Results tagged “Marine Insurance Attorney” from Maritime Law Blog

October 6, 2010

Making the Marine Insurance Company Pay Attorney Fees for Not Accepting Your Claim

Sometimes marine insurance companies outright deny claims, but more often, they file what is known as declaratory judgment actions. A declaratory judgment action asks a federal court if an interpretation of the insurance policy -- usually an exclusion clause -- can be used to deny the claim. Depending upon the court's answer, the marine insurance company will either accept or deny the claim.

Marine Insurance Attorney Fees.jpgThe reason why marine insurance companies bring declaratory judgment actions is to avoid the punitive damages statute for the wrongful denial of a claim. Declaratory judgment actions, however, are costly for the boat owner as he or she will have to hire an attorney to fight the insurance company. To combat the expense insurance companies place on their customers in pursuing declaratory judgment actions, Florida enacted a statute which holds the insurance company liable for attorney fees should the boat owner win the lawsuit. The purpose of this law is to discourage litigation over insurance policies. Most beneficial to boat owners is that the statute is one-sided and does not allow insurance companies to seek attorney fees if they are successful.

It is interesting to note the law states it does not apply to, "insurance of vessels or crafts, their cargoes, marine builders' risks, marine protection and indemnity, or other such risks commonly insured under marine insurance policies." At first blush, it looks like it does not apply to marine insurance litigation. However, the Florida Supreme Court has found the exclusion only applies to rates and rating organizations and not to boat owners seeking attorney fees if successful in litigation.

In conclusion, if your marine insurance company files a declaratory judgment action in response to your claim, the law provides you the right to recoup attorney fees if the court rules in your favor. If you have a dispute with your marine insurance company and wish to discuss your case further, feel free to contact our board certified maritime attorneys who have vast experience in litigating marine insurance claims.

August 17, 2010

My Marine Insurance Company Required Me to Hire Contractors to Mitigate the Damage to My Yacht After the Accident but then Denied My Claim - Can They Do That?

Damaged Blue Yacht.jpgUpon receiving a claim notice, it is often times a marine insurance company's knee jerk reaction to tell the yacht owner to take all reasonable precautions to mitigate and lessen the damages or the claim will be denied. The yacht owner, wanting the marine insurance company to pay the claim, will hire various contractors to care for the damaged vessel and to undertake work designed to prevent additional damage from occurring. After the insurance company "investigates" the claim, the owner receives a letter stating coverage is denied because the owner breached one of the several warranties buried in the policy. If this happened to you, maritime law may provide recourse.

Can the Marine Insurance Company Deny My Claim After Requiring Me to Mitigate the Damage?

The answer depends upon whether the marine insurance company required you to mitigate the damage after it knew of the warranty breach. Nearly every yacht insurance policy requires the owner to minimize or prevent further damages after an accident. This is to protect the marine insurance company from having to pay more money associated with additional post-loss damage which could have been prevented. However, if the underlying claim is not covered by the policy because the owner breached a warranty, there is no obligation on the part of the yacht owner to mitigate the damage.

Many times, however, the insurance company becomes aware of the breach of warranty but, while in the process of deciding whether or not to pay the claim, requires the yacht owner to mitigate the loss. Sometimes this happens because you are a good customer and the insurance company is struggling with whether to deny the claim and risk you sending your business elsewhere. Other times the investigation report revealing the breach simply gets lost on the insurance adjuster's desk - this happens more often than you think! No matter why it happens, maritime law is in your favor. Courts routinely find if the marine insurance company knows of a reason to deny the claim and still requires the yacht owner to undertake actions to minimize or prevent further loss, the marine insurance company cannot later deny the claim. Instead, courts find that the marine insurance company waives its defenses and must pay the claim!

If your marine insurance company wrongly denied your claim and would like to discuss your situation further, please contact our board certified maritime attorneys.