Many people would probably view the theft of a boat as a fairly uncommon occurrence. Even if the perpetrators had skills worthy of a world-class jewel thief, what would they do with a boat after a heist? A stolen boat isn’t something that’s easily hidden curbside or in a driveway. Boats tend to be large, unwieldy objects that can’t be disposed of easily. This might be abundantly clear to anyone who ever thought of simply giving a boat away when its upkeep became financially unmanageable. There’s proof of this throughout many boatyards, where 1970-era boats sometimes display signs that read, “Free Boat.” The chalky topsides, spongy decks, and unraveling rub rails of these once-proud vessels make it difficult to imagine that some fifty years ago, they once sparkled as brightly as the photos in their boat show brochures.
But while an old cabin cruiser whose soggy wooden keel has the consistency of a wet telephone book is safe from being stolen on a moonless night, newer vessels on trailers remain susceptible to theft. And whether or not an owner is reimbursed for a loss through insurance could depend on how underwriters drafted the policy. Insurance policies can be narrowly written. This means that rather than yielding a result of, “We’re sorry your boat was stolen. Don’t worry about it; a check will be in the mail in two days,” the outcome is more likely to involve a review of a number of very specific conditions in the policy. And if these conditions aren’t met, the theft of the boat might not necessarily be covered.
In one such incident, a boat on a trailer was stolen when it was briefly parked outside a grocery store while enroute to Key Biscayne for launching. The truck and boat were forcibly stolen, and the theft was reported to the insurance carrier. The insurance policy contained a number of exclusions that would result in non-payment of a claim. One of the exclusions read: “Theft of the scheduled vessel and or its equipment whilst on a trailer/boatlift/hoist/dry storage rack unless the scheduled vessel is situated in a locked and fenced enclosure or marina and there is visible evidence of forcible entry and or removal made by tools, explosives, electricity or chemicals.” Another exclusion of the policy was as follows: “Damage sustained by scheduled vessel whilst being transported over land (whether by trailer or another method of conveyance approved by us in writing), more than 100 miles from the normal place of storage, as disclosed within your application form.”
The truck was recovered but the boat was not. The insurance carrier denied payment for the theft. When the matter made its way into a Florida District Court, the court sided with the owner regarding the provision about being more than 100 miles from a normal place of storage. The court found the provision ambiguous in the context of what would happen if the owner made a brief temporary stop. The court construed the ambiguity against the insurance carrier and ruled in favor of the boat owner.
When the case was appealed, the insurance carrier argued that because the vessel had been placed on its trailer, according to the policy exclusion, it was only afforded coverage for theft while located inside a locked, fenced enclosure. In the appeal, the higher court ruled in favor of the insurance carrier and supported the denial of the claim.
Many boat owners aren’t likely to lose sleep at night worrying about theft of an entire vessel. They know that anyone attempting to steal their boat from a yard this time of year would have to be an extraordinary forklift operator who could quickly move the two other boats that barricade their boat in. And the daring thief would then need to gingerly accomplish the extraction with neighboring boats offering less than 24” clearance on either side.
But the fact remains that insurance policies covering the theft of a boat could be quite narrowly tailored. The average person doesn’t often look at these provisions with a fine-tooth comb because come spring, there are a million other important things to do. But some of these provisions in a policy could be worth taking a look at.
Great Lakes Reinsurance (UK) PLC v. Vasquez, Case No. 06-21206-CIV-HIGHSMITH, United States District Court for the Southern District of Florida