering to re-write it and try to deal with the issue, but not much credit to them for what they've actually delivered with this wording. If they really do want to offer the same cover as Pantaenius then the drafting isn't difficult to do, but they've not done that. Deliberately I guess.

And I do need to remind you of Towergate's record so far as I know it in accepting claims. In the two big forum member losses I'm aware of in the last 2 years, there is nothing to make you love Towergate. Sure they paid out in full in the end, but not without quite a fight (and much worry to the policyholders in the meantime). My experience of their attitude to conceding large claims gives them, purely in my opinion of course, about a 1 out of 10 score and I positively do not recommend them to anyone.

 

[GrahamM376]

Graham, respectfully I don't agree. What you post in #24 are inclusions in the policy, ie things you can claim for. What you posted in #20 are exclusions. Generally, exclusions trump inclusions. You should never read the inclusions and think "Ah, I'm covered"; you MUST read the exclusions as well because they invariably operate to reduce the cover that the inclusions provide

The exclusions you post in #20 do suffer from what I criticised them for, namely that in the case of corrosion of a type you should have noticed you have no insurance cover for the consequences of the corrosion, whereas with Pantaenius you do. In other words, if a £50 mast fitting fails and the mast comes down causing a £20,000 loss, the insurer merely has to conclude that you should have spotted the corrosion and the payout becomes £zero not the £19,950 Pantaenius would pay.

Whilst not doubting your information, I find it very strange that Pantaenius will pay out where the owner is negligent. Personally, I don't think it unreasonable that an insurer should refuse to pay out where damage or loss happens because "there's corrosion of a type you should have noticed". In not seeing something obvious there's a lack of due diligence in not inspecting or maintaining the boat properly. If they don't draw the line somewhere, then our premiums would rocket.

 

[jfm]

Whilst not doubting your information, I find it very strange that Pantaenius will pay out where the owner is negligent. Personally, I don't think it unreasonable that an insurer should refuse to pay out where damage or loss happens because "there's corrosion of a type you should have noticed". In not seeing something obvious there's a lack of due diligence in not inspecting or maintaining the boat properly. If they don't draw the line somewhere, then our premiums would rocket.

I don't agree that at all. I believe you are fundamentally misunderstanding an insurance contract. Insurers insure all the time against human negligence. If I lose concentration and fail to see your brakelights and smash into the back of your car, I'm clearly negligent. I should have paid more attention. But I didn't. My insurers pay, because that is what our contract provides. There is no question about whether they should or ought to pay; the contract provides that they must.

Likewise there is no test of "reasonable" here. What we are debating in the these threads is simply the terms of contracts, and we are not applying any test of "reasonableness" or by implication any kind of rule like "the insurer ought not to pay that because well really that's the boat owner's fault". Owning a boat exposes you to risks and all I'm saying is that Pantaenius will for a sensible premium allow you to transfer this particular risk to them while other insurers wont. Whether or not you think an insurer ought to bear that risks is an entirely different point and not one I'm commenting at all here, because I frankly don't care. If I'm in Tesco I don't care whether they "ought" to sell me that loaf of bread. I just enter into a contract with them under which they give me the bread. Or I don't enter into that contract. But either way there is no "should" or "ought" or "reasonable" type of test; entering into the contract is a voluntary act by both sides.

So what I'm saying is that the Pantaenius contract provides they will pay the £19,950 in my example, whereas the Towergate contract provides they would only pay if the corrosion is an undiscoverable type. That's all. At that point, you pays your money and makes your choice

There is no evidence at all for your claim that premiums will skyrocket. No policy holder generally profits from insurance. The £20k in my example merely pays the repair bill, so at the end of the day the boat owner simply has a working boat and no cash in his pocket, which is exactly where he was before the corroded fitting made his mast come down. What the evidence does show is that premiums rise according to the amount of transferred risk, and therefore it is logical that premiums will rise a bit because AOTBE if Pantaenius accept risk of corrosion that a boat owner could have spotted and Towergate don't, then Pantaenius's premium will be commensurately higher. That's perfectly fine and people can make that choice when buying insurance.

Problem is, and this is what much of this discussion highlights, people often do not make that choice consciously. They think they have cover against all the usual risks associated with owning a boat then suffer a loss and discover the insurer won't pay and/or the risk isn't covered by the policy.

 

[Harry25]

I have to say jfm that forum members on here should be very grateful that we have such a learned person who is prepared to give his time on helping fellow boat members. Personally I thought when this subject came up in October I would change to Pantaenius when my policy was up for renewal. This I have now done, and in my case the premium cost was only £50 more.

 

[sailorman]

I have to say jfm that forum members on here should be very grateful that we have such a learned person who is prepared to give his time on helping fellow boat members. Personally I thought when this subject came up in October I would change to Pantaenius when my policy was up for renewal. This I have now done, and in my case the premium cost was only £50 more.

Here Here to that sentiment, jfm is an all round good egg :encouragement:

 

[Deleted User YDKXO]

I would do what the OP did and state to Bluefin/Bishop Skinner that you wish to make a formal complaint. Bluefin/Bishop Skinner are obliged to comply with the TCF regulations, you can take your pick over the one that they are not adhering to...

Just to put the other side of the coin, I've insured with Bishop Skinner (Navigators & General) for more years than I care to remember and have always found Bill Southgate to be helpful and efficient. Some years ago, I made a claim which, without going into too much detail, also involved a corrosion issue which was settled promptly and fairly. I can only speak how I find but on the basis of that, I've stuck with them

 

[jfm]

Just to put the other side of the coin, I've insured with Bishop Skinner (Navigators & General) for more years than I care to remember and have always found Bill Southgate to be helpful and efficient. Some years ago, I made a claim which, without going into too much detail, also involved a corrosion issue which was settled promptly and fairly. I can only speak how I find but on the basis of that, I've stuck with them

I too speak as I find Deleted User. In Seahope's case, it was Bill himself who wrote the letter/email refusing to pay. And just to be clear: Bill's position was that the seacock corroded, so the whole claim was refused, under the terms of the policy (on which point in isolation he was right, btw). He was not saying the insurers would pay for the boat apart from the £50 cost of the seacock.

Thus Seahope had a sunken boat, no insurance money and his boat mortgage bank then demanded full repayment of the loan - quite a worrying time. In due course, Bishop Skinner were shown to be wrong and the insurers paid out, but that took some smart boxing from the policyholder's side that others might not have access to.

I'm not saying Bill is a bad guy. Not at all. But remember Bishop Skinner are often (I believe) a broker or claims handling agent and the ultimate pay/refuse decision might be with the insurance co not BS, so the niceness/fairness of Bill might not save the day even if he sympathises with your side of the argument.

All I'm really saying is that the insurance policies of this type provide materially worse cover than the Pantaenius policy on this consequential losses/corrosion issue, and FWIW I would not, as you apparently do, consider that difference in contracts to be compensated for by the fact there is a nice/fair guy at the broker or claims handling agent. He wont personally be paying for a ferretti 630 when it's 10m underwater; only the insurance company will do that, I hope.

 

[Nigelpickin]

It's difficult to argue the case against the merits/advantages of the Pantaenius policy, especially for me as I have recently discovered that my boat might disintegrate at any moment

In all seriousness, I am grateful for the opinion and advice relating to this matter...I didn't/wouldn't buy a policy based on price but I have certainly taken recommendation, implied or otherwise, from a broker. I will not be quite so naive in the future. Many thanks.

 

[Deleted User YDKXO]

I'm not saying Bill is a bad guy. Not at all. But remember Bishop Skinner are often (I believe) a broker or claims handling agent and the ultimate pay/refuse decision might be with the insurance co not BS, so the niceness/fairness of Bill might not save the day even if he sympathises with your side of the argument.

Bishop Skinner is definitely a broker; thats why I put Navigators and General in brackets 'coz thats my actual insurer

All I'm really saying is that the insurance policies of this type provide materially worse cover than the Pantaenius policy on this consequential losses/corrosion issue, and FWIW I would not, as you apparently do, consider that difference in contracts to be compensated for by the fact there is a nice/fair guy at the broker or claims handling agent. He wont personally be paying for a ferretti 630 when it's 10m underwater; only the insurance company will do that, I hope.

When you say 'this type', you need to be more explicit. Was Seahope insured with N & G or somebody else? I didn't really want to spend the time relating my story but I will to give the opposite view. I have to say that this was some years ago when I was boating in the UK but I was half way across the Channel when one engine fell off its mountings, due as it turned out, to corroded engine mounting bolts which I'd never noticed (thanks Volvo). Also as it turned out 3 out of the 4 bolts for the other engine were also corroded clean through. To cut a long story short, we very carefully limped back to the Hamble on one engine and were lifted out. Clear case of my negligence I thought at the time but N & G paid out in full to repair the damage to the propshaft and gearbox on one side and remount both engines, no questions asked about why I hadn't inspected the engine mounts regularly (I do now!).
Now maybe N&G's terms have changed over the years or they're much tougher with claims but I was one very happy punter at the time and Bill played a big part in managing my claim and getting it through.

 

[jfm]

When you say 'this type', you need to be more explicit. Was Seahope insured with N & G or somebody else?

I mean insurance policies that exclude cover for corrosion AND which do not limit that exclusion to just the corroded item. In other words if a 100k boat sinks because a £50 seacock corroded, I'm talking about policies whose terms say they pay out nothing, as opposed to paying out £99,950

Seahope's policy was underwritten by Axa, RSA and one other, and I think it was sold by BS and branded a BS product but I'm not 100% sure so will check on office PC tomorrow. Was definitely not N+G

 

[Talulah]

Just a quick note to say that as a result of these discussions over the last couple of months we did not renew this week with RSA and have gone with 'Y'.
Many thanks go to JFM who has highlighted a number of issues with policy wording. Whilst insurers like RSA may have the best of intentions it needs to be reflected in their policy wording.

 

[jfm]

insurers like RSA may have the best of intentions ...

My house burnt down while I was on holiday a few years ago and when I made a large claim (about £1.5m) on RSA they only had one intention and that was not to pay. They tried everything. Forensic investigators, the world's biggest loss adjuster firm, everything. It took about 18 months. They still lost and had to pay in full, mind you