Marine insurance policies are generally controlled by the doctrine of “uberrimae fidei,” requiring the parties to the policy to deal in “utmost good faith.” While this doctrine technically applies equally to the insurance company as well as the policy holder, it is most often applied to the boat owner, whose disclosures at the time that he or she applied for the policy are carefully examined. Simply put, the boat owner is required to disclose any information which may be related in any way to the coverage that is being considered, and the insurer may avoid the payment of a claim even if the failure to disclose was an innocent mistake. This is one area where the assistance of an attorney may be helpful at the time of your vessel purchase.
Another area of concern for a boat owner is the warranty that he provides to the insurance company that requires the owner to maintain the boat in a seaworthy condition. This warranty frequently rears its head when a boat sinks at its dock. Almost by definition, a boat that sinks at its dock is not seaworthy, and the denial of an insurance claim will cause the boat owner to suffer thousands of dollars of damage. This loss is most often caused by the incursion of water through a poorly maintained propeller shaft packing, at a time when the bilge pumps are inoperable for some reason. This is an extremely common chain of events, and every year we receive a half-dozen or more calls from boat owners who have experienced this catastrophe. We are sometimes able to help, but our hands are frequently tied. Each case is unique, so please do not hesitate to call us. Better yet, pay close attention to your boat’s required maintenance!