A Tale of Two Exclusions

 

When it comes to insurance policy language and exclusions, most would assume less is better.

That is, a briefly worded exclusion probably excludes LESS than a more lengthy one. When it comes to Marine Insurance this isn't necessarily the case.

Consider the two exclusions in the box below. At first glance, one might assume the shorter exclusion on the right is likely to be less restrictive.

 

Part D: Property Damage Coverage 2. EXCLUSIONS: We do not provide property damage coverage against or resulting from: a.wear and tear, deterioration, mechanical or electrical failure, improper repair, corrosion, weathering, insects, mold or mildew, animals, vermin, or marine life damage. However, this does not exclude a consequential loss to your Boat resulting from the burning, collision, demasting, sinking, or stranding of your Boat due to the losses otherwise excluded in this Part D: Property Damage Coverage, Section 2a;

Part D: Property Damage Coverage 2. EXCLUSIONS: We do not provide property damage coverage against or resulting from: a.wear and tear, deterioration, mechanical or electrical failure, improper repair, corrosion, weathering, insects, mold or mildew, animals, vermin, or marine life damage.

 

After reading these two exclusions, ask yourself which exclusion is less restrictive. If you picked the one on the left, you are correct because it gives back coverages for consequential coverages listed. The exclusion on the right has become standard policy language in many boat policies and does not provide coverage for consequential losses. Considering that potential "consequential" losses could occur on top of the initial incident, this exclusion leaves the boat exposed to significant uninsured losses.

Depending on the age and type of vessel, there may be no policy available with better coverage, however it's important that you understand the coverage you have and if you are able to secure a policy with the exclusion on the left you will be far better protected.

At Fitts Insurance Agency, we pay attention to details such as these and we work closely with our marine insurance providers to strive to provide access to the best possible protection for our customers.

Just as with Home and Auto Insurance, the difference is in the details. Insurance companies who spend millions of advertising dollars promising low cost may be achieving their low cost by eliminating important coverage. Your grandfather told you a long time ago that the lowest price is never your best bet. When it comes to insurance, that rings true. The lowest price will almost always come with inferior coverage.

Don't trust your insurance coverage to the provider promising to be the lowest price. If you're faced with an uninsured loss, then that lowest priced insurance ends up costing you thousands of dollars more.

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