To buy or not to buy. Insurance quandry. Help!!

CaptainBob

CaptainBob

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www.yacht-forum.co.uk
I've had a survey done on a fairly old yacht. I was happy to accept the issues - some more serious than others - and deal with the serious ones immediately, and plan to resolve the less so as time and funds permit.

The surveyor has listed some "recommendations" some of which are in a section entitled "things which must be rectified before the boat is put to sea", others in a section entitled "rolling maintenance suggestions for the future".

I've had an insurance quote... but they've included a clause that basically says "You _must_ comply with _all_ recommendations from the surveyor" - and that "We will not cover for loss, liability or damage caused as a result of my failure to comply with the surveyor's recommendations".

Now some of the recommendations are really petty - like "replace missing vanity basin in heads compartment"... surely the insurance company aren't insisting that things like this are sorted? But the wording of their clause starts with "You must comply with all..."??

Another recommendation is that "engine oil and fuel leaks are fixed"... but there are no "engine oil and fuel leaks"... this was a mistake on the part of the surveyor - there is a lot of WD40 sprayed over the engine which was mis-identified.... so I can't resolve this, or pay someone to resolve it... but what if the engine goes poomph and I drift into a £5M fellow sailor's yacht... will the insurance company say, "well you didn't fix the oil and fuel leaks, or replace the missing sink, you're not covered, good luck"? And if they do say that, who IS liable? Me personally? To what extent?

Final issue that's worrying me about this is that the survey reports "signs of weeping at the keel bolts" and re-bedding the keel is in the list of "rolling future recommended" repairs. I wasn't planning on attending to this in my first season (cash flow reasons) as it's really very minor "weeping"... but what if the situation degrades suddenly while I'm away from the boat, and it sinks at its mooring? Would that be covered?

Also, if it sinks at its mooring (in a river) how hard exactly is a re-float? Impossible? Are there liability implications here also with salvaging - pollution - something else?

I guess the answer to all of the above is to hammer out the details with the insurer and get clarification from them directly - but the guy I spoke to yesterday really found it impossible to give a simple yes or no answer to a straight question... and I figured I'd just sound out my problem with you lot before re-trying.
 
Have the proposed insurance company got a copy of the surveyors report?

Have you tried another insurance company

I would be indicating to them which of the "recommendations" in the surveyors report will be carried out before putting to sea and which will be done at a later stage (ie vanity basin!) and see what their response is.

I believe Insurance Contracts have to be fair - so lack of vanity basin shouldn't invalidate your insurance if you ran in to your mates £5m yacht ... but if you sank due to leeking keel bolts which you hadn't fixed then it is more debatable!
 
I had quite a dialogue with Pantaenius over this kind of thing. There were some things they wouldnt cover till fixed, (rightly so), others they confirmed they werent bothered about, and one, (rigging), where we agreed a 50% deductible/excess.

Initially, they covered me as long as I remained alongside then, when I wanted to go to sea but some gas issues werent dealt with, they covered me, but excluded anything to do with gas. On each occasion I got revised policies identifying the exclusions.

I doubt any insurer would send out a policy which excluded claims relating to damage and injury caused due to a crappy vanity basin - or would they?
 
[ QUOTE ]
I doubt any insurer would send out a policy which excluded claims relating to damage and injury caused due to a crappy vanity basin - or would they?

[/ QUOTE ]
I think they'd exclude damage/injury if you were wearing the wrong coloured underpants if they thought they could get away with it !!
 
Back to basics...

Going back to basics, I'd be more concerned about the surveyor than the insurer. If the surveyor can't distinguish between WD40 and "engine oil and fuel leaks", I'd question his competence. Put another way, might there be aspects of the boat which really should give you concern, but which the surveyor hasn't noted?

If you're happy to accept the survey, then negotiate with the insurers. But be aware that the written policy is the sole basis of the contract, and they will try to get out of paying claims if they can.

You might also look at your priorities. You've made a fairly dramatic leap from weeping keel bolts to sinking at the mooring - but if that is a concern for you then it would be better to fix the keel bolts before putting the boat in the water.
 
Isn't the essence of the insurer's position in the clause: "We will not cover for loss, liability or damage caused as a result of my failure to comply with the surveyor's recommendations".
Surely they're saying they'll cover you normally EXCEPT if it can be shown that any claim arose out of a shortcoming raised in the survey which you had failed to remedy. In other words, you'd be insured for most eventualities. That seems to me to be an entirely reasonable position on their part, even if the phantom oil leak thing is a bit Kafka-esque.

However, I'd clarify that this is indeed the case. Or consider using a less picky insurer. Or another boat.
 
A prudent owner would obviously carry out the any recommendations within the timescales indicated by the Surveyor. Some recommendations may be listed as "before the boat is put to sea", some may be listed as "within the next 12 months" and so on.

As an extreme example, if the Gas system is to be replaced prior to putting to sea, and the boat subsequently blows up, questions will be asked as to whether the gas was replaced. If it had not then I think that the insurers would have a valid case to decline the claim.

At the other extreme, the surveyor may highlight that some woodwork would benefit from a coat of varnish at the next winter lay-up. The insurers would be wrong to decline a claim if the varnish had not yet been applied, as this could not realistically have any influence on a claim.

I suggest that you clarify this with the insurance company and if they're unable to give you assurances of what would and wouldn't be covered, then look elsewhere.

I hope this helps.

Jon Langford
Noble Marine
 
It will come down to how you interpret the surveyors recommendations. His recommendations appear to be that some things are fixed before going to sea, and some of his recommendations are that things are to be treated in the longer term. You obviously need to comply with the immediate things, but you can comply with the long term recommendations by having a work plan outlines, where they are to be repaired in the future. In this way you comply with the surveyors recommendations and should not have an issue with the insurance company.
 
To be honest I would have thought being watertight and the integrity of the keel were amongst the most important things for a yacht particularly considering the fatal consequences of keel loss.

I would want to know why are the bolts weeping, ie has she been badly grounded or snagged someting around the keel? Unless I had the cash to have it fixed first I would walk away.
 
I had a number of issues when I bought my boat, and I wrote out a document, containing the surveyor's recommendations followed by (a) what I'd done already, (b) what I planned to do on lift-out (this was in July) and (c) what was planned to be done "in the near future". An old boat will have an insurance re-survey in 5-10 years' time when they can check up on you, depending on the insurer, so they were happy I was addressing the problems in an organised fashion and took my money. If they weren't happy, then at least they'll only come back on the points they want you to deal with as a matter of urgency, and the vanity sink gets forgotten. And things in writing have a way of finding someone competent enough to understand them, rather than the girl or boy in the call centre.
Something like the engine "oil leaks" might involve saying you've consulted with an engineer who says there's nothing to worry about. Don't start paying for professional reports or proofs unless they directly ask for them.
 
During my last survey (April this year) by a surveyor I have used many times before, I learned that surveyors are (now) constrained by the standards of their professional organisation, and some of what they report may be as much to do with meeting their professional standards as with satisfying insurers' requirements. Therefore the terms used (''recommend'' / ''advise'' / ''suggest'') probably have more specific meanings to insurers than to us, the general boat-owning public.
You (all of us?) should find out what these specific meanings are. What I have done is to implement 'recommendations' and confirm to my insurers that those have been done before commencement/renewal of the policy; then I carry out those 'suggestions' I agree with to a programme to suit myself.
Good luck!
 
Captain Bob - You will find pretty well all insurers wll say the same thing. You will need to itemize the faults into safety - insurable issues. Some of these items the Insurere will state they will not cover until rectified. So once rectified you will need to send them evidence of work to remmedy.

With longer terms items like the keel weep, I think you will find that the insurer will agree to a cover provided you plan to do it in a resonable time.

By the way, I presume you would have made an offer pre survey. So anything that you didn't know about should be taken into account in a negotiation on the adjusted selling price. For some items you should go for 100% of cost. For othesr - like replacement of electronics that were thought to be working, you will get something better in replacement, therefore you may go for a reduced 20-50% off.

You must have a view of the market value when complete. In my experience, the best bargains on boats are the ones where the work has already been done. Boats with a lot of work to do, invariably work out considerably more expensive, as the sellers have an unrealistic expectation of value. Make your head rule the heart, and not the otherway round, or it could cost you dear.

Good luck!
 
Thank you for your replies.

I'm trying to let my head rule here - but it's hard to know when it's my head or my heart telling me to turn tail in the face of the insurance company response.

The surveyor has said that the boat is basically very sound - the keel seepage is nothing to worry about in the short term and is common in this boat - and the fuel/oil issue is not an issue. Other than that all issues are literally a matter of a few quid and a little time.

I did already use the survey to haggle the price down somewhat - and paid a deposit on the boat after agreeing a price. What I *should* have done however, is get some insurance quotes first.

Hindsight.
 
When I bought my (25- year-old) boat the surveyor's report made a number of recommendations of various kinds and importance. The insurance company asterisked some of them and required them to be done before putting into commission, (up-to-date flares and fire-extinguishers, repair steaming light etc.) but made no comment about the others.

Insurance arranged through Bishop Skinner.

Alan
 
Typical. Find another broker - try Craftinsure on the net.

To be more helpful: an insurance company that wants to cover its backside with a sweeping condition such as you describe is not worth dealing with. You know in the event of a claim it's going to be a slog! And what if you did complete all the surveyor's recommendations? Would the insurer then say "eh, please show us the new survey proving all our conditions were met?" It's an endless game.

All insurers one way or another will expect you to take best care of the insured goods, and protect their interest (as they see it) from claim. But it's a question of degree.

Go elsewhere, where the loss adjuster would have to show on the evidence of the claim itself that you had contributed to the loss...


PWG
 
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