insurance claim refused !

[mattysupra]

Hi, we have a issue. I'm not going to name the insurance company YET , i will tho if we don't get paid out what we are owed as i think it will effect most of you on here in the event of a claim. You can then decide if you want to re-insure with them in the future :

So the issue, we had a fire on the boat. Lucky we were on the boat when the fire started and we managed to cut the power and put the fire out.

How did the fire start? The boat, while moored, started one of the engines by itself. Stunned and looking at each other we tried to turn the engine off. But the ignition key/engine cut was not working ? The engine was sat ticking over. About 30 seconds or so later there was smoke poring out of the engine hatches, lifting the hatch filled the boat with smoke. The boat was evacuated and my dad stayed on board to try and turn the engine off, there was then flames coming up from the engine.

My Dad then went under the floor to get to the battery switches and killed the power but the engine was still running. He then re-entered the boat to now try and kill the engine again, he was spraying the engine with a fire extinguisher at the same time.

He tried to kill the engine again and this time it shut down.

SO Fire is out! We have a quick clean up its not to bad. It was the engines wiring loom (factory installed) that had set fire. There is no internal damage to the boat.

Damaged is -

Starter motor
Alternator
Wiring loom (engine)
Some electrical ecu for the engine

We get a marine mechanic to come quote on repairs.

The quote comes in at just over £5000. Well that's not so bad, it could of been well over 100k if my Dad hadn't risked his life to repeatedly extinguish the fire.

So we put claim in and the insurance have refused the claim!

They say its a 'Latent defect in the vessel' so not insured

So what are your thoughts about this? Does that mean none of you have insurance if there is a fault on board that causes the fire? after all its all factory fitted wiring, the boat is maintained by a marina , If you was to have a new fridge installed and a fault came and it set fire does that mean your not insured?


Comments please!

 

[Searush]

No expert of course, but it does sound like they are trying it on. That sort of response after such a traumatic event is really nasty.

Can they produce evidence of similar boats catching fire in similar way elsewhere - that would imply manufacturer liability (if still trading they could be sued).

WHAT DOES YOUR POLICY COVER? Would it cover if there was chafe to the wiring that caused this, or perhaps vermin damage to insulation? Do you know what they mean by Latent? There from when boat was bought or from when built? Are they suggesting it's the fault of a surveyor or the builder ot previous owner?

Is the mechanic from a big company that may have some contact with the assessor & possibly some leverage for discussion? If they think you won't pay for the repair, they stand to lose the business.

 

[bedouin]

First read every word of the policy.

My understanding is that latent defects are often excluded, but consequential loss is not. So while they may not have to pay for replacing the wiring (if that was faulty) they should pay for the damage caused by the fire.

If you are in the UK you should immediately write and complain, and make sure it is handled by their complaints team. If they still refuse to pay you can take it to the Ombudsman

 

[kid's inheritance]

FWIW, do a search on your particular boat model ( or post on here). That will identify if it is a latent fault but, as already said , even if the policy allows them to walk away , I can't see that winning them many customers
Rob

 

[nauticalnomad]

Hi, we have a issue. I'm not going to name the insurance company YET , i will tho if we don't get paid out what we are owed as i think it will effect most of you on here in the event of a claim. You can then decide if you want to re-insure with them in the future :

So the issue, we had a fire on the boat. Lucky we were on the boat when the fire started and we managed to cut the power and put the fire out.

How did the fire start? The boat, while moored, started one of the engines by itself. Stunned and looking at each other we tried to turn the engine off. But the ignition key/engine cut was not working ? The engine was sat ticking over. About 30 seconds or so later there was smoke poring out of the engine hatches, lifting the hatch filled the boat with smoke. The boat was evacuated and my dad stayed on board to try and turn the engine off, there was then flames coming up from the engine.

My Dad then went under the floor to get to the battery switches and killed the power but the engine was still running. He then re-entered the boat to now try and kill the engine again, he was spraying the engine with a fire extinguisher at the same time.

He tried to kill the engine again and this time it shut down.

SO Fire is out! We have a quick clean up its not to bad. It was the engines wiring loom (factory installed) that had set fire. There is no internal damage to the boat.

Damaged is -

Starter motor
Alternator
Wiring loom (engine)
Some electrical ecu for the engine

We get a marine mechanic to come quote on repairs.

The quote comes in at just over £5000. Well that's not so bad, it could of been well over 100k if my Dad hadn't risked his life to repeatedly extinguish the fire.

So we put claim in and the insurance have refused the claim!

They say its a 'Latent defect in the vessel' so not insured

So what are your thoughts about this? Does that mean none of you have insurance if there is a fault on board that causes the fire? after all its all factory fitted wiring, the boat is maintained by a marina , If you was to have a new fridge installed and a fault came and it set fire does that mean your not insured?


Comments please!

What brand of engine is it just out of interest.
Is it seperately wired or a new type which is pre wired with a pluggable loom etc

 

[Nautibusiness]

Latent Fault Clause

I insure my boat with Denovo Marine Underwriting based in Lymington.

My claim WAS paid out only because of the Latent Fault that was discovered.
It would not have been paid if the fault hadn't been discovered.

My circumstances:
Boat had run 379 hours.
30 miles out and something jars the prop and for a split second siezes everything.
Engine slammed into neutral, peer over the back, can't see anything, so gingerly try forward and reverse. All ok so continue on our way.
A very short while later, horrible grinding, banging noise, look in engine bay and oil everywhere.
Pan Pan
End up anchoing in 200 feet of water just north of the separation lanes and then pushing a rope behind a big orange boat into Weymouth.

Assessors investigation showed that our crank shaft had snapped. This is VERY unusual as shaft couplings etc are designed to fail first to prevent engine damage should you pick up something that locks your prop solid whilst underway.

This in itself didn't consitute a claim, but nobody could understand why the crank shaft had snapped until further investigation showed that one of the main bearing bolts had gradually worked loose over time and was now sitting with just one turn of the thread holding it in place and gently vibrating on the bottom of the sump. The loose bolt had in turn allowed just enough play in the crank shaft to cause fatigue to the metal which gave up when it was jammed up solid.

The latent fault in our case was the bolt working loose and the insurance company asked me to claim based on this fault and, apart from my excess and a fee for the fault itself they paid out for a new lump to be fitted to my boat.

Not sure of the exact definitiion, but the latent fault is essentially one that you could never be aware of through normal maintenance and servicing and which only shows itself after an unusual set of circumstances.

I would ask your insurance company to point out where in their terms does it say a latent fault is not covered as other insurance companies specifically offer cover for such events.

 

[Nautibusiness]

First read every word of the policy.

My understanding is that latent defects are often excluded, but consequential loss is not. So while they may not have to pay for replacing the wiring (if that was faulty) they should pay for the damage caused by the fire.

I think you have explained it a lot better than my own post.
Yes, they don't pay for the fault, but do pay to repair the mess made by it.

 

[Seahope]

I am surprised they are disputing such a small claim, however, as others have said read your policy wording carefully and don't give up at this initial setback. Stand your ground. I would not recommend threatening them with naming and shaming though I would keep that to yourself.

Sounds like a truly horrific experience glad no one was hurt and your Dad was very brave.

 

[mattysupra]

 

[Thepipdoc]

Out of curiousity, did the engine bay not have extinguishers fitted or did the heat not get so extreme that it set them off?

 

[mattysupra]

Out of curiousity, did the engine bay not have extinguishers fitted or did the heat not get so extreme that it set them off?

Yes, but we put the fire out before they was set off. I would say the damage would be very extensive before the remote ones discharge.

 

[MY littlebirchwoo]

Just a note on insurance companies at the moment. We insure with what must be one of the biggest marine insurers and last year had a claim refused where they have previously paid out. The realityt is that insurers are trying to wriggle out of even the most straight forward claim now and, like ourselves, Im sorry to say you will have an uphill battle, but do not let it just go as I have no doubt you will get recompence eventually!

 

[fergie_mac66]

Not had experience (happily) of anything like this . I have heard of car claims where the owner has had to sue a service station . The legal insurance paid the legal costs to get the service stations insurance to pay for the damage to the car as the service station was liable for the fault . marine legal cover is usually pushed when you take out boat insurance .

 

[petem]

You need to tell us precisely what the wording says in the policy.

 

[Piers]

Interesting start of a thread re insurance 'wriggle outs'.

I was told last year by a yard owner in the Channel Islands of a yacht which had sunk because a sea-cock failed. The insurance only paid a small percentage of the value stating the sea-cocks hadn't been serviced in accordance with the manufacturers' instructions. (can you remember the PBO (?) report on incorrectly manufactured sea-cocks?).

And now there's a marine insurer who won't cover boat to boat collision damage unless your boat is fitted with IMO compliant horns. I know I'm in the business for horns, but it just shows how much insurers are starting to insert 'wriggle out' clauses.

In my boat insurance, there were two clauses I didn't like.

1) I could only tow another boat if it was in 'imminent danger'. When I questioned this, I was told it was a MayDay situation. I responded that if I could have towed it before the MayDay situation arose, it would have been far safer for my boat as well as the other. I received a dispensation clause allowing me to do this.

2) My boat would only be covered against theft if it was in a 'locked' marina when I was not on board. I had to get a dispensation clause covering a marina that did not have locked access to the pontoons.

As the world of insurance looks more and more to 'wriggle out' clauses, all I can advise is to read your policy very carefully and check and double check the 'gotchas' and 'what ifs' and get written dispensation.

I wonder what other wriggle out clauses will soon start to appear?

 

[Jim@sea]

You need to get yourself a "Chartered Loss Assessor" They then argue with your Insurance Company's Loss Adjuster. Some Insurance Companies (who perhaps may be wealthier) appear to have a more relaxed attitude towards claims. I had a Tractor which caught fire. The cause was electric wiring in the cab roof which ignited the foam insulation. The Tractor was a write off. The Insurance Company paid out without any hesitation. The problem was caused by a "Latent Defect" aparrently this make of Tractor had a known incidence of this occurring, (according to the Tractor Dealer)

In your case I would take the view that the fault was caused by something outside your control. Its not as if you had been messing about with the wiring when you were installing a bilge pump or another VHF. What caused the problem was the boats original wiring loom and/or its ancillary fittings failing.
This is what is insured when you insure your boat.
So get a Professional on the job (Loss Assessor) and get stuck in.

 

[jfm]

You need to get yourself a "Chartered Loss Assessor"

You'll find loss assessors and the Institute of Public Loss Assessors (in the UK) but you won't find anything "chartered" because there's no royal charter. Scuse the snobbery but my point is that it's a mere trade club. I had a big insurance claim so hired the president of the institute, thinking he would be the best loss assessor in the land. He was ok, but needed a lot of hand holding to get things right. So if you hire one of these on anything other than a simple matter don't assume they have any qualifications and dont let them run the whole job else they might get out of their depth. All imho.

Back to OP: as others have said we need to see exactly what the policy clauses say. Latent defects and negligence of service personnel are often excluded, the logic being that the customer has recourse to another party and so shouldn't pursue the insurer. But the exact wording of the clauses varies among different insurers so you have to see the clauses to answer this one

 

[ProDave]

Just my thoughts on this:

The wiring loom failed and caught fire.

WHY did a fuse not blow? Something is not protected properly.

Did you, or anyone on the boat turn off the battery isolator switch? If you did and the loom continued to burn, something is wired wrong. If not, why not, that should be the first thing you do when you suspect an electrical issue.

A Diesel engine of course will run without power, so presumably you have to kill the fuel or activate a decompressor to stop it if the electrical controls are shot.

Re the claim, I wouldn't expect them to pay for the loom, but I would expect them to pay for the damage caused by the fire, and to be praising you for extinguishing the fire and preventing a total loss.

 

[henryf]

You'll find loss assessors and the Institute of Public Loss Assessors (in the UK) but you won't find anything "chartered" because there's no royal charter. Scuse the snobbery but my point is that it's a mere trade club. I had a big insurance claim so hired the president of the institute, thinking he would be the best loss assessor in the land. He was ok, but needed a lot of hand holding to get things right. So if you hire one of these on anything other than a simple matter don't assume they have any qualifications and dont let them run the whole job else they might get out of their depth. All imho.

Back to OP: as others have said we need to see exactly what the policy clauses say. Latent defects and negligence of service personnel are often excluded, the logic being that the customer has recourse to another party and so shouldn't pursue the insurer. But the exact wording of the clauses varies among different insurers so you have to see the clauses to answer this one

Aren't accountants "Royal" chartered? So there are professions which slip through the net

Are we actually sure what caused the fault? How old is the boat? Has anyone been in there fiddling, cleaning up contacts and so on?

Henry

 

[Philiz]

latent defect is basically an insurance legal term for an hidden flaw, weakness or imperfection which cannot be discovered by reasonable inspection.

For an insurer to repudiate a claim of the basis of latent defect is quite rare, and for them to do so they would need to determine exactly what the latent defect was. in this particular case I would suspect there was a fault within the wiring loom which shorted out the starter circuit causing the engine to start, the fire had therefore almose certainly already started before you were made aware of it, i.e. when the engine fired up on its own.

As previously said, you need to read the small print in the policy, but latent defect is usually a clause in ther somewhere. You must obtain the insurers precise reasons as to why they have repudiated this claim and get someone involved who knows what they're talking about.

IMHO if my assumption is correct as to the cause, the insurers should be responsible for the resultant damage, but not the cause, i.e. you would be responsible for the wiring loom. Good luck with this, if necessary, get the insurance ombudsman involved, insurers don't like that as it costs the money wether they're right or wrong.