Just imagine: you find your boat in the harbor not on top of the water, but under it? Fortunately you are insured… but will the insurer pay out in all cases? Have you read the policy properly? Lawyer Frits Hommersom lists the most important cases of damage.
During a trip on the IJsselmeer, you are rammed amidships by another ship. The motor sloop that was always safely moored turns out to be stolen. Or, in all your enthusiasm, you drive your wheelhouse off the bridge. Luckily you are insured, right? Almost every boat owner has a more or less extensive water sports insurance for his greatest hobby. There are several types of insurance, the differences being mainly in the extent of what is covered. Each insurer uses special clauses to determine the so-called scope of coverage. Some policies have very comprehensive coverage, while others have many exclusions. For example, one insurance company will explicitly cover damage caused by ‘inherent vice’ while another will not. One insurer will cover ‘own fault’ and another will exclude this. Notorious clauses are those excluding coverage in connection with ‘insufficient maintenance and insufficient care’ and the damage caused by ‘gradual influence of light and/or moisture or certain contaminants’. Some policies cover ‘external calamity’, but what do they mean exactly?
The real stress test for your water sports insurance is of course the moment you need the insurance in case of damage. What are the mutual obligations in the event of a claim and how do insurers deal with claims in different cases? We go over the most important subjects in the policy conditions and illustrate them with an example. This makes it clear what is expected of you in the event of a claim and where your opportunities lie.
One cause Every claim obviously has one cause. Even if there are many circumstances that together have led to the final damage, in insurance law only one legally relevant cause is designated that results in a covered or excluded event. However, it is not always clear which circumstances actually occurred. This is the big issue of the burden of proof: what must an insured party claim in order to receive a payment and what may/should an insurer claim in order to refuse payment? The key words here are ‘external calamity’, ‘inherent defect’, ‘theft’, ‘own fault, intention and recklessness’. In general, the law stipulates that the insured, as plaintiff, must in principle prove that his damage was caused by an event covered by the policy conditions. Thus, for named causes of loss, an insured will have to prove one of these causes. But reasonableness and fairness also have an influence on this, it is not only about the literal interpretation of the policy conditions.
Defect and mischief.
Insurance companies refer to ‘inherent defect’ as an ‘inferior property of a certain item which should not generally be expected in items of a similar type’. In plain English: the damage must fall outside what you could have expected from the item in question. And normal wear and tear does not count as a defect. In principle, the law excludes the obligation to pay compensation due to inherent defects. If the inherent defect is insured, it must be explicitly stated in the policy conditions. If the inherent defect is not covered, as it is in most cases, the only thing the insured has to state in the event of a loss is that the event did not arise from an inherent defect. In that case, it is a matter of an external calamity, a danger leading to damage that has its origin ‘outside’ the insured good. External calamity is generally included in the insurance. If an insured makes a claim based on an insured inherent defect, this will often have to be confirmed by an expert. If this inherent defect can be demonstrated, payment will have to be made.
Ship under water.
A fine example of a concurrence of external calamity and own defect (both of which were insured in this case) is the following: Mr. Dop gives the order to launch his ship from the winter storage. Three days later he finds the vessel on its keel at the bottom of the harbour. Technical examination reveals that there is a crack at the back of the keel and that water has been able to enter through that crack. Extensive reporting shows that this type of specific sailing vessel has a weakened keel/hull connection which allowed this crack to occur. The insured therefore invoked its own defect. However, the insurer argued that the damage had occurred at a location where repairs had already been carried out. Furthermore, the insurer argued that this damage could not have occurred spontaneously. Further investigation shows that with a probability bordering on certainty the ship was placed too hard on the sheerlegs and that this could have caused the crack. After his first report the expert confirms, on request, that no previous repairs had been carried out at that location and that the damage could only have occurred because the laminate at that spot had been weakened by the construction fault. The court concluded that the damage was due to inherent vice, which is covered by the policy terms and conditions, and that the insurer should pay out. in this case, both inherent vice and external calamity were covered, but what would the insurer have said if that had not been the case? in that case, the insured would not have received any payment based on inherent vice and the focus of the discussion would have been on the question of whether there had indeed been an external calamity in the form of the over-braking of the vessel. and the marina might well be facing a claim.
Many insurance issues, as described above, involve an expert. In fact, almost every claim is investigated by an insurer’s surveyor and almost always the insurer follows his position. The influence of an expert on the distribution of the burden of proof is therefore very great and for that reason the findings of the experts must also be critically tested. If a case goes to court, the court may determine how much value it attaches to the findings of an expert who tests the conclusions of the insurance expert. But if the opinion differs, he will still have to justify it.
In a claim for theft, it is usually difficult to provide evidence of the theft. The boat is gone, what else is there to say? For this reason, case law does not place too heavy demands on providing evidence of the theft. In principle, reporting the theft to the police is sufficient. In a few cases, like the one below, the insurer will present facts and circumstances that make the insured party’s theft claim insufficiently plausible. And there is a heavier burden of proof.
The exchange party.
Mrs. Bos claims an indemnity payment for misappropriation of her motor vessel. Further investigation by the insurance expert reveals that Mrs. Bos was in a certain relationship with a Mr. Dries. This Mr. Dries allegedly used the insured’s vessel regularly and he was also going to sell it for Mrs. bos. After that, the ship disappears. According to Mr. Dries he has exchanged the boat with Mrs. bos and this against a batch of furniture. The insurer rejects the claim, arguing that there is no question of misappropriation, but apparently of an exchange agreement concluded between the parties. and in that relationship there is no role for her. In the meantime, the insured has filed a report of embezzlement. She submitted the case to Kifid, the Financial Services Complaints Institute. The latter ruled that embezzlement was covered under the policy conditions and that, according to case law, the burden of proof of embezzlement need not be too high. The insured only needs to make it sufficiently plausible that there is embezzlement. This plausibility can be found in the fact that the insured party has reported the matter to the police. The Kifid ruled that the insurer is obliged to pay compensation.
Not all cases of theft are covered. As an insured party, you generally have a duty of care to prevent damage. This means that you have to take the normal precautions and exercise the usual caution with regard to the insured goods. The concept of ‘exercising due care’ is also sometimes used.
More information or download old articles: https://www.anwb.nl/kampioen/algemeen/digitaal-archief