By John K. Fulweiler, Esq.
Let me ask you a question. It’s a morals question, but not the kind that’s any fun. It’s a question lathered in maritime facts, but it’ll work just as good as if we were talking about forty acres and a dead mule in Minnesota. Maybe the question should give way to the narrative, ‘cause the narrative probably has the lesson and it’s the lesson I’m meaning to clear off the wharf and get underway.
You own a boat; a big boat. Maybe it’s sixty feet or so of gleaming gelcoat trimmed in honey-hued brightwork. Sometimes you hire a captain to run your floating pride around the local waters and then up and down the coast in time with the seasons. At some point, there’s an incident where the boat gets damaged while your captain is driving; really damaged. You make an insurance claim and maybe with some encouragement (a little of that ol’ hoorah you’re known for) you get the insurance adjuster sailing in your direction and the boat gets totaled. You walk away from boating with a swagger, a smile and some serious silver in your pocket. And the captain? Well, he’s in a different position. What happens with him isn’t so nice. Your insurer maybe turns around and files a “subrogation” claim against your captain to recover what they paid you, alleging he was negligent and caused the damage.
The doctrine of “subrogation” in the way I’m writing about is where an insurance company succeeds to the rights of its insured against a wrongdoer. Insurers stand in your shoes is another way of explaining how it works. Either way, in my opinion, it’s a nasty business. For instance, when Aunty Ames reverses her new Chevy into the public library’s front entrance (‘cause the accelerator feels the same no matter the gear) the library’s insurer pays for the new entryway. Then the insurance adjuster who handled the library’s claim passes the file to the insurance company’s subrogation department. You see, the insurers have a b-side on their cash collecting hit parade. The insurer’s revenue stream isn’t limited to premium; if it can pin fault against someone then they’ll chase the alleged wrongdoer down to recoup the claim money they paid you. The library’s insurer collects the premium, pays the claim and then rolls right and sues to recover the very risk it agreed to cover. And so when Aunty Ames gets served with a Summons and Complaint, she’d better have the coin to repay the library’s insurer what it had to pay to fix the library up nice like they did.
But here’s the money shot: All’s good if Aunty Ames has her own insurance ‘cause it’ll respond to the subrogation claim, but what if she doesn’t? What if Aunty Ames kept the heat on instead of paying the premium? What if Aunty Ames is running on a fixed monthly income? What’s she supposed to do? It’s a bad situation, and one that gets us back thinking about this fact scenario we postured where your vessel gets totaled? So let me ask you this one question…You gonna make that claim?
Of course you will. You paid the premium and we both agree that if you don’t make the claim, the insurer gets a pass it doesn’t deserve. If you’re a decent sort with maybe some of that empathy your mother had, you might be able to shield someone from a subrogation claim. It could start with the wording of your insurance policy at the time of its purchase where you (and your admiralty attorney) might be able to barter language that corrals the scope of the insurer’s subrogation rights all before anything bad happens. On the back side of something bad happening, you (and your admiralty attorney) might be able to bargain with your insurer an outcome where you get paid for your claim, but the insurer waives its right of subrogation. If you’re the hired gun running around someone else’s waterborne toys, consider that good character seems in short supply these days, so hunt up an insurance policy. There are some coverages available to protect a hired captain.
Insurers have what I call sway. It’d make a neat dissertation to look at the way this corporation country functions and study how the financial interests of insurers mold our daily lives. My money says many, many of our laws (including on the maritime side) spring from lobbying efforts of insurers. I’m not saying these laws are bad; many are probably good for society. What I’m saying is that I believe people don’t realize the influence of insurers.
Oh, hang on, let me share one last insurance-related thing which I thought was interesting: my poking around suggests a large property/casualty insurance company has a 40% stake in Maui Jim (the sunglass brand around your author’s neck). A salty fact to carry you forward until my next article docks.
This article is provided for your general information, is not legal opinion and should not be relied upon. Always seek legal counsel to understand your rights and remedies.
Underway and making way. ■
John K. Fulweiler, Esq. is a Proctor-in-Admiralty representing individuals and small businesses in maritime matters including personal injury claims throughout the East and Gulf Coasts and with his office in Newport, Rhode Island. He can be reached at 1-800-383-MAYDAY (6293) or firstname.lastname@example.org, or visit his website at saltwaterlaw.com.