Insurance: To file or Not File a Claim

[jpendoley]

My boat was damaged when being moved by a hauler hired by my marina to launch boats in the marina. They lifted it beneath the sump in the encapsulated keel and crushed the sump-even though I explicitly told them the risk of damage if blocked or lifted in that area, After initially saying they would cover the cost of repair, both the marina and hauler are now backing out. Repair is estimated to be $5000. I am insured and can file a claim with my insurance company who I assume would go after them for payment but hesitate to do so because the boat is older and insurance companies are dropping coverage on older boats. If you lose coverage no marina will let you on their property for storage. Even though I believe the marina is 100% liable, I am considering small claims court rather than filing a claim because I don't want to lose coverage. Does this make sense? Am I obligated to go through insurance?
If I litigate in small claims court they would be liable for treble damages, but its the retention of insurance coverage that is the draw for me-not the damage award-I just want my boat back in the condition it was in before they damaged it.
Thoughts?

[SailingHarmonie]

You are not obligated to go through your insurance company at all.

First question: Just to be sure... Do you have hull insurance? If you only carry liability, then your insurance company is not going to be any help. I know this might seem a silly question, but insurance is not always clearly understood...

Second question: What is your deductible? Most policies have deductibles that will be greater than $5000, so filing a claim will get you nothing from your policy. If your deductible is significantly less then $5000, then you should seriously consider raising it. Also, be sure you understand what they will actually pay... will they depreciate the repair costs? They MIGHT pay a lot less than the actual cash costs of the repair.

Small claims court is a perfectly valid approach. You do not need to involve your insurance company at all. I don't know about the automatic triple damages part of that however. That seems unlikely, but you might have local information that I do not have.

They ONE question I would have that will require the input of a local attorney: If you go to small claims court and LOSE, if you then file an insurance claim will that loss compromise your insurance company's ability to collect from the boat yard? Does your policy speak to that at all?

I'd actually be very surprised if your insurance company would actually try to collect a sum as small as $5000 from the boat yard, given the costs of attorneys, but you never know...

[wholybee]

One consideration is that filing a claim might make you uninsurable for 3 or more years. I very nearly had this happen. I was in the process of making a claim, while also shopping for new insurance for the start of my circumnavigation. Despite the fact the claim was nothing of my own fault, it wasn't until I canceled the claim that I was able to get insurance. And 3 years later, I was still questioned about it on a renewal and had to submit a letter explaining that the claim was canceled by me and not ever paid.

It is very frustrating that I must have insurance to stay at a marina, but also knowing that in a more practical sense I can never actually use it.

With all that in mind, I would go through small claims. Actually, I might even get an attorney and go to a "real" court.

[Overdue]

The "treble damages" could be significant. What is your basis for thinking you would be awarded treble damages. Their conduct might be considered mere negligence, not necessarily deceptive, fraudulent or outrageous. In PA, there is a consumer fraud statute,"Unfair Trade Practices and Consumer Protection Law" that specifically provides for treble damages, for deceptive practices (maybe less than fraud), and not necessarily the same as punitive damages (outrageous conduct). Ordinary negligence does not qualify for either treble or punitive damages.

Your perception might be that their conduct was outrageous, but a claim adjuster might disagree, taking the position that it was simple negligence.

Your remedies available are provided by state law (where is the marina where this happened?). Talk to a local lawyer. $5k is probably not enough to justify getting a local lawyer, but if treble damages are available, maybe you could find an attorney who would take the case on contingency fee arrangement, where he/she gets paid from a successful recovery. The liability carriers for the hauler and marina will probably blame each other, or they might view your case as not worth defending and agree to each pay half to fix your boat. That offer might not happen until after they receive suit papers from the small claims court. You will need to document your damages, including repair estimate and hopefully you have photos of the event?

On the other hand, if you have a good long-standing positive relationship with the marina and confidence in their work (notwithstanding this most recent incident), you might also consider negotiating their immediate repair (to your satisfaction and under your supervision) and then maybe something extra "for your trouble", such as free splash, slip for the season and haul-out in the fall? Small businesses will sometimes decide to smooth-over something this small, to avoid submitting a claim and experience a possible rate-increase. Their liability deductible / self-insured retention might even be $10k or more.

Good luck, keep us updated so we all learn.

[jpendoley]

Harmonie, Wholybee and Overdue-All great input, thank you. I do have loss replacement coverage, but need to revisit the policy and verify deductibles. Treble damages is based on Mass Law 93A and it’s a bit of a stretch-standard small claim limit is 7K which is straightforward-this does look like negligence and it might force me to go the regular court route. Will keep you all posted. I will add that I will not share the marinas name or the name of anyone involved in the process for liability reasons.

[SailingHarmonie]

Ah, now I get the "triple damages" thinking. You think you are going to prove they were "negligent" and therefore will get triple damages. What might not be clear to you is that negligence has a very specific legal definition and has is tougher to prove. Even if true...

I don't think you shouldn't even really worry about it. All you need to show is liability, and get your straight up damages. It is a much easier burden of proof on your own in small claims court. You really do not want to drag this into a regular courtroom.

[Chotu]

wait a second. It sounds like an adversarial situation is developing. Can you save the situation from going in that direction first?

why don’t you let them fix it with your supervision?

They probably feel it’s not a $5000 job. That’s probably why they are backing out. Why do you think it’s $5000? Who told you that?

they can do it for a lot less money relying on their own labor.

I had a situation like this develop with a haul out previously. There was a marina south of Boston that hauled me out for a survey on my monohull that I last had. They tore off the toe rail.

I said hey look at this damage you did and I showed them pictures and stuff. They came out to look at it while I was at anchor just outside the marina. Instead of going to get estimates for the damage and hitting them with financial numbers, I said here’s the problem. You broke this. And they said OK. And they sent somebody out to fix it. Which they did.

The person they sent out used materials they already had on hand and labor they were already paying for so it didn’t cost as much as it would if I brought it somewhere else. Which is fine. Because I got the end result I needed. A fixed boat. And they didn’t have to pay out of pocket very much.

Isn’t there some kind of agreement like this you can make with them? Before it turns too adversarial and you start getting upset with each other?

[S/V Illusion]

Contact an attorney; obtaining reliable legal advice here is a ludicrous idea.

One suggestion - your underwriter will bifurcate the claim, the small claims court will not. Consequently, many judges will not be sympathetic to your attempt.

[jpendoley]

I don’t believe travel damages would apply in this case. That doesn’t mean they know that. The price to fix it came from a contractor they asked to provide a quote. I actually thought it was very reasonable. I just don’t think it’s reasonable for me to pay for it

[jpendoley]

Chotu-I am afraid the marina is taking an adversarial approach. I was and am more than willing to forgo legal action as long as I get my boat repaired by the folks that broke it at their expense. It’s pretty much open and shut. My question is whether to file a claim or not. I have a small deductible but don’t want to get on a do not insure list for a relatively minor claim-minor to the insurance company but large to me.

[Statistical]

Originally Posted by jpendoley

Harmonie, Wholybee and Overdue-All great input, thank you. I do have loss replacement coverage, but need to revisit the policy and verify deductibles. Treble damages is based on Mass Law 93A and it’s a bit of a stretch-standard small claim limit is 7K which is straightforward-this does look like negligence and it might force me to go the regular court route. Will keep you all posted. I will add that I will not share the marinas name or the name of anyone involved in the process for liability reasons.

I would drop all the treble damage nonsense. You don't need it, you almost certainly are not going to win it, and it would put you over the small claims court limit anyways.

Not sure why you are even considering it. They aren't engaged in unfair trade practices. They did a service for you damage occured you say they were negligent they say they weren't. This a dispute on the fact of the event. Someone is right and someone is wrong and a judge will decide that. If a judge finds them solely liable and the $5k repair costs credible you will get your $5k. If the judge finds each of you partially liable you will get some smaller share.

I wonder if you have dollar signs in your eyes at the idea of getting paid $15k for $5k in damages and profiting off this but almost certainly you will not. Treble damages aren't for making the plaintiff whole that is what compensatory damages are for. Treble damages are for punishing the defendant. They are relatively rare for egregious behavior. If the boatyard damaged your keelbolts then actively covered it up, told you the ship was seaworth, and later the keel fell off you might get treble damages.

You can probably get a consultation from an attorney for a reasonable cost of a few hundred dollars even if you decide to not have them represent you.

On a related note given your uncertainty of filing a claim for modest amounts (a reasonable concern) you might as well max the deductible going forward. Most people don't file claims for small amounts for this exact reason which means a low deductible is largely useless. If someone boat is a total loss they absolutely will be filing a claim and won't care about a $500 vs $5,000 deductible.

[George_SD]

Sorry to hear about the trouble. Do you know if you've signed and liability waivers with the marine or hauler that would give them an advantage in court if something says "we are not liable for any damage and you understand the risks"? These are often present in many agreements, even though they are not always enforceable.
I think small claims is a better way to go, but be prepared to lose your slip at that marina. Saving insurance is more important in this case and small-claims should not affect your ability to get/continue insurance.

[SailingHarmonie]

Originally Posted by Statistical

On a related note given your uncertainty of filing a claim for modest amounts (a reasonable concern) you might as well max the deductible going forward. Most people don't file claims for small amounts for this exact reason which means a low deductible is largely useless. If someone boat is a total loss they absolutely will be filing a claim and won't care about a $500 vs $5,000 deductible.

^^^^^ Exactly this! It is a very bad idea to PAY for a low deductible, and then never have a situation where you will use it!

Insurance should be about coverage for things that are too expensive to pay for.

[Knotical]

Is your boat stored on the hard at that yard/marina? If yes, factor in their delay tactics with any court win you may have which will make your boat unusable for a given time.

[DEAN2140]

My advice is to file a claim with the small claims court. I've done this in other circumstances and found that the other party is usually willing to settle to avoid the hassle. In this case, I bet they will offer to fix it themselves. You have nothing to lose but a nominal filing fee. If you do end up in court, you will probably have to retain an "expert", ie, someone who works in a boatyard, to explain what happened to the judge.