2013, 06-05 Read Your Policy (and then read it again.)

     For those of you who are cruisers grab a pen and write this down so you don’t forget: read your boat insurance policy being especially careful to look for clauses that require you to notify your insurance carrier about any changes in your status.  Friends of ours recently learned this the hard way. 

  This husband and wife couple come from our old dock –F dock at Seattle’s’ Shilshole Bay Marina  in Seattle and bought their Hylas 46 brand spanking new.  They crossed the Pacific along with us as part of the Pacific Puddle Jump class of 2012 and then spent the last season in New Zealand. There plan for the next few months was to sail back to Tahiti (yes they loved French Polynesia so much they decided to sail BACK to meet friends in Tahiti and do it all over again.) They were in a boat yard New Zealand finishing up the final bits of provisioning needed for the long passage east while their new bottom paint dried.  They were both below when the stands holding them in the yard collapsed. 

     When the stands collapsed the yacht tumbled over snapping their mast and ripping through the rigging. One of the now jagged pieces of steel punched through their fiberglass hull ripping through a locker, tearing through their cabinetry and –ewwww- punching a hole in their holding tank and leaving pooh to seep out and spread along the now down side of their hull.  Thankfully neither of them was seriously injured but in the blink of an eye their coming season of cruising plans came to a grinding halt.

    After regrouping and working through the shock they of course contacted their insurance company –Northern Reef.  Northern reef sent out a claims adjuster who surveyed the wreckage and then informed them that they had NO coverage for of the accident because they had not notified them that they were being hauled for work in the yard.  Turns out their policy had a clause stating that if they were hauled for more than 24 hours that constituted a “decommissioning” and they company needed to be notified (and a charge for an additional rider would be necessary.

    Surprisingly just four days before the accident one of the cruisers here in Fiji mentioned his policy requires him to notify and pay a fee for a rider whenever he is hauled in a yard.  At the time I had never heard of such a clause and had certainly never read it in our policy.  When we crossed the pacific we had the same insurance company cover Island Bound but just before cyclone season we spoke with another cruising friend who had trouble with a claim they had with Northern Reef.  His trouble was so poorly handled that he had chosen to change his carrier.  Our policy was up for renewal and heeding his word decided to change to another company just a few days before cyclone Evan (a category 4 cyclone) roared over us in December. 

   When we chose Northern Reef we did so because there policy came in considerably lower than any other company and because they were one of the few companies that provided coverage for a cruising couple in south pacific waters.   We have never had an insurance claim on Island Bound but decided that perhaps there was a reason for their low ball price (they simply find a way to deny most claims or portions of most claims.  And since we now had so many ocean miles under our keel that we would now qualify for most policies at a reasonable price even on big ocean passages.

      I know insurance companies are all about the money.  They won’t cover you if you’re a bad bet and for cruisers this takes many shapes.  When we were shopping for coverage we almost bought a policy that said yes they would cover us as a cruising couple but in the fine print they also would have required us to never navigate after dark –if your crossing an ocean which is what the policy was to cover you can’t simply stop sailing when the sun goes down- and once we arrived anywhere for the policy to provide coverage we would have to have a qualified sailor aboard while at anchor at all times.  In English that means when we arrived we would have to take turns going ashore leaving one of us onboard at all times.  When we brought to their attention that neither of these clauses was possible for a cruising couple they simply restated their requirement while assuring us they would be happy to offer us a policy!   

     So, the moral of the story is if it sounds too good to be true it probably is and if you make any changes in your cruising status (hauling, decommissioning, leaving on the hard or leaving unattended at a marina while you travel elsewhere) be sure to check your policy and comply with any clauses that allow your carrier to reduce or deny any subsequent claims.  Happy sailing, Kat.