sail-world.com -- More question and answer time with marine insurance giant, Pantaenius
More question and answer time with marine insurance giant, Pantaenius
Tue, 2 Apr 2013
Going back not that far at all, we first had to ask a question to discover that Pantaenius was not a missing musketeer, but rather, one of the world’s largest sail and motor yacht insurers. Shortly thereafter, the question would become how well do you know your marine insurance cover?
Jamie MacPhail, Managing Director of Pantaenius Australia, explained the significant difference between agreed and market value, as well as how wear and tear may have a significant impact on how your current insurer dealt with some claims you may have.
He explained that Pantaenius is the only operator to be able to offer true global coverage, which would suit the Fremantle to Bali competitors for instance, and you could see why Pantaenius’ phone was ringing as loudly as the bells from the telegraph on an old destroyer’s bridge as they hunted down submarines and emails poured in as steadily as the new tide through a channel.
Talking of big guns, Martin Baum, Pantaenius Yachting Group Director has been in Australia recently, as he is very regularly, and Martin thought that now may well be the time to ask some more questions to make sure boat owners better understand their marine insurance policies.
As one of the faces of the family group behind the brand, Pantaenius, his appearances here also underscore the group’s beliefs in being truly global with their operation. ‘It is exciting to be here in Australia and it was the next logical step for the Pantaenius Group, because we are the only global provider of yacht insurance and that was always my strategic aim, after my father had built up the company within Europe’, commented Baum.
‘The sailors are not stopping with exploring the Pacific anymore, so on the one hand it is strategic expansion to have a local office here supporting our existing clientele, but it also a very good stepping stone into Australasia and then eventually the Asian market.’
‘We, Pantaenius, are finding that the Australian marine insurance purchasers are not very aware of the key factors in marine insurance and so we are helping to educate them, so they understand what they are getting or not getting for their money.’
‘Whilst maybe not the most exciting of subjects, these questions are of huge relevance to all boat owners and the more we can do to assist them make the correct decision for themselves, the better off we will all be', said Baum of the Australian landscape, which he knows a good deal about from his frequent and lengthy trips here.
‘Given the complexity of insurance and the effects of getting the wrong coverage, when you arranged your insurance, did you get insurance advice from somebody who is qualified to provide it? The Insurance Act specifically says that if somebody is going to provide financial services industry advice, which insurance advice falls under, then they have to be qualified to provide either general or personal advice’, commented Baum.
‘There are all kinds of issues that you needed to have talked about with an insurance advisor. As Jamie has said, that question of whether your policy is for a fixed value, or much more likely for market value, is very important and we see it time and time again.’
‘On so many occasions, a customer thinks a payout will be a certain value, as expressed on the front page of their document, and yet reading on they will find that it is actually the substantially less, market value. I think it is more like nine out of ten customers, as opposed to half, that have not seen this problem, until we point it out to them.’
‘In a situation like that, in the event of a total loss, your insurer could hand you the same type of vessel with similar equipment on board that was purchased today for a lot less than you paid say three years ago, and you have zero comeback on the differential of what they supplied back to you and the value of your original craft. The difference could well be several hundred thousand dollars for some owners’, said Baum.
Martin continued. ‘We are very keen for boat owners to really understand just what their policy is all about. For instance, the policies we write in Australia are an all-risk policy. These are simple to understand. If we don’t specifically exclude a peril (an event which has caused a loss), then it is automatically covered.’
‘The most common policy here is a ‘named peril policy’. With this type of policy, it has to describe all of the risks and if there is a claim, which could be things such as sinking, fire, collision, grounding or lightning, then there is cover to a certain extent, but of course there are always some exclusions’, explained Baum.
‘The problem with the common ‘named peril policy’ for you as the policy holder, is that the burden of proof lies with solely with you, whereas the burden of proof with the all-risk policy lies with the insurer.’
‘By its nature, the all-risk policy is more transparent, easier to read and you know what you are getting. It doesn’t necessarily mean that every named peril policy covers less than the all-risk policy, however. It always depends on the wording.’
‘However, our exclusions amount to eight items, which is a whole lot less than the pages and pages that are attached to most named peril policies. We always try and reinvent the wheel and become more progressive and client friendly, and the way forward is the all-risk policy.´
Martin then added, ‘What really counts, apart from the setup of the clauses and the wording, is the way that these clauses are applied by the claims manager. The difference between Pantaenius and our competitors, is that we always manage the claims in-house, so the person who sold you the policy, is also the one who manages the claim. They look at it from the perspective that they keep up their word and what they want to deliver is what they have sold to you.’
‘Claims are not always black or white. It is very often that clauses can be interpreted one way or another and there can always be some areas where you can say, was this gross negligence or not? In the end, there is always also the factor of how the clauses are applied by the claims manager and how often do they get to apply these clauses.’
‘We manage 6,000 claims each year. Now obviously when you manage that many, you know your clauses inside and out. You also know which cases are grey, when you can do a bit more and when you can do nothing. All of this actually helps to speed up the process and thereby give clear communication to the client in a more timely manner.’ ‘It is always better to tell a client straight away that you have a problem when something is not covered, rather than waiting for two weeks and telling them you will go and check or we don’t know and then coming back and eventually saying that there is no cover for that. It is all about dealing with your clients expectations.’
‘You know, it is not always this big disastrous claim that makes your reputation. It is the small, $5,000 claim, where your client will be really annoyed because it took three months to get a proper answer out of their insurer. Some may give you $2,500 straight away because they said this is normally not covered, but we managed to get you an ex-gratia payment or something like that.’
‘Pantaenius are about clear communication on what is occurring and when you will get an answer. You speak with the person directly involved and the burden of proof is not on you, but us.’
All of which is a great way to say get ready for Part II.
In the meantime, you have some more key elements to consider.
Asking a few questions now could well save you a lot of stress later on.