Common Reasons Marine Insurance Claims Are Denied

Wed May 17th, 2023 on     Marine Insurance,    

People and businesses own boats and other types of watercraft for a variety of reasons, from hauling cargo to using them for relaxing on the water. The purpose of the watercraft will generally dictate the type of insurance policy the owner should obtain, and when claims under those policies are denied, it can be for a multitude of reasons. When this happens, it is best to speak with a Miami property insurance lawyer at Ver Ploeg & Marino. 

Some of the most common reasons marine insurance claims are denied are listed below.

Maintenance Neglect

Vessels that navigate the water require a lot of upkeep and maintenance. When they are not properly serviced, they can break down or have issues that affect their ability to operate. Insurers are aware of the need for maintenance on boats and other watercraft and sometimes claim that lack of service and care is the reason a watercraft no longer works properly, and therefore they are not liable under the terms of the insurance policy.  

Because of the possibility of a claim denial due to lack of maintenance to a watercraft, our Miami property insurance lawyer advises that all watercraft owners keep a detailed log of all maintenance performed on a watercraft. This includes every time a part is replaced or any type of repair or maintenance is performed. Having this information is beneficial should the insurer ever deny a claim due to lack of maintenance. 

Incomplete or Untimely Filing of the Claim

Insurance companies will deny claims for coverage on marine vehicles due to the claim being incomplete or not filed in a timely manner. It is imperative when filing a claim that all information provided is correct and complete and that the claim be filed within the time frame specified in the insurance policy. Any deviance from what is required by the terms of the policy may be used by the insurance company as grounds for denial. 

Documentation is key when communicating and corresponding with the insurance provider. It is important that the policyholder keep copies of all correspondence and detailed notes regarding any conversations had with a representative from the insurance company. One of the reasons for this is to have documentation to provide to a Miami property insurance lawyer should the matter ever become litigated. Insurance companies have been known to give policyholders incorrect information, and the ability to have documentation that states when information was relayed and by whom is very beneficial. 

Improper or Inadequate Coverage

Different insurance policies vary according to what they cover and their policy limits. Our Miami property insurance lawyer recommends that every person or entity that purchases an insurance policy closely reviews the terms of that policy. It is essential that the policy provide the types of protection needed and policyholders should not pay for coverage that is not needed. It is also advised that current insurance needs are reviewed anytime a change is made to a watercraft or the business that uses the watercraft. At the very least, a thorough review should be conducted annually to ensure that the insurance policy adequately addresses the current needs of the policyholder. Pay special attention to the exclusions part of the policy as many coverage issues are caused by what a policy excludes. 

When a policyholder has concerns or questions and addresses them with the insurance company, they should keep notes of everything they are told, when they are told the information, and by whom they are provided the information. 

Improper Transport or Packaging

Many businesses use large cargo vessels to transport items, and when purchasing insurance for these vessels and the cargo they carry, it is important that they obtain policies that address their specific needs. The insurance policy will have certain items that are included and others that are excluded, and the business owner will have their claim denied if their specific needs are not addressed in the policy. 

One reason insurers deny claims made by cargo vessels is due to improper packaging of the cargo being transported. Again, this is another example of why documentation can be so beneficial to a Miami property insurance lawyer when they are litigating with an insurer over a denied claim. Proof that the cargo was loaded and transported in accordance with the terms of the policy can bring a quick resolution to an issue that might otherwise drag on for months. 

Types of Watercraft Covered by Insurance Policies

While Florida law does not mandate that boat owners insure their boats, insurance is highly recommended for many different types of watercraft, including the following:

  • Bass boats
  • Sailboats
  • Jet skis
  • Dinghies
  • Pontoons
  • Yachts

It is important to note that different types of insurance policies exist for different types of watercraft. 

Claim Denials Under Marine Insurance Policies and Bad Faith

When an insurance company denies a claim, there may be a valid reason. However, there are times when the reason is that the insurance company does not want to have to pay even though the terms of the policy obligate them to do so. They are looking out for their bottom line instead of honoring the policy they agreed to, and this means they are acting in bad faith. When this happens, they need a Miami property insurance lawyer that is experienced in industry practices and knows how to help victims of bad faith insurance practices recover the compensation they are owed. At Ver Ploeg & Marino, our attorneys focus on assisting policyholders in complex recovery matters. Contact our firm to learn more. 

Speak With A Miami Property Insurance Lawyer at Ver Ploeg & Marino

If your marine insurance claim was wrongfully denied, you need counsel from a dependable Miami property insurance lawyer. At Ver Ploeg & Marino, our attorneys are well-versed in assisting policyholders involved in simple and complex disputes with their insurers. Contact our firm today to learn more about how we can help you.

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