MARINE INSURANCE CHECKLISTS TO PREPARE FOR HURRICANE SEASON
By John W. Merting, Board Certified Admiralty & Maritime Lawyer
Because the last several years have seen a dramatic increase in the number of claims being denied by vessel insurers, all Florida boaters should review their marine-insurance applications before this year’s hurricane season to ensure that they are complete and accurate in all details.
Why review the application and not just the policy? Marine insurers usually issue policies to all who apply and in general only "underwrite" and thoroughly investigate an application and policy when there is a claim. Florida dramatically restricts this practice of "post-claim underwriting" for other types of coverage, but maritime policies can be governed by federal law, which permits a policy to be voided if the insured doesn’t accurately disclose certain information in the application.
Florida marine insurance policies are not subject to statutory minimum standards like other types of policies, and many marine policies are written through substandard companies and surplus lines companies. This means the Florida Insurance Guaranty Association doesn’t cover the company if it becomes insolvent. Florida law requires a "notice" be stamped on the declaration page of policies written through a "surplus line" insurer; avoid such policies unless you have literally no other options.
Pay particular attention to the policy’s exclusions when you review your coverage:
Alcohol. An increasingly common exclusion denies payment for claims arising if the operator has an unlawful blood alcohol content. Under Florida law the limit is .08, which for some people is just two drinks. This exclusion might not void the policy completely, but it might preclude damages for under-the-hull coverage, which pays for physical damage to the insured's own boat.
Post-claim conduct. Courts have invalidated policies due to conduct by an insured after a loss for inflating either the amount of the claim or for including equipment on the vessel that in fact was not present at the time of the loss. In the event of a loss, you should not give a tape-recorded statement before your lawyers has had the opportunity to review the application and policy.
Sinking ships. If your vessel sinks at its dock or mooring, many companies automatically decline those losses saying you breached your warranty of seaworthiness. Obviously, a seaworthy vessel would not sink at its mooring, so you should keep detailed records of all maintenance efforts, expenses and inspections to prove that you took all reasonable steps to assure the continued seaworthiness of the vessel.
“Acts of God.” Many insurance companies deny payment for damages to other vessels, docks, and shore side improvements by vessels they insure, claiming storms are "acts of God.” Under maritime law, the "act of God" defense requires that the vessel owner use all available, reasonable and prudent acts of seamanship to protect his vessel, and to prevent it from causing damage to property of others. This includes but is not limited to removing sails, Biminis, canvas, marine electronics equipment and additional gear to safe storage ashore. Many insurance companies not only increase the hurricane deductible, but exclude payment for sails and canvas left on a vessel. Obviously, the vessel should be moved to a hurricane hole or other place of safety, or placed in safe storage on land. A vessel left in the water should employ multiple anchors: a storm anchor with proper sized chain, rode, and ample chafe guard.
Another consideration to keep in mind is your policy’s description of who is included in the term "insured." Some policies include everyone in the owner's household and everyone who is operating the boat with the permission of the owner. Others limit it to only the named owner and no other family members unless they are at least as old as the named owner. That means that if a husband owned the boat and his wife was one day younger, she would not be covered. Obviously, children and anyone outside the household would likewise be excluded from coverage.
One final note when reviewing your policy: Legal issues related to maritime insurance are governed by a variety of state and federal laws; your application and policy reviews should be comprehensive and not be limited solely to the topics included in this article.
John W. Merting is a board-certified Admiralty & Maritime Lawyer in Gulf Breeze, Florida. Certification is the highest level of recognition by The Florida Bar of the competency and experience of attorneys in the areas of law approved for certification by the Supreme Court of Florida. Contact him at (850) 916-9645 or jmerting@bellsouth.net.
CONTACT: Lisa Garcia, APR
DATE: April 1, 2005
TELEPHONE: 850/561-5769
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THE FLORIDA BAR SPEAKERS BUREAU OFFERS SPEAKERS TO HELP CELEBRATE LAW DAY
"INDEPENDENT COURTS PROTECT OUR LIBERTIES"
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TALLAHASSEE, April 4, 2005 -- May 1 is Law Day, a time we celebrate the fact that we live in a country governed by laws. This year’s Law Day theme is “Independent Courts Protect Our Liberties,” focusing on the American jury system and its role in our democracy.
The Florida Bar, through its Speakers Bureau, has attorney volunteers available to address civic and community groups, schools, and professional organizations, to discuss the role of the jury system in a free, participatory, democracy.
According to the American Bar Association, Law Day is an opportunity for all Americans to celebrate and enjoy our freedoms. The jury is the embodiment of democracy. Juries-small bodies of ordinary men and women-are entrusted with decisions that involve the liberties and property of defendants. In that trust, a democracy confirms its faith in the ability of people to make just and wise decisions, which is the very definition of democracy. The jury system serves as an opportunity to educate Americans in law, legal processes, and decision-making in a democracy.
If you would like to have an attorney volunteer speak with your organization about Law Day, or other legal topics, at no cost to you, contact Gail Grimes at 850/561-5767, or email ggrimes@flabar.org.
CONTACT: Gail Grimes, The Florida Bar
DATE: April 4, 2005
TELEPHONE: 850/561-5767
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