Consequential damage insurance

[HarlenW]

An insurance broker gave a talk at my yacht club about “consequential damage" which is damage to the boat as a consequence of a cause that is excluded in the coverage. Most “all perils" insurance (covers all perils except those specifically excluded) doesn't cover consequential damage but his does. For example, electrolysis is not covered in most yacht policies. But, to give a worst case example, if your boat would sink as a result of electrolysis, say your prop was eaten away allowing water to enter the boat, that is called consequential damage and his policy would cover the damage to the boat but my current policy would not.

What thoughts or insights can you share regarding this? Have you ever heard of a loss of, or significant damage to, a boat due to consequential damage from an excluded cause?

Thanks!

 

[SteelClipper57]

Consequential damage? Sounds like he went into a thesaurus to get that word. He's talking about insurors paying out for damage as a result of proximate cause from a non-covered loss. It's not unique and depends on the wording of the individual policy. He's feeding you a line O' bull.

He's a broker. He has access to the same comapnies and policies as most other marine specialists agents.

Ask for the physical damage coverage pages out of a particular policy. You want to find out the scope of coverage as well as the exclusions. The wording will tell all. Look for words of "due and confined to." If you have that wording, then damage resulting from a non-covered loss will be covered. There are other wordings, but this is the one I've seen from time to time.

Hope this helps.