Perils of a Pleasure Boat Insurance in Spain
How many pleasure boat owners know that many Insurance Companies in Spain refuse to face an Alternative Dispute Resolution (ADR) in case of a conflict? The boat-owners are hereby losing all help and benefits from the EU and Spanish Consumer Protection Laws.
The ADR Scheme is a fast, efficient and cheap arbitration system created for all EU-citizens (except pleasure boat owners) for Consumer Protection. The system also includes translation services at very low costs. It´s called Sistema Arbitral de Consumo in Spanish and is unfortunately voluntary for the Insurance Companies.
This exclusion of boat owners from the Consumer Protection Laws is done by taking advantage of articles in the Insurance Laws, which classifies 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 a few summer months for his personal and private recreation and leisure, and the “ordenado comerciante” who uses his boat to earn money.
THE ADR SYSTEM DOES NOT INCLUDE “HIGH RISK”.
Most people associate the insurance-related expression “High Risk” to risks that always involves millions of Euros in Insurance Indemnity Claims, as in case of an airline-crash or a passenger ship disaster. Not the small indemnity claim for the loss of a pleasure boat at the value of a Caravan car or a bungalow on Costa Blanca.
In addition, the Insurance Companies get the benefit of “libertad de pactos” which implies the right to choose applicable Laws by means of which the boat owner might find himself in a situation of inferiority and defencelessness in Court. It´s not surprising that Insurance Companies, adopting this moral code, are in the habit of refusing to take part in dispute resolutions Out-of Court through the ADR-System.
A clause in the Insurance contract might promise that conflicts could be solved by arbitration, but that does not mean arbitration through the gratuitous ADR-system, but a considerably more expensive arbitration and not including translation service. (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 actions 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 recreation, are not aware of their weak position - until they have a disagreement with the company.
Then they discover they do not even have the right to an independent “legal aid” included in their boat-insurance. “Legal aid” usually is included in a common “Consumer Insurance” (car- house- property-or travel-insurance, etc.) Neither do they have the help of a “P&I Club” as the merchant ship owners have.
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 issue of insurance-disputes hereby seems to be assigned to Rules with roots in typically mercantile Maritime Insurance Laws and Commercial Codes, 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 concerning Maritime Insurance and Commercial Codes 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 some insurance companies adopt a moral code of cheating small pleasure-boat owners, by the hidden use of paragraphs referring to these archaic Rules.
Pleasure boat owners, who only use their boats for their own leisure and recreation, in general believe that their pleasure boat-insurance is “Consumer Insurance” in the intents of the “Laws for the Protection of the Consumers and Users”, as in other European countries, and not “Maritime Insurance” in the sense of “High Risk” and Commercial Codes.
That’s 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. ￼
The motive to publish these lines is 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, tutorage etc. Spain has a special Register for commercially engaged pleasure boats. (A-6)) , besides to influence the Insurance Companies to adhere to the ADR-System and introduce fairer terms in the contracts.
The motive is also to launch a debate and spread knowledge about the exposed position, in what owners of pleasure boats find themselves, in case of conflict with some of the insurance companies.
This ought also to be a task for Nautical Clubs, Consumer Associations and Yachting Magazines and others to encourage.
I apreciate comments and opinions on this topic.
Don Quijote del Mar
Hmmm.. it seems like you post about this same issue every few months, and nothing else...
Well...DonQuixote was rather obsessed with tilting at windmills eh dawg?
Yep, five posts, all virtually identical. Axe to grind ? Trolling for email addresses ? Or just another one of those wankers who inhabitat the world of late night talk back radio ?
Does boat still float? Perfect. Insert body A into vessel B and steer a course for country C.
(That'll be a thousand Euros, please. P/M me for mailing address)..............
Perils of a Pleasure Boat Insurance.
A small Swedish pleasure-boat got stranded on a beach on Ibiza in a violent and totally unannounced storm, which stranded four (4) yachts in the area and caused twelve (12) emergency turn-outs by Salvamento Maritimo during a few dramatic night hours.￼
The Insurance Company, was contacted and promised prompt salvage actions….
Under the veil of discretion, the Spanish Insurance Company will be named “the COMPANY” in this true story, but can be any Company adapting the same moral code.
Salvage actions was 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 an unprofessional manner to an expensive boat-yard, chosen by the COMPANY, and received still more damage! The COMPANY blamed the delays on “fiestas y permisos”! ￼
The COMPANY could now be sure that the repair costs would exceed ¾ of the insured value and thus be considered as “total constructive loss”.
The COMPANY´s surveyor considered the boat underrated. The boat was insured to a value equivalent to comparable boats for sale on the Spanish boat-market and in accordance with the COMPANY´s agent in the base port.
When the tender for the repairs finally arrived, 24 days later, from the COMPANY-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 boat-yard for less than half the price and with 5 years guarantee. ￼
The boat-owner felt as caught in a trap.
The COMPANY-picked boat-yard demanded an absurd sum for releasing the boat from the boat-yard, increased the lay-up-fee 37 %, and threatened to bring the boat to a scrap-yard. ￼
The transport from Ibiza to the boat-yard on the Mainland would be very expensive.
The COMPANY´s offer of indemnity, 54 days later, for “total constructive loss”, was reluctantly accepted. A number of questions concerning the course of events were sent to the COMPANY.
The COMPANY then made huge deductions for insured but undamaged equipment remaining aboard, salvage 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 COMPANY-picked boat-yard.
A few weeks later the boat-owner visited Ibiza by car to pick up personal effects and the insured but undamaged equipment, which the COMPANY had deducted from the indemnity.
When he came to the boat-yard, the COMPANY-picked boat-yard manager PREVENTED HIM FROM PICKING UP HIS BELONGINGS FROM THE BOAT! ￼
One month later a friend, well initiated in insurance matters, told the boat owner that he was being cheated by the COMPANY and helped formulate a claim.
The claim was sent to the COMPANY and resulted in a poor consolation, called “calculation error”.
The claim was recommitted and the afore-mentioned questions repeated.
Appeals were made to the Spanish consumer organization OMIC, to Dirección General de Seguros (DGS), to The Spanish and Swedish Consumer Commissions for “unfair terms in consumer contract”, to the Spanish Financial Ombudsman (El Defensor del Pueblo). All in vain.
A clause in the Insurance Contract promised (?) that possible conflicts could be solved by arbitration procedure. An application for arbitration was sent to la Junta Arbitral de Consumo.
In a letter to La Junta Arbitral de Consumo, the COMPANY explicitly refused to take part in an arbitration and gave an empty promise to take immediate contact with the client. ￼
At the time of writing, more than three months later, no contact has been taken.
Boat owners and others ought to be able to draw their own conclusions from this true story.
My advice is: Read the rest of this article and check your Boat Insurance Contract with your Company.
For more details e-mail: firstname.lastname@example.org
The one note samba continues!
Now I understand the "COMPANY" being so difficult...the guy that grounded the boat believed he was driving his car.....:D :D :D :D :D
The car insurance COMPANY has a similar complaint there...about this guy that drove a car to Ibiza, and now claims his spark plugs are wet.....:D :D :D :D :D :D
Perils of a Pleasure Boat Insurance in Spain.
“Well, what happened to the boat?”, some reader might wonder.
To avoid losing both the boat and the received indemnity over time to the COMPANY-picked boat-yard, the boat owner donated the boat to a Navigation School on the Mainland in exchange for the pending and rising demands from the COMPANY-picked boat-yard. ￼
Besides being repaired at the same boat-yard, the boat received a total renovation, an echosounder, a speed log, new VHF radio equipment, a new life raft and rescue-equipment, a full painting job, and a complete official survey for a Sea-Worthiness-Certificate and a Spanish Matriculation. ￼
From a reliable source, the expenses for the repair-jobs did not come up to the costs demanded from the Swedish boat owner. The difference amounted to more than 3000 €. ￼
I apreciate serious comments and opinions on this topic, since I´m ignorant in jurisprudence, but quite experienced as a seaman.
Taking the case to Court in spite of being more or less broke, or keep on warning unknowing pleasure boat owners in the hope of getting a relevant opinion some day? Please read again and have a good think before you give an opinion.
Don Quijote del Mar.
1. Don't like Spain...move
2. Don't like Spanish insurance....don't buy it
3. Never try to navagate open waters to an island in a car
4. Stay off the rocks.... seriously
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