Many insureds feel that by paying a high premium and having a good relationship with their insurance broker, they should have good insurance or better than average coverage. Relationships and continued service creates a bond and trust between broker and buyer.
However, it is still critical that the insured review and read the insurance policy. Reading insurance policies isn’t thrilling like a chapter out of a David Baldacci novel, but you can ask your broker better questions and give specific instructions in a knowledgeable manner when you fully understand your current coverage.
A well-respected and time honored company has an endorsement in some of its vessel policies that can greatly reduce recovery. The endorsement has changed the deductible amount taken on vessel coverage for theft losses.
The amount of deductible can be a set rate like $1,000 or $25,000, but it can also be a percentage of the coverage. Here, in the endorsement the amount of deductible changes from 2% to 50% of the Coverage A for the vessel for theft losses. This endorsed change greatly reduces the amount of indemnity paid to the insured.
This endorsement only goes into effect for theft losses when the vessel is south of a specific area; here the location is Cumberland, Georgia.
The policy reads as follow:
THEFT OF PROPERTY ENDORSEMENT
This endorsement applies to an Insured Vessel only if shown on the Declarations Page or the applicable Scheduled Vessel Endorsement for that Insured Vessel.
It is understood and agreed your XXXXXXXXX policy is amended as follows:
In the event of loss or damage caused by theft to the Insured Vessel and/or any of
its equipment or personal property, the following applies:
1. Under PART A: PROPERTY DAMAGE COVERAGE, DEDUCTIBLE AMOUNT, the following is added:
c. we will apply a theft deductible equal to 50% of the Insured Vessel’s amount of insurance provided under PART A: PROPERTY DAMAGE COVERAGE to loss or damage caused by theft. This theft deductible will be in lieu of the PART A: PROPERTY DAMAGE COVERAGE DEDUCTIBLE AMOUNT shown on the Declarations Page or by endorsement and will be applied to the amount of each loss. It will be applicable to all partial, Total Losses or Constructive Total Losses.
2. Under PART A: PROPERTY DAMAGE COVERAGE, LOSS SETTLEMENT, the following is added:
In the event of loss or damage caused by theft to the Insured Vessel we will pay the lesser of:
a. the cost to repair;
b. the cost of replacement; or
c. the actual cash value at the time of loss, which is defined herein as replacement cost less depreciation.
3. Under PART G: PERSONAL PROPERTY COVERAGE, EXCLUSIONS, the following exclusion is added:
4. The PART G: PERSONAL PROPERTY COVERAGE, MYSTERIOUS DISAPPEARANCE AND/OR THEFT section is deleted.
5. This endorsement applies when the Insured Vessel is navigated, afloat, operated, used, stored, ashore, on land, in transit, transported or otherwise located south of Cumberland Island, Georgia.
No matter how many years you have been a boating enthusiast and no matter how long you have had a relationship with your broker, it is critical that you read the policy and question any provisions so you can understand your insurance and accept it or purchase another policy or more coverage depending on your needs and desires.