IF THIS IS NOT A TOTAL LOSS, THEN WHAT IS?
Written
Without Prejudice by Linnet Woods for MarineZine.
As you may have read, in the Special Feature in our News section, or seen mentioned elsewhere in this edition, Dag
Blidback, the Swedish Olympic sailing veteran, lost his Arcona 36, 'Star Dust' on July 18th 1999 off Trinidad when she caught fire and
sank.
Dag's vessel was insured with the Guardian Insurance Company of London, a subsidiary of
Guardian Royal Exchange.
His insurance agents were Hill House Hammond and his contact there was Eileen Carter, with whom
Dag had enjoyed an excellent working relationship over many years. Hill House
Hammond had 'inherited' Dag's policy when they bought up the agency with
whom he had originally made his contract.
Within 2 days of the sinking, Dag had contacted his insurers, collected up the relevant paperwork and sent it, by Express Mail, as instructed, to the designated loss adjuster, one Peter Clark of C-Claim, who had mentioned that he would send the form but intended to be
'away for a while' which hardly inspired confidence in a prompt
conclusion, but no alternative representative was put forward, so Dag
accepted the situation philosophically.
The claim form, which the latter provided, carried a tiny, and blurred, address for return of the form but it was just
decipherable and was for a Post Office box in Essex, in south east
England.
Three or four days later, Express Mail got in touch to say that the package could not be delivered as the contract on that P.O.Box had expired in 1997.
That, quite frankly, made a very poor impression on all who were there
at the time. It smacked of a desire to 'accidentally' lose touch with a
claimant and we were and, are appalled at the use of stationery of such
a nature in such an important matter, on behalf of the subsidiary of a
company which is so big, and powerful, that it doesn't even need a
street address for mail to reach it in the City of London!
Dag contacted Eileen Carter at Hillhouse Hammond and explained the problem. She faxed him back within minutes and suggested direct contact with Guardian. He re-directed the package to Guardian, he also faxed his insurers to say that he had done so. By this time five days had passed since the incident.
A few days later, Peter Clark of C-Claim announced his intention to fly out from England and arrive in Trinidad on the 21st August.
In the meantime, Dag, was stranded in Trinidad and afraid of wearing out the
hospitality of well-wishers. He set about trying to find shelter for
rent, which search was not an easy one (see Cad Calls in the
Humour section).
Peter Clark arrived in Trinidad on Thursday, 20th August in the evening and he and Dag spent the whole of the following morning discussing the possible causes of the fire. Dag got the impression that the gentleman, who is also an investigator, is very knowledgeable on the subject of fires aboard yachts and
said that he found the man's professional approach reassuring.
Dag said he felt that Mr. Clark had appreciated his candour when he had told him that he really had no concrete idea how the fire started, only theories. The morning ended with no conclusion having been reached as to why 'Star Dust'
had caught fire but, at least Mr. Clark now knew that the claim is a genuine one and Dag
had done everything possible, while he had the yacht, to safeguard against such eventualities.
Perhaps it is routine, when a boat is lost, to send an investigator, in case a false claim is being made with the collusion of authorities. Mr. Clark explained to Dag that a certain proportion of every premium is set aside for such investigations.
Mr. Clarke left the island apparently satisfied that he had heard and
seen all that
he required to be able to report to the Guardian Insurance Company.
Meanwhile, Dag gratefully accepted a temporary position as captain of the 'Snipe', a 52' classic yacht, built in Denmark in 1952, a boat with which he was already familiar, having sailed with her in Antigua Classic Week several times, including
the previous year. He was most relieved to have a safe temporary home and cheered up enormously. While
he worked hard to make light of his misfortune, you can imagine the real grief
involved.
One Friday, as we discussed the possible reasons for the delay in the
settlement of his claim, preventing him from being able to get on with
the task of acquiring a boat with which to replace 'Star Dust ', Dag
suddenly recalled yet another treasure lost aboard. A set of handmade, inlaid ebony chopsticks he had bought in Hong Kong. Not a treasure in terms of finance, perhaps, but it's those little things that bring home to us the enormity of our losses, like the straw that breaks the camel's back. He
didn't have to express his pain for it to be palpable. There are more
than a few Britons who could learn a thing or two from Dag about
maintaining a 'stiff upper lip'.
A few days after Peter Clark's visit, he sent Dag a copy of the report he had made to Guardian Insurance. He explained that he would next be making his recommendations to the company,
(a copy of which he would not be sending to Dag). The report that Dag read seemed perfectly fair and complete and he felt this would enable matters to be speedily
expedited.
Within a few days he received a fax from Guardian Insurance but was disappointed to find that it contained only more questions. The company seemed to want information which was completely irrelevant to the
claim since, if some of the issues they enquired about were of concern to them, it seemed surprising that they had not said so, in the first place, when agreeing to take the premiums for the policy. They also wanted to see Dag's passport which could have been quite a problem, had the company been acting more promptly, since the Swedish authorities had accidentally sent Dag's new passport to Hanoi in Vietnam, whence it finally arrived, towards the end of
September!
Meanwhile, a photocopy of the original passport, which now languishes at the bottom of the sea, had been found in the files by the issuing authority and furnished to
Dag. As soon as it was humanly possible, Dag furnished the Guardian Insurance company with all that they demanded of him but still nothing was concluded.
In late September, Dag expressed concern that nothing seemed to be happening and, when we asked him if he could give us an update, to enable us to conclude this article, he suggested that we contact Guardian Insurance and ask
them for an update.
In the second week of September, we sent an e-mail from within the Guardian Royal Exchange's own website, asking the Public Relations Officer to pass it on to the Claims Controller, whose details we gave. We never received any kind of response. By the beginning of October, Dag Blidback had received no word of Guardian Insurance's intentions either. Whilst the company is under no obligation to answer questions from third parties,
we would have thought that Dag might have the right to expect some
answers.
Over the next few weeks, correspondence was filtered through to Dag, via Hill House
Hammond (who were, apparently, in the middle of a move of premises), which
did little to inspire confidence. In desperation, Dag sent a copy of all correspondence to the C.E.O. of Guardian Royal Exchange in late
November, with a covering letter asking the said executive for his
assistance in getting something done.
There was no reply to that.
He then sent a copy of all the correspondence to a gentleman at
a major marine organisation, in early December, as a mutual friend had suggested.
The gentleman is a Barrister At Law who, in spite of the holiday season
being upon us all, took the time and trouble to read all the material he
had received and to ask for further information to be forwarded to him.
His kindness was a refreshing reminder of good old-fashioned British
courtesy. He asked to see a copy of the original policy and Dag wrote to
Hill House Hammond to ask if they would please send a copy to the
barrister. He also sent the barrister a copy of the document he had been
given at the time of the premium revision, to ensure that no
substitutions were made by the agents without the barrister being able
to detect the fact by comparison.
A letter arrived from a David Brett at
Hill House Hammond within a very few days, saying that he was now
handling the file and a new offer could be made if two minor issues
could be dealt with. The wording of the letter was interesting and gave
the impression that Mr. Brett was the one to decide how much should be
offered, which would suggest that the insurance company had already
agreed to pay the full amount if it were unavoidable.
Dag replied to say
that those issues had already been dealt with if Mr. Brett cared to
review previous correspondence and that he now expects to receive the
full amount without further delays. In the meantime,
nearly six months of his life had been spent waiting for the insurance
company to honour its agreement. It should not be necessary for
clients to go through all this. In any other business, such behaviour
would result in public outrage. Ask many members of the general public
what they think of the insurance industry in general and the typical
response is "Legalised robbery" or "Organised crime,
sanctioned by governments, along with banking and similar
institutions". Is the industry aware of this image? Does it
care?
We would be very interested to hear, from marine insurers, what clients should expect from them. We would also be very interested to hear of the experiences of other readers who have made genuine claims on marine insurance
policies.
We were interested to note that, according to material on the Insurance Ombudsman's Bureau web site,
it appears that there are close links between Guardian Royal Exchange
and the Bureau and the material also contains reference to delay in paying claims as
being undesirable, suggesting that interest should be payable as of two
months after a legitimate claim has been made.
We have been embarrassed, as British citizens, that a distinguished foreigner who has chosen to invest his trust (and money) in
one of the major institutions of our country should be treated this way.
Was this inefficiency or a cynical ploy to avoid meeting their
obligations, he wondered. If the insurers thought
his claim was wrongful they should have, at least, mentioned their
doubts. They sent an investigator to establish that it is a genuine claim,
which he did (and, having seen all the relevant documentation, we cannot
see how it could be doubted) so what possible justification can there be for their failure to
get on with it and stump up the Total Sum Insured? We
were at a loss as to what to say - it didn't look very good to us,
either.
An
argument had been put forth suggesting that the Total Sum Insured was
erroneous, since the policy could only cover the initial purchase price
of the boat. When Dag had completed a major refit after purchasing the
vessel, the policy was revised and a higher premium calculated to
reflect the increased value of the yacht. Now it would seem
that the agents and the Insurers were trying to imply that the relevant
paperwork was nowhere to be seen, having been handled by the
representative of the firm H.H.H. had bought out.
Having taken those
premiums for five years the Insurers then seemed to be implying that the contract
should really be considered as null and void but that they would offer
an 'ex-gratia' payment of the equivalent of over thirteen thousand
pounds less than the Total Sum Insured!
Surely, if you buy a company
out, you honour the agreements that company has made? If paperwork is
now missing, it would suggest that homework has not been properly done
at some stage. This should not become the client's problem.
If the
mistake was made by the original agent then surely the agent who took on
the business must meet the shortfall? If this sounds simplistic and
naive, so be it. I am not exactly a spring chicken and I have
always expected to have to honour my obligations or suffer consequences
if I failed to do so. Is the insurance industry to be considered exempt
from having to do likewise?
In any other field of business, one must honour the
contracts which one makes. The insurance business seems straightforward
enough to me and I have worked in the industry, on two different
occasions, for long enough to learn that the wording of insurance
policies is usually pretty cut and dried. That people often don't bother
to read the small print is another issue, but that is not the case here.
A case like this has everyone connected with the insured wondering
whether he, or she, is being lulled into a false sense of security, year
after year, when paying premiums.
Dag lost everything except his life. Isn't that a Total Loss? Have these
people any idea of how they would perceive the situation, if they lost
their home and, literally all their possessions (barring an
un-reusable life raft, a pair of shorts, a t-shirt and a hand-held radio
worth, perhaps, about US$50 second-hand, only not actually worth anything
because the charging unit has been melted down) in a terrifying manner and, six
months later, they found their lives still in suspension?
Having paid,
in good faith, a sum of money each year to ensure that this could not
happen?
If it is going to take so long to get a claim processed that
one is obliged to find other ways to resolve ones' problems, what on earth
is the point of insuring at all? One might as well invest the
premiums in something profitable and hope to enjoy it in ones' dotage,
provided nothing ghastly has happened in the interim, if
suffering is inevitable in the event of disaster anyway!
If the insurers and their agents find it offensive that we should spell
out the details of the delays involved here, it is nothing to how
offended we are that British companies should peddle policies that
appear to have no value at all when the time comes to have to rely on
them. If they want to sue us for telling the truth, and voicing our
honestly held opinions, we will take our chances on justice still being just.
We have nothing against the company as a whole or any individual within it, but what
happened to Dag Blidback cannot be right and, if problems like this are occurring, some housework needs to be done.
Unless
names are named, what is to stop the same things happening again and
again. We have heard and seen enough to know that this is not a rare
occurrence, nor is it limited to only a few insurance companies. The marine insurance business is an expanding industry, as more
and more people take to the water. Efforts must be made to ensure that
insurance companies sell policies
which are fair and honour them when the client is behaving honourably.
Otherwise, one must ask oneself what point there is in taking out fully comprehensive insurance
for one's vessel. If one cannot put ones' trust in major
companies, how does one
decide which kind of company one can trust? We believe that insurance
companies must guard against false claims. This is not a false claim.
The rescue and the witnessing of the yacht's demise was fully documented
and we have seen official copies of that documentation.
We believe that
there are careless and even unscrupulous people around, who pay a couple
of premiums before accidentally, or otherwise, losing their vessels and
claiming on their policies. They deserve worse than to remain unpaid.
Such behaviour is immoral and causes all of us to suffer higher premiums
and cynicism from our insurers. This case falls into neither category. We
were moored on the same jetty as 'Star Dust' for many weeks prior to her
departure on her last voyage and witnessed the constant attention and
effort expended by Dag Blidback on the maintenance of his vessel and her
systems.
Along with other neighbours, we considered him an exemplary
captain and his boat a model of good maintenance practices. He had been
insuring Star Dust with this company for several years and does not
appear, even to a jaundiced and cynical judge of character, to be the sort of person who would
ever stoop to an insurance fraud.
He was
clearly not to blame for what happened to the yacht and certainly had
nothing to gain by having her burn and sink.
Even with the Total Sum
Insured at his disposal, Dag cannot possibly recoup the value of what he
has lost. A comparable boat, in comparable condition, would cost way in
excess of the insured value. This is quite without counting the value of
the personal property which was contained aboard the vessel, in
financial and other terms.
Racing trophies and limited edition yacht models, for
example, melted down by the fire and which cannot be replaced.
In the interests of fairness, we will be glad to publish anything relating to
this matter or to marine insurance in general, which the Guardian Royal Exchange, or any of its subsidiaries, care to send us for
publication or anyone at all desirous of putting the case for the
insurance industry.
When we first started following the progress of this claim, it was in
the belief that we would be able to report on Dag's progress in finding
and acquiring a vessel with which to continue his journey towards the
Panama Canal and into the Pacific, in time to start the New Millennium
where he wanted to be, or at least well on his way there. The first part
of the article was published in a pilot edition of this magazine, in September 1999, two months after the incident and one would have thought the
insurers would have made some effort to act promptly for the sake of the
potentially good publicity to be gained out of seeing a client
documented as being sent on his way satisfied.
The story of Dag's misfortune was also published in the Boca magazine, distributed in the Caribbean
(and,
we gather, elsewhere too), amongst others.
When Dag mentioned media
interest in his case, his insurers, quite insultingly intimated, in a
letter to him, that he
might be trying to put commercial pressure on them!
Christmas came and went, as did the New Year. Quite some time
afterwards, as a direct result of the intervention of an eminent
Barrister at Law, working for the most powerful yachting
organisation in Britain, the claim was, finally, settled. We wonder
what would have happened had he not been so kind as to intervene.
Dag was last seen travelling in the Far East, still in search of a suitable vessel
with which to replace 'Star Dust'. We look
forwards to receiving news of a new boat sometime soon.
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