Debarred from the Alternative Dispute Resolution System?
17 years ago
Debarred from the Alternative Dispute Resolution System ?
Some Insurance Companies in Spain debar their pleasure boat-owning clients from the Alternative Dispute Resolution (ADR) scheme that have been developed across Europe for the protection of the Consumers.
This is done by taking advantage of an article in the Insurance Laws, which classifies a pleasure boat insurance as a High Risk . (Spanish Law 50/1980, Art.107.2 y Art.44.)
These companies neglect the distinction between el pater familias , who only uses his boat for his personal and private recreation, and the ordenado comerciante who uses his boat to earn money.
THE ADR SYSTEM DOES NOT INCLUDE HIGH RISK .
In addition, the Insurance Companies get the benefit of libertad de pactos , which implies the right to choose a judge and jury who might read the Lawbook as the Devil reads the Bible. It´s not surprising that THESE INSURANCE COMPANIES ARE IN THE HABIT OF REFUSING TO TAKE PART IN DISPUTE RESOLUTIONS OUT-OF-COURT (ADR). (Only a scarce 6,3% of the Spanish Insurance Companies are coherent with the ADR-System.)
That leaves no other alternative to the discontented client with a damaged boat, but to take legal accions against the insurance company. This procedure is often very costly, lengthy and tiring. Most people give in and pocket their pride. ( Every year about 1500 pleasure boats suffer such grave accidents in Spanish waters, that rescue actions by the Spanish Salvamento Marítimo are necessary. More accidents happen in marinas and boat yards, not accounted for in the statistics.)
Pleasure-boat owners, who only use their boats for private use, are not aware of their weak position PREDESTINATED TO LOSE - until they have a disagreement with the company.
Then they discover they do not even have the right to legal aid included in their boat-insurance.
Legal aid usually is included in a common Consumer Insurance (car- house- property-or travel-insurance, etc.)
EU HAS EXCLUDED THE RIGHT TO HAVE A LEGAL EXPENSE INSURANCE INCLUDED IN A COMMON PLEASURE BOAT INSURANCE IN RESPECT OF DISPUTES OR RISKS ARISING OUT OF THE USE OF SEA-GOING VESSELS. (Directive 87/344/CEE.)
The contract says nothing of these conditions.
The issue of insurance-disputes hereby seems to be assigned to Rules with roots in the Maritime Insurance Laws, which are certainly not as consumer-friendly as the European and Spanish Laws for the Protection of the Consumers and Users .
Many of the Rules in the Maritime Insurance Laws have their origin in the circumstances prevailing in the 19th century, when it was a trend amongst unscrupulous ship owners to cheat their insurance companies by overvalue their cargoes and overloading their ships, and which finally resulted in the famous Plimsoll-Rules .
Now it appears as if unscrupulous insurance companies adopt a trend of cheating small pleasure-boat owners, by the use of paragraphs referring to these Maritime rules.
Pleasure boat owners, who only use their boats for their own pleasure and recreation, in general believe that their pleasure boat-insurance is as Consumer Insurance IN THE INTENTS OF THE LAWS FOR THE PROTECTION OF THE CONSUMERS AND USERS , and not as a Maritime Insurance in the sense of the Maritime rules.
Thats why the pleasure-boat owners are easy prey for these companies.
And also why these companies top the insurance companies´ League of Reclamations.
The European Consumer´s Centre is aware that here does exist a flaw in the legislature and considers it a duty for the Spanish and European Authorities to take the matter up.
Awaiting such actions I publish these lines to launch a debate and spread knowledge about the exposed position, in which the owners of pleasure boats find themselves in case of a conflict with the insurance company. The motive is also to provoke a change in the legislature that will distinguish clearly between the Laws concerning pleasure boats exclusively for private use, and the Laws concerning pleasure boats engaged in commercial activities. (charter, transport, competition,etc.)
This ought also to be a task for Nautical Clubs and Associations and Nautical media sources to encourage.
Ake Gustavson (Don Quijote del Mar) E-mail: [email protected]
Don Quijote del Mar. (76)
The patient died because the doctor went to a party.
A small Swedish pleasure-boat got stranded on a beach on Ibiza in a sudden storm.
The Insurance Company, which under the veil of discretion will be named MALFÉ in this true story but can be any company adopting these rules, was contacted immediately and promised prompt salvage actions.
Salvage was then delayed six (6) days, during which the boat bumped against the rocks by every wave and received more damage! The boat was then salvaged and transported in a very unprofessional manner to a boat-yard chosen by MALFÉ and received still more damage!
MALFÉ could now be sure that the repair costs would exceed ¾ of the insured value and thus be considered as total constructive loss .
In addition MALFÉ suddenly considered the boat underrated. In spite of MALFÉ´s own valuation of the boat a few years earlier, in accordance with the owner and the current market value.
When the tender for the repairs finally arrived (after 24 days) from the MALFÉ-picked boat-yard, it was impudently high priced.
A comparison with a well-reputed boat-yard on the Spanish Mainland showed that the repairs could be done on the Mainland for less than half the price, and for well under ¾ of the insured value.
The boat-owner felt as caught in a trap.
The MALFÉ-picked boat-yard demanded an absurd sum for releasing the boat from the boat-yard.
The transport from Ibiza to the boat-yard on the Mainland would be very expensive.
So MALFÉ´s offer of indemnity for total constructive loss was reluctantly accepted.
MALFÉ then made HUGE DEDUCTIONS FOR INSURED BUT UNDAMAGED EQUIPMENT (rafts, autohelm, VHF etc.), SAVAGE AND TRANSPORT, and told the boat-owner that he was still owner of the boat and its equipment and responsible for all pending and future costs from the MALFÉ-picked boat-yard.
The indemnity was appealed against to MALFÉ two times. Also appealed to the Spanish consumer organization OMIC and to Dirección General de Seguros (DGS). All in vain.
A few weeks later the boat-owner visited Ibiza by car to pick up the insured but undamaged equipment (raft, autohelm, VHF etc.), which MALFÉ had DEDUCTED FROM THE INDEMNITY. When he came to the boat-yard, the MALFÉ-picked boat-yard owner PREVENTED HIM FROM PICKING UP HIS BELONGINGS FROM THE BOAT!
Enlightened by these experiences the boat owner now donated the boat to a Navigation School on the Mainland in exchange for the pending and rising demands from the MALFÉ-picked boat-yard.
Besides these demands and after being repaired, the boat received a total renovation, inside and outside, and a complete official survey for a Sea-Worthiness-Certificate and a Spanish Matriculation.
From a reliable source, the total expenses for all these jobs, including the surveys, did not come up to the total costs, demanded from the Swedish boat owner - for the repairs alone.
Boat owners and others ought to be able to draw their own conclusions from this true story and may receive more details from the editor of this publication.
The motive of this article is to warn pleasure-boat owners of the perils in their boat insurance, if the insurance company considers the insurance as a high risk and does not dare to face an ADR-court and, hopefully, also to initiate a debate on the subject
What more can this boat owner do?
Don Quijote del Mar (76).
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