Don't get me wrong, if you own a boat you're foolish not to have insurance. Typically marine insurance is divided between liability and hull coverage. The problem with marine insurance is that it feels and sort of tastes like auto insurance; there's the cute graphics, the friendly sayings and the welcoming websites. But, problem is that it's very different from auto insurance. The general maritime law and marine insurance policies impose obligations on a vessel owner which are very different from an auto policy. Here are three things that make marine insurance a very unique dish:
i. A vessel owner typically owes an insurer the duty of uberrimae fidei (utmost good faith and fair dealing) when applying for a policy of marine insurance. Failing to disclose a negative claims history or problems with your vessel could give rise to a denial of a claim you make months later.
ii. Coverage exclusions abound; make sure you read your policy and understand what is and isn't covered, when coverage is afforded and where coverage is effective. If you make a claim for a loss arising during the "lay-up" period or outside of your navigational limits, you could be up a very shallow creek.
iii. In this attorneys' experience, many marine insurance policies state that there is no coverage for losses resulting from alleged "ordinary wear and tear" and/or "lack of maintenance." If your boat sinks because your through-hull fitting fails, your insurer may attempt to decline coverage.
The bottom line is that a prudent boater will take the time to understand his boat insurance. If you have questions, speak to your broker, or, contact an admiralty attorney. If you suffer a loss and the insurer is declining to cover the loss, promptly contact an admiralty attorney to understand what remedies exist.
Underway and making way.
By John K Fulweiler