Baltic Sea storm surge: Will the insurance companies pay for the damage?
Pascal Schürmann
· 23.10.2023
It is still difficult to comprehend what happened last Friday and Saturday. The flood of the century, which hit the Baltic coast of Schleswig-Holstein and Denmark in particular, caused immense damage in some places. It is not yet possible to estimate how much it will ultimately cost. However, many millions of euros will certainly be needed to repair flooded houses, broken dykes, washed-out roads and destroyed harbour facilities.
Countless boat owners were also affected. In several harbours, the piers were unable to withstand the rolling masses of water. Jetties were torn from their moorings and stern piles were simply not high enough, causing them to sink into the water at water levels of over two metres above the mean water level. As a result, mooring lines came loose, ships drifted off, collided with neighbouring berths, sank at the berth or were thrown onto the shore.
More about the storm surge:
Damage caused by the storm surge, even to old and small ships, quickly reaches five-digit figures
Those whose boats escaped with minor injuries were lucky. Scrapes on the ship's side, torn sail spreaders or even a torn headsail that came loose in a storm can be repaired with a reasonable amount of effort. If, on the other hand, there is a gaping hole in the hull, the bow has rubbed against the jetty, cleats have been torn from the deck or the ship has even gone aground, the amount of damage can quickly reach five or even six figures in some cases.
Then it's up to the insurance company. But does it pay without any ifs and buts?
Jonas Ball, spokesman for the boat insurance broker Pantaenius Yachtversicherungen, says: "In view of the extent of the storm surge, we currently see no reason to attribute the damage caused to a lack of care in preparation. The Pantaenius yacht hull insurance therefore covers the damage incurred for the time being in accordance with the conditions."
Andreas Medicus, Managing Director of boat insurance broker Hamburger Yachtversicherung Schomacker, also assures: "All claims are settled within the scope of our insurance contracts."
Thorsten Franz, Marketing and Communications Manager at underwriting broker Firmenich Yachtversicherungen, echoes this sentiment: "Anyone who has taken out boat hull insurance with us is covered for damage. In the event of a total loss, there is not even an excess."
The extreme flooding is categorised as a case of force majeure. Damage caused by this is insured. "And the costs for any necessary salvage of the ship and the removal of the wreck are also covered by the hull insurance," adds Andreas Medicus.
Leading insurers want to waive the defence of gross negligence
So anyone who has taken out hull insurance with a reputable provider can breathe a sigh of relief. This usually includes all-risk cover. This means that all loss events that are not expressly excluded in the small print, such as war events, are insured.
Contrary to rumours to the contrary, which have been circulating since the weekend, especially on social networks, insured persons do not need to worry that payments will be reduced or refused altogether because they did not do enough to protect their ship. The objection of gross negligence is obviously not one that the major insurance providers want to raise.
In plain language, this would mean that even those who were not with their ship before or during the storm surge, for example, in order to move it to a safer harbour or secure it with additional lines, would retain full insurance cover.
"If the major insurers say so, that's groundbreaking!" explains Heyko Wychodil, a lawyer specialising in recreational boat law. As a hull policyholder, you are entitled to the contractually agreed insurance benefit. "But," says Wychodil, "insurers may well try to accuse owners of having acted with gross negligence. For example, because they did not lower the sails or remove the sprayhood or because they used too few or too weak lines.
Smaller or foreign boat insurers could reduce or refuse payments
The fact that the leading providers are now declaring that they will pay without any objections is therefore a good thing. However, insurers that are less established in the boat sector could very well try to impute contributory negligence to affected owners. "The legal situation allows for this. But then the insurer has the burden of proof. They must first prove that the owner did not sufficiently fulfil their duty of care," says the lawyer.
Jochen-P. Kunze, another lawyer specialising in recreational craft law, emphasises that he sees no fundamental problem with the upcoming claims settlement. "A flood catastrophe like this should be covered by the hull policies that are now common in this country," says Kunze. The situation could be different for smaller or foreign insurance providers. "If their policies include individual risk cover instead of all-risk cover, you have to check whether damage caused by flooding or storms is explicitly insured."
Disputes with the insurance company threaten in the course of the damage assessment
He does not fear trouble with the insurance company so much with regard to recognising the damage event. "Disputes are more likely to arise when it comes to assessing the damage caused to the ship," says Kunze. "Particularly in the case of very high-value yachts, I would advise getting your own surveyor instead of relying solely on the judgement of the insurance company's surveyor." If at all possible, the surveyor should be present at the salvage or initial survey by the insurance surveyor in order to effectively represent the owner's interests. "In case of doubt, if no professional surveyor is available, at least call in someone with proven expertise. For example, a boat builder or sailing instructor," says lawyer Kunze. Experience has shown that this can avoid a lot of trouble from the outset.
Naturally, all those who do not have liability insurance or only have liability insurance for their boat are left to pay for their damage. Depending on the value of the boat and the type of damage, this can be very expensive. In the worst-case scenario, an uninsured boat sinks and has to be salvaged and disposed of. In case of doubt, the owner will then bear the costs.
Liability insurance alone is not enough
If, on the other hand, your own boat was damaged by a neighbouring boat that broke free, for example, you may be able to claim compensation for the damage from the owner or their liability insurance. However, you would then have to prove in court that the neighbour was at fault. Experts believe that the chances of success in such a case are rather slim.
What owners with comprehensive insurance must do in any case, if they have not already done so: Contact the insurance company or insurance broker. The next steps for determining and rectifying the damage will then be discussed together. Nobody should go it alone and immediately commission the nearest shipyard to carry out repairs.
"As a rule, affected owners whose ships are not irreparably damaged must first obtain a cost estimate from a repair yard and submit it to us," explains Jonas Ball from Pantaenius. In the case of minor damage, however, we will be flexible. For example, if an owner removes minor scratches and scrapes on the hull on their own, they can calculate the costs themselves after prior consultation and then invoice the insurance company with the corresponding receipts.
Boat builders will be working at full capacity for weeks due to storm surge damage
In many cases, however, patience will be required. In the harbours most severely affected by the floods, the local boat builders are likely to be working at full capacity for weeks and months. Nevertheless, major damage cannot be repaired without the approval of the insurance company, including a damage assessment by an expert. Even if this means that the coming season is in danger of being cancelled due to a lack of rapid repair options.
