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Sea Journey Triumph: Boat Owner Defeats Insurance Denial

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In a display of seafaring solidarity, a craft owner succeeded in overturning his insurance company's rejection of his claim following a challenging marine episode.

The insurer, RAC Insurance, originally contended the claim on an assertion that pre-existing structural and mechanical deficiencies were to blame for the perilous event that led to the boat requiring rescue.

However, an authoritative decision countered this conclusion, highlighting a drastic weather encounter as the primary antagonist in the vessel's struggle at sea.

The boat in question, hailing from 1971 and a former asset of the Darwin Port Authority, had changed hands with a certain shipwright, identified only as EP, who assured the new owner of the vessel's readiness for the deep blue. With an optimistic heart and eager eyes set on refurbishing the watercraft in Perth, the owner heeded the words of EP and a marine mechanic's favorable report, entrusting a capable crew and captain with the navigation from Albany.

Commencing their travel under the grace of hospitable skies at approximately 1AM on December 12th, 2022, the crew were not long underway before the weather's mood turned sour, unleashing winds that escalated with mercurial rapidity. As the elements waged their assault on the vessel, her engine yielded, and amidst the chaos, a migrating stove inflicted further harm upon the cabin's welfare. The beleaguered boat found salvation only through towed rescue yet continued to battle water onboard relentlessly.

An assessor appointed by RAC Insurance, known in records as AK, placed scrutiny upon the watercraft’s generator, noting pronounced rust as evidence of a historical absence of the alternator belt, and pinpointed this fault as the catalyst for the electrical system depleting the engine's vitality. AK further observed the boat's explicit vulnerable points that betrayed its integrity to the water's invasion and critiqued the choice of electric over mechanical bilge pumps.

Per these observations, RAC Insurance stood firm in their choice to decline the claim, invoking policy stipulations disallowing compensation for mechanical failures and deterioration through usage. Nevertheless, the stance adopted by the insurance experts found itself overturned when the Australian Financial Complaints Authority interjected with an assessment fortified by EP's logically structured report confirming the vessel’s suitability for seafaring.

Strengthening this alternate perspective was the captain's assurance of the engine's sound condition, corroborated by a marine mechanic who surveyed the ship prior to its departure. With meteorological reports attesting to gales exceeding 60kmh giving rise to formidable waves ranging between 5.5 meters and 7.5 meters in height, a "significant weather event" became evident. Furthermore, the Complaints Authority rebuked AK's suggestion that the introduction of electric bilge pumps was a foreshadowing maneuver for expected water ingress, citing a dearth of evidence to underpin such a claim.

In a ruling that resonated like a beacon of maritime justice, the boat emerged victorious and seaworthy at the onset of its trial by water, with an "insured event" dubbed the true culprit of the ensuing hazards. Consequently, RAC Insurance found itself obliged to embrace the claim, navigating the rightful course per their policy’s terms and conditions.

Published:Friday, 9th Feb 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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A legal principle that stipulates that insurance policies should restore the insured to the financial position they were in before the loss.

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