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Making an Insurance Claim

You have just found that you have a situation where you will be making an insurance claim. The following are some guidelines which you may find helpful.

YOU THE INSURED
Immediately following loss or damage to your vessel or injury to personnel:
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You should not admit liability or assume any obligation.
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You must take reasonable steps to safeguard your property.
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You should always act as if you are not insured. Do not assume that your insurance will apply to this loss, you may not be covered under your policy.
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You should make an aural report to your insurers as soon as possible followed by a written statement. Your Insurers will relay your report to the Underwriters concerned. The written statement is called a "Masters Protest".

MASTERS PROTEST
Should include:
1. Exactly where, when and how the incident occurred
2. Detailed description of damages to property or injury to persons
3. Names and addresses of witnesses

The underwriters or your insurance company will then appoint a Marine Surveyor to act as their representative "without prejudice", that is on an impartial basis. The timescale of the appointment of the Surveyor varies from hours to weeks after the loss and is dependant on a variety of factors. These factors include the timing of communications, urgency of the problem and availability of Surveyors.

IF YOUR CLAIM IS FOR THEFT OR VANDALISM
You must notify the local police and obtain a copy of the police report. You should take measures to prevent further loss or damages, including replacement of locks etc.

IF YOUR CLAIM IS FOR INJURY OR COLLISION
You must notify the Coast Guard or Marine Police or Police and obtain a copy of their report.

IF YOUR CLAIM IS FOR STRANDING, DISMASTING, ETC.
It is your responsibility to make your best efforts to organise salvage, towage, emergency repairs or whatever is required to minimise the damages to your vessel. If a Surveyor has been appointed, he will usually try to work with the Salvor and yourself, to advise on the best way of actually carrying out the salvage. However what actually happens to your vessel is your decision.

THE ROLE OF THE SURVEYOR
The Surveyor is employed by the Underwriter to act on an impartial basis as follows:

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To advise you regarding salvage, towage where necessary.
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To make an assessment of the incident and to determine the cause of the damage or the cause of the accident.
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To make a list of the damages together with recommendations for repairs. This list is copied to you to help you as a guide to the repairs for damages resulting from this loss.
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To review the estimates for the repairs and to discuss with you and the Repair Contractors any estimates that appear unreasonably high or unreasonably low. It is the Surveyor\'s role to attempt to have the damages repaired to the pre accident condition.
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Once all the estimates have been reviewed and appear to be satisfactory, the Surveyor reports the facts to the Underwriters.
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If more damages are found during the repairs, it is YOUR responsibility to inform the Surveyor so that he can confirm to Underwriters that these damages were part of this loss.
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When the repairs have been completed, the Surveyor will review all the invoices and confirm to Underwriters that the bills are "fair and reasonable" to repair the damages resulting from this loss.

YOUR RESPONSIBILITY AFTER THE INITIAL INCIDENT
1. It is your responsibility to select the repair contractors and obtain estimates.
2. It is your responsibility to instruct the repairers to commence work. If there are delays in commencing repairs, and the delays result in further damages, these damages will not be covered by your policy.
3. It is your responsibility to pay for the repairs.
4. It is your responsibility to monitor that the repairs are satisfactory.

UNDERWRITERS RESPONSIBILITY
Most marine insurance policies are of the indemnity type. This basically means that Underwriters are responsible for compensating you for the legitimate costs of your loss. The only way actually to establish those costs is for you to pay the costs in the first instance. Underwriters have no obligation to make advance payments to you and have no obligation to pay contractors.

Underwriters will study the Surveyors report and then advise you whether this loss is, or is not covered under the policy. Assuming the loss is covered under the policy, the Underwriters will compensate you for the legitimate costs of the loss which have been reviewed and agreed by the Surveyor, less the policy deductions, when the repairs have been completed.

Occasionally Underwriters do make advance payments on large claims, if requested by the assured and the amount requested has been agreed by the Surveyor.

RESPONSIBILITIES OF YOUR INSURANCE COMPANY
1. Appoint a Surveyor on behalf of Underwriters
2. Assist you with the presentation of the claim to Underwriters
3. Assist with the requests for advance payment if required.
4. Act as an mediator in the event of a dispute with the Surveyor
5. Some Insurance Companies are able to settle claims which total less than US$25,000.00 if the Surveyor recommends that the figures are "fair and reasonable"

ABSENTEE OWNERS
If you are not able to be present at the initial stages of the claim, it is helpful if you can appoint a representative to work with the Surveyor and repair contractors, getting estimates etc. Your representative should have the authority to instruct repair contractors etc. The cost of this representative will not be covered by your insurance, as it is not Underwriters responsibility that you are not able to be present at the initial stage of the claim.

IMPROVEMENTS
Many owners decide to have alterations and improvements carried out during major damage repairs. Provided that this is discussed during the "estimate" phase of the claim and the additional cost of the improvements (to be borne by you) can be agreed with the surveyor and repair contractor, improvements may be agreed. For example if the plywood cabinet work was damaged and you wanted to replace it with varnished teak, the Surveyor would recommend to Underwriters that the reasonable cost of the plywood should be included in the loss but the additional cost of the teak should be to your account.

FINALLY
Communication between you and the Surveyor is essential for the smooth processing of a claim.

The above guidelines represent the opinions of Caribbean Marine Surveyors Limited and are based on previous experiences with a number of different insurance companies and Underwriters.

 







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