BobnLesley
Well-known member
I recall from our time sailing in the USA & Caribbean that Great Lakes Insurance were not well regarded amongst North American yotties
Insurance refusal to pay out
- Thread starter vyv_cox
- Start date
Stemar
Well-known member
Wow, I know insurers aren't on our side, but...
Reason No 253 why I'm glad I don't live in the US.
Reason No 253 why I'm glad I don't live in the US.
coopec
N/A
You say "Our Marine Safety authority" Is that the Australian "Marine Safety Authority"?
Tranona
Well-known member
It is not the insurer's "fault" but the legal environment in the US. A clear example of being aware of the consequences of clauses in the contract which in this case reduce the value of the insurance cover compared with a contract that does not have that clause.
The underlying issue of different laws in different parts of the same country is also relevant here in the UK with devolution of many aspects of the law to the constituent countries. Think abortion law in Northern Ireland, or more topically the Gender Identification law proposed in Scotland. It is not surprising that the UK govt is attempting to stop it as independent of the merits of the actual legislation it potentially creates the type of situation that the US Supreme court will have to deal with. So far the UK has managed the internal differences in law across the country quite well as most of the differences are not controversial.
Bouba
Well-known member
While I agree with what you say about the UK...the German insurer is guilty of jurisdiction shopping to the detriment of it’s customers, many of whom are probably unaware of the consequences until its too late....the fact that they have ‘saved’ a billion dollars in payouts just shows how cynical they are
Bouba
Well-known member
In fact there are similar problems in the UK...an English rent protector refused a payout to me once...I threatened to go to the financial ombudsman (or whatever it is called) and they said no problem and referred me to his Malta office....the small print on jurisdiction can get you every time
Tranona
Well-known member
But that is what I said. They are not "guilty" as it is perfectly legal as the law stands in the US to do this provided it is in the contract. All contracts state the jurisdiction - as I pointed out earlier that is why contracts under UK law are attractive for many.
What this case shows is the negative consequences of agreeing to a contract with that clause. The only reason for the insurer to include it is to minimise the number of claims it has to pay out so enabling it to reduce its premiums. Classic example of you get what you pay for. I expect that if the Supreme court does rule the clause illegal there will be an outcry from some about the anti consumer implications of forcing premiums up!
Bouba
Well-known member
I meant that they are guilty of using a loophole against their customers even if it is legal to do so....unethical doesn’t even begin to cover their business model....the customer, if they had the inside knowledge, could have found an insurance company that would have covered them
Tranona
Well-known member
They don't need "inside knowledge". Just need to read the contract and look at the consequences of that clause. I guess they did not and bought on price. You discovered similar downsides to your protection policy being under Maltese law..
So Great Lakes has done nothing wrong and it is not a loophole. I am sure that other low cost insurers use the same clause in the US, and others don't meaning they are offering better cover and charging higher prices. It is up to the court to decide if allowing this choice is legal and fair.
So Great Lakes has done nothing wrong and it is not a loophole. I am sure that other low cost insurers use the same clause in the US, and others don't meaning they are offering better cover and charging higher prices. It is up to the court to decide if allowing this choice is legal and fair.
Bouba
Well-known member
Reading and understanding the consequences aren’t the same thing
ylop
Well-known member
If it was a consumer contract a Scottish or English court would likely have overruled and allowed the consumer to choose the jurisdiction local to them.
Since we are discussing jurisdiction it’s probably worth pointing out there is no such thing as U.K. Law or U.K. court, the law and courts are different in England and Scotland, and a clause which refers to U.K. Law or U.K. court may be unenforceable because of such ambiguity.
Generally in the U.K., courts don’t expect consumers to understand the nuance of the law and so won’t stand for sneakiness.
I think it is a loophole. Unless it said in very clear writing “we will not pay any claims if your safety equipment is out of date, even if that equipment had no bearing on the cause of your claim”. I think there IS an argument that policies could/should be cheaper for people who maintain their boats and safety kit in good order - it’s a sign of a responsible skipper but I think if that’s the basis for your “discount” a good policy would expressly state this.
Tranona
Well-known member
Read the original article. That is exactly what the case is about. There is one state that has case law which supports the insurer and the other which would not. It has become a test of public policy and why it has gone to the Supreme Court. It is not really about whether insurance should be cheaper for boaters who maintain their boat properly. The insurer is claiming that its policy required the fire extinguishers to be up to date and therefore if not the insured had not complied with the terms of the contract which became void. Further it has the choice clause which allows it it deal with the claim under a state law that would support that view. The boater agreed to the contract and the insurer is exercising its right (as it sees it). so it is not a "loophole".
Hopefully the Supreme Court will clarify the issue
ylop
Well-known member
I’ve read the original article. I understand exactly what the case is about. It’s about whether the insurer can apply the law of New York which favours the interpretation of the clause for the insurer or should use the law of Philadelphia which tends to close the loophole in favour of the insured. I’m not sure why you think calling it a loophole is wrong - it’s a quirk of the law or wording of the contract which almost certainly the insured did not understand at the point of entering the contract. For consumers entering standard contracts understanding the nuance of different states attitude to insurance contracts is not something they should have to do. In the U.K. we would never allow an insurer (or any other corporate) to impose a jurisdiction in their favour nor expressly highlight bits of contract that might be “nasty”. The bit where that might fall down in the U.K. is this sounds like it was not technically a consumer contract - the insured was a company, and we generally assume here that companies are smarter at negotiating contracts and understanding contract law. Your counter argument seems to be that he bought cheap insurance so should have known it would be hard to get a payout. Bouba’s point is that by having offered insurance they’ve stopped the insured from seeking other cover and so left the insured more exposed than if the policy was not on the market. It’s possible that the insurer has in big bold red capital letters “if you do not maintain your fire extinguishers any claim (even if it’s not for fire damage) will be refused” but it’s much more likely some far less obvious escape clause.
Tranona
Well-known member
There is a difference between what should be fair and the reality of what the legal position is. The insurer is arguing that he is within his rights to use the law as it is rather than how one might like it to be. There is nothing currently illegal (as far as I can see) about what he is doing which is way I do not think loophole is the right word. That is he has not found some new and unique way of avoiding paying out but just using the the current law to his advantage, It is up to the Supreme court to determine whether this is acceptable which will mean primarily barring the use of choice clauses in insurance contracts. That on its own may not force individual states to change their laws about for example the secondary issue of whether a breach of terms that is unrelated to the claim is a valid reason for rejecting the claim as happened in this case.
Bouba
Well-known member
It would be nice if the boat owner won the case...and all the others who were denied could refile their claim
Refueler
Well-known member
I love this ....
As a person who has experienced Insurance Refusal in UK - I can say that some posts are not correct.
Event summary : Note Insurance Broker Newtin Crum is the 'old previous' Brokers that closed.
My Snapdragon 23 was broken into at Farlington Yard in Langstone. Forehatch forced, interior cabin door broken out from its frame. Sails - Fishingh gear and various loose items stolen.
Newton Crum Brokers agreed settlement for Boat items. Household Contents Insurance replaced fishing items.
Few months later - forestay pulled out of stem, outboard was swamped by breaking waves ... boat towed into Bembridge Hbr.
I agreed boat to be lifted into Coombes Yard pending Insurance Claim.
Newton Crum without informing me - appointed a Surveyor to inspect the boat. I then received a Letter detailing their refusal to accept claim and requirements to return all 'previous claim' funds.
Newton Crum refused to let me see the report.
I easily found out who Surveyor was - and contacted him. He was open about his instructions from Newton Crum that were specific to investigate FIRST claim for theft. He was also told to not contact me.
I received a short version of main points in his report verbally. He had basically written that as far as he could determine - the boat had not had hanked on sails. What he did not know was the claim settlement was actually to FIT a Profurl system instead of replacing the numerous hanked sails that had been stolen.
On receiving this information - I contacted Newton Crum to explain such conduct. Note at this time - I still had an active Yacht and Commercial Survey business in UK.
Newton Crum refused to discuss and referred me direct to Underwriter.
Underwriters always create a 'wall' between themselves and 'clients' and communication is by email or even fax ... they will not accept telephone contact.
The written communication went on for about 3 months ... and finally agreement was made for Underwriter to pay out as Total Loss - at 50% market value (sufficient to cover yard fees - repairs) and I to keep the boat.
Newton Crum not long after closed up business.
Later I noted Newton Crum name returned to the Insurance Broker market - but I assume different people .. so please do not connect the two entities.
The point of my post - Insurance WILL default you out if they can. Its why there are Loss Adjustors and Loss Assessors.
As a person who has experienced Insurance Refusal in UK - I can say that some posts are not correct.
Event summary : Note Insurance Broker Newtin Crum is the 'old previous' Brokers that closed.
My Snapdragon 23 was broken into at Farlington Yard in Langstone. Forehatch forced, interior cabin door broken out from its frame. Sails - Fishingh gear and various loose items stolen.
Newton Crum Brokers agreed settlement for Boat items. Household Contents Insurance replaced fishing items.
Few months later - forestay pulled out of stem, outboard was swamped by breaking waves ... boat towed into Bembridge Hbr.
I agreed boat to be lifted into Coombes Yard pending Insurance Claim.
Newton Crum without informing me - appointed a Surveyor to inspect the boat. I then received a Letter detailing their refusal to accept claim and requirements to return all 'previous claim' funds.
Newton Crum refused to let me see the report.
I easily found out who Surveyor was - and contacted him. He was open about his instructions from Newton Crum that were specific to investigate FIRST claim for theft. He was also told to not contact me.
I received a short version of main points in his report verbally. He had basically written that as far as he could determine - the boat had not had hanked on sails. What he did not know was the claim settlement was actually to FIT a Profurl system instead of replacing the numerous hanked sails that had been stolen.
On receiving this information - I contacted Newton Crum to explain such conduct. Note at this time - I still had an active Yacht and Commercial Survey business in UK.
Newton Crum refused to discuss and referred me direct to Underwriter.
Underwriters always create a 'wall' between themselves and 'clients' and communication is by email or even fax ... they will not accept telephone contact.
The written communication went on for about 3 months ... and finally agreement was made for Underwriter to pay out as Total Loss - at 50% market value (sufficient to cover yard fees - repairs) and I to keep the boat.
Newton Crum not long after closed up business.
Later I noted Newton Crum name returned to the Insurance Broker market - but I assume different people .. so please do not connect the two entities.
The point of my post - Insurance WILL default you out if they can. Its why there are Loss Adjustors and Loss Assessors.
Bouba
Well-known member
Absolutely...insurance companies are scum...the only worse thing that they do is to actually pay out...and then you find that your premiums have gone up so much that in three years you have completely paid them back and from then on they are making huge profit... and whenever you need insurance for no matter what...they ask for your complete claims history..so you end up paying for it all over again. Scum
Tranona
Well-known member
My dealings with insurers has been limited from the claims point of view. Only 2 on the boat in 40 years, 2 on household and 2 on cars (plus another 2 with other drivers insurance). All satisfactory except one household which was a bit of a struggle because the drain that collapsed under my property was shared with 7 others.
Latest claim was last year when a door stored in a rack in my garage fell onto the bonnet of my Morgan. My fault because I had disturbed it getting another piece of wood out of the rack. Insurer (Admiral) paid up without any quibble, but as a settlement rather than taking responsibility for the repairs. Quite happy with that. I have been with them for about 5 years with all 3 cars at low premiums because of our good claim record, low usage and secure parking. NCD protection part of the policy.
Renewal came yesterday. Nearly doubled, even though NCD intact. They clearly don't want me. Only took about an hour on line to find a new insurer at very little more than last year's premium for slightly better cover.
Competitive business
Latest claim was last year when a door stored in a rack in my garage fell onto the bonnet of my Morgan. My fault because I had disturbed it getting another piece of wood out of the rack. Insurer (Admiral) paid up without any quibble, but as a settlement rather than taking responsibility for the repairs. Quite happy with that. I have been with them for about 5 years with all 3 cars at low premiums because of our good claim record, low usage and secure parking. NCD protection part of the policy.
Renewal came yesterday. Nearly doubled, even though NCD intact. They clearly don't want me. Only took about an hour on line to find a new insurer at very little more than last year's premium for slightly better cover.
Competitive business
Refueler
Well-known member
I know this from dealing with Brokers and Underwriters ....
The UK is a strange market - where for many years clients have followed the 'loyalty' path ... basically renewing existing when asked without chedcking competitor quotes. That started to change as Internet and peoples understanding evolved.
Example : My Mother received renewal for Buildings Insurance (Pru) ... which doubled the premium. I was visiting her at the time and was stunned by it. My Mother was ready to write the cheque. She was sure that 'loyalty' counted and never questioned it.
I managed to get her to hold off and let me talk to other Brokers.
Pru meanwhile pressed for her to renew - even though policy still had time to run. Their excuse for such increased premium being 'Clay soil' and possible subsidence etc.
I took my Mother to a broker I used and Stuart gave her a quote LESS than her previous years premium AND with increased cover ...
Of course Pru were not happy and tried weazly excuses and offers ....
You only have to watch UK TV and see Insurance adverts - because the old generation who judged loyalty highly were now wiser and younger generation were not so gullible. With transfers of NCB as well .... its done deal to shop around.
Do not also forget - you do not have to stay with UK based Broker .... I swapped to German Broker and gained significant savings and increased coverage. They covered UK and many other jurisdictions with greater geographic range etc.
AntarcticPilot
Well-known member
I usually deal with insurance through a broker; the broker has the obligation to a) find insurance that matches my statement of needs and b) is a good deal for me within the panel of insurers the broker deals with. I've almost never paid more than a cost-of-living sized increase in my premiums, except when there has been a change in circumstances. In the event of a claim, the broker will act on my behalf, or refer me to a legal specialist (I pay a small additional premium for legal representation; it has come in handy on occasion such as when my wife's car was damaged by a lorry at her place of work)
There is an element of loyalty with the broker, but none to insurers! And the brokers I use partly originated with the local man from the Prudential whose children I taught in Sunday School, and who then set up in business as an independent broker. Through mergers and takeovers, the connection is now pretty tenuous, but I do get consideration from my long association with the broker; if I ring them and ask why there's an increase in premium, they'll often find out a way to reduce the premium (it may be that some aspect of my statement of needs can be tweaked to reduce the premium).
I could do better by going through comparison sites, but the saving would not be great and I value my time more highly than the difference! Also, I can't read through the small print of every policy being offered to find gotchas such as that which started this thread!