Monday Minute - Catastrophic Engine Failure and Insurance

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I spoke last week about insurance coverage with all the debris fields resulting from storms and heavy rains, as well as Hurricane Florence. I got great information about insurance policies from Mike Pellerin, VP and Director of Marine Insurance at BoatUS.

While I had Mike’s attention, I also asked him about catastrophic engine failure, which can happen on a new diesel, typically in the first 100 hours. Again, this same group of boaters having dinner together did not agree about engine failure as well debris fields in terms of marine insurance covering damages.

Early on after we started PassageMaker Magazine, I learned from many industry engine guys that if there is to be a catastrophic failure in a new diesel engine, it typically occurs in the first 100 hours. Cracked or poor castings, some glitch in the engine assembly process, whatever it may be. If an engine makes it past 100 hours, the window in which the gremlins of a lemon engine make themselves known, the engine is going to live a long life…with proper care and maintenance. Of the people I know who have lost an engine, needing a full replacement, this has been the case.

Mike said this is a more complex situation than hitting debris, because it requires technical inspection to assess whether this was the result of poor maintenance, wear over time, or something other than a piston just deciding to explode due to a hairline crack in the casting.

“This is more tricky and really depends upon the cause of the loss,” Mike said, “meaning it has to be sudden and accidental and not a problem that has been festering over a period of time. Our policy, as well as our competitors, do not cover losses due to gradual deterioration or wear and tear.

“And these types of losses usually take longer to investigate to determine the cause.”

If the failure is a sudden and unexpected failure, one’s insurance policy likely covers the damage and subsequent repair. But if the owner knew there was a ticking bomb developing over the past number of seasons, with odd vibrations or sounds of scoring metal on metal, and chose not to get it checked or repaired by a competent engine shop, that is a different story.

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But again, it is not black and white and requires an analysis by a trained engine professional as to the cause leading up to the failure.

Thanks again, Mike Pellerin, for being my go-to guy when it comes to marine insurance questions.

Have a great week. It’s Boat Show Time in Annapolis!