X.

YACHTING INSURANCE.[1] ALSO A FEW LEGAL WRINKLES ON THE STATUS AND RELATION OF OWNER TO CREW.

Footnote 1:

The author is indebted to an eminent marine jurist (commonly known as a sea lawyer) for all the information contained in this chapter.

Underwriters, as a rule, seem not particularly anxious to run foot-races after the owners of small yachts who navigate their own craft. For some reason or other the amateur skipper is looked upon by them with suspicion and disfavor. Why, I do not know, for considering the immense number of pleasure craft in commission every year the ratio of loss through wreck, collision, or fire is remarkably low. I think, if underwriters took this circumstance into consideration, they would find it in their interest to offer more attractive inducements to owners of yachts to insure their floating property.

The vast number of pleasure craft in commission on the Atlantic and Pacific seaboards, on our great fresh-water lakes, and on the large sheets of water that, like the Great South Bay, are divided from the ocean proper by a strip of sand, more or less narrow, should I think excite interest in marine underwriters, and induce them to offer attractive terms to yacht owners.

The most dangerous fire risk in New York or any other great city is eagerly sought for by the lynx-eyed agents of insurance companies. No tenement is too flimsy; no habitation exposed to the accident of a mouse and a nest of matches is too perilous for the competition wallahs of the gigantic corporations.

Bearing this in mind the owners of small craft have frequently tried, in the lack of aid from the large companies, to start a co-operative scheme of their own, but because of the want of an enterprising and intelligent organizer the project has always fallen through.

Early in the present year I was asked by a friend of mine to try to get a policy of marine insurance on a 35-foot yacht which is worth at least $4,000 as she floats—lead keel and all the latest improvements. I had the greatest difficulty in effecting the deal. As a matter of fact no insurance company jumped out of its shoes with alacrity to accept the risk. Had it been some ramshackle old schooner, rotten in hull, deficient in sails and rigging, and manned by a scanty crew, I was told there would be little or no trouble in consummating the transaction. Pleasure vessels are viewed with suspicion that they do not deserve. I allude principally to the smaller classes of craft, which underwriters steer clear of as though they were affected by a hoodoo worse than that of Friday and the thirteenth day of the month.

Marine insurance, so far as applicable to yachts, seems to be in a mixed and muddled condition. The owner of a steam yacht, commanded by a duly qualified master, and with the machinery in charge of a licensed engineer, has no difficulty in insuring his vessel at ordinary rates. As the risk is, generally speaking, not so hazardous as that of ships engaged in freight-carrying both summer and winter, underwriters, as a rule, give steam-yacht owners quite favorable terms, provided the yacht is seaworthy and well-found. A large, steel, steam yacht run under the foregoing conditions was insured up to her real value at a premium of three per cent. against losses by fire, collision, or the perils of the sea, the risk being divided _pro rata_ on the vessel’s hull, tackle, apparel and furniture, and the machinery and boilers.

The policy, in this instance, protected the yacht against the “perils of the seas, men-of-war, fire, enemies, pirates, rovers, thieves, jettisons, letters of marque and countermarque, surprisals, takings at sea, arrests, restraints, and detainment of all kings, princes and people, of what nations, condition, or quality soever, barratry of the master and mariners, and all other perils, losses and misfortunes that have or shall come to the hurt, detriment or damage of the said ship, etc., or any part thereof. And in case of any loss or misfortune it shall be lawful for the assured, their factors, servants and assigns, to sue, labor and travel for, in and about the defence, safeguard and recovery of the said ship, etc., or any part thereof, without prejudice to this insurance; to the charges whereof the said insurance company will contribute according to the rate and quantity of the sum herein assured.

“Each voyage to be subject to general average, particular average to be payable on each valuation separately or on the whole, if amounting to three per cent., or the vessel be _stranded, sunk, burnt, on fire, or in collision_. With leave to sail with or without pilots, to tow and to be towed, and to assist vessels and/or craft in all situations and to any extent, to render salvage services, and to go on trial trips. With leave to dock, undock, and change docks as often as may be required, and to go on slipway, gridiron and/or pontoon, and/or to adjust compasses, including the risk of launching.

“In case of any claim for average the repairs to be paid without deduction of one-third, whether the average be particular or general.

“General average and salvage charges as per foreign custom, payable as per foreign statement, and/or per York-Antwerp rules, if required; and in the event of salvage, towage or other assistance being rendered to the vessel hereby insured, by any vessel belonging in part or in whole to the same owners, it is hereby agreed that the value of such services (without regard to the common ownership of the vessels) shall be ascertained by arbitration in the manner hereinafter provided for under the collision clause, and the amount so awarded, so far as applicable to the interest hereby insured, shall constitute a charge under this policy.

“And it is further agreed, that if the ship hereby insured shall come into collision with any other ship or vessel, and the assured shall in consequence thereof become liable to pay, and shall pay, by way of damages to any other person or persons, any sum or sums not exceeding in respect of any one such collision the value of the ship hereby insured, we, the assurers, will pay the assured such proportion of three-fourths of such sum or sums so paid as our subscriptions hereto bear to the value of the ship hereby insured. And in cases where the liability of the ship has been contested, with the consent, in writing, of a majority of the underwriters on the hull and/or machinery (in amount), we will also pay a like proportion of three-fourths part of the costs thereby incurred or paid; but when both vessels are to blame, then, unless the liability of the owners of one or both of such vessels becomes limited by law, claims under the collision clause shall be settled on the principle of cross liabilities as if the owners of each vessel had been compelled to pay to the owners of the other of such vessels such one-half or other proportion of the latter’s damages as may have been properly allowed in ascertaining the balance or sum payable by or to the assured in consequence of such collision; and it is further agreed that the principles involved in this clause shall apply to the case where both vessels are the property, in part or in whole, of the same owners, all questions of responsibility and amount of liability as between the two ships, being left to the decision of a single arbitrator, if the parties can agree upon a single arbitrator, or failing such agreement, to the decision of arbitrators, one to be appointed by the managing owners of both vessels, and one to be appointed by the majority in amount of underwriters interested in each vessel; the two arbitrators chosen to choose a third arbitrator before entering upon the reference, and the decision of such single, or of any two of such three arbitrators, appointed as above, to be final and binding.

“This insurance also specially to cover loss of and/or damage to hull or machinery through the negligence of master, mariners, engineers, or pilots, or through explosions, bursting of boilers, breakage of shafts, or through any latent defect in the machinery or hull, provided such loss or damage has not resulted from want of due diligence by the manager.”

By the terms of the above policy no damage under $100 could be collected.

Another clause allowed the yacht to touch and stay at any ports or places, and for any and all purposes.

Another clause made the liability cover the hulls, spars, sails, boats, etc.

Yet another clause provided that a fixed sum should be returned for every fifteen days canceled and for a like number of days laid up dismantling, overhauling, repairing, etc. This, as the intelligent reader will see, is to guard against an usurious interest when the yacht is not exposed to the perils of corsairs or rovers on the deep green sea.

The collision clause generally provides that although the yacht insured may be in fault the underwriters must pay up to three-fourths of the value of the policy toward the repair of the damaged vessel or the general repairs. For example, a yacht insured for $5,000 runs into another craft and damages her to the extent of $4,000. In that event the underwriters are responsible to the extent of $3,750.

What is called the “racing clause” is sometimes added, which makes the underwriters liable for total or other loss while the yacht is in the act of racing.

A policy for $1,250 covering five months should cost no more than ten per cent. if the yacht is in good condition. Rates vary on laying-up policies covering risks from fire, falling over, etc., while the craft is out of commission.

A yacht should be insured for her full value. If insured for less the ratio which that amount bears to the true value will be deducted from the amount given as compensation for damages. Here is an English case in point. A man insured a boat for £200, her true value, as declared by him to Lloyd’s agent at the time, being £250. She suffered damages in a blow. The owner agreed to accept £25 for compensation. He was tendered £20, the explanation being that he had undertaken a fifth part of the risk on the craft himself, inasmuch as he had insured the boat for £50 less than her real value; also that as he had agreed upon £25 as compensation for the damage sustained, the underwriters could only be called upon to pay £20. An appeal to the courts resulted in a judgment for the underwriters.

It may be mentioned that English companies do the bulk of marine insurance, and that the law with regard to it is practically the same in the British Islands and this country.

After mentioning all the dangers that may cause total loss, which is fully insured against, the policy states that where only partial damage is sustained the underwriters will pay an average for the repair of such damage at the rate of 3 per cent.

The $100 clause is advantageous to the owner of a large yacht, for any damage that the craft might meet with while at sea, whether in the nature of collision, or carrying away of gear by stress of weather, would be more likely to exceed than come within the $100 limit. With small craft it is different. It would be a rather severe accident that would necessitate $100 worth of repairs. Some companies, realizing the injustice of this $100 clause, have lowered the amount to $50, but for this a slightly increased premium is demanded. I would advise all insurers of small boats to insist upon the $50 clause.

When taking out a policy on a sailing yacht, whether for coasting or deep-water cruising, no stipulation is made as to the sailing-master being provided with a license. In fact, the law does not make it obligatory for the commander of a sailing yacht to pass any examination whatever; but the skipper of a steam yacht, like the engineer, must pass the regular examination and be provided with a license. The reason for this does not seem quite clear to the layman.

The owner of a yacht, if he acts as his own skipper and engages the crew himself, has all the autocratic power of a master in the merchant marine. He can quell a mutiny with the pistol, clap a refractory “shell-back” into irons, and maintain stern discipline afloat. But happily the yachtsman is never called upon to exercise any severe measures such as those mentioned. If, however, the occasion called for the exercise of stringency the law would protect the yacht owner.

If a sailor is discharged for misconduct he forfeits the outfit provided for him by the owner. Few yachtsmen, however, insist upon this, and the discharged seaman is allowed to take his “dunnage” ashore with him, but the outfit is legally the property of the owner.

[Illustration: [Rowboat]]