The Quirks of Equipment Insurance: Undercurrent 05/2004

On a recent dive, Bade Millsap of Bulverde, TX, surfaced to find he had lost his camera, which he had attached to his BC by a lanyard. It was nowhere to be found when he exited the water.

Millsap promptly filed an online claim under his DAN H2Oinsurance.com equipment policy, and soon received a request from H2O's underwriter, Fireman's Fund, asking for copies of the original purchase receipts and information showing the replacement equipment's cost. He provided these and then was informed that they would not pay the claim because the policy didn't cover such loss.

When Bade protested, they gave him the phone number of a DAN gear insurance agent, Jay Haldeman. Haldeman told him that while they had often paid claims of this sort, it was never their intent to do so. He said that the website announcing the latest version of the DAN Equipment Insurance Master Policy highlighted this exclusion and its enforcement. Bade sadly realized that he had failed to read and understand the fine print. DAN told Undercurrent that because of a high loss ratio in the initial two years, Fireman's Fund agreed to continue underwriting only with new conditions, effective for policy holders purchasing or renewing their policies on January 13, 2004. Here are the new conditions, compared with the conditions of their primary competitor, DEPP:

Unexplained Loss

DAN: Enforcement of the exclusion for unexplained loss, mysterious disappearance, or shortage disclosed upon taking inventory. DEPP: Similar wording. If you have no idea how the item was lost, it's not covered. This has always been enforced.

Dropped Items:

DAN: New exclusion for: "items lost while in your care, custody, and control - while in use both in and out of the water, dropped overboard or swept overboard." DEPP: Covers items lost under all the above circumstances. However, the insured must get a report/letter from the police, dive operator, or the like that describes the item in detail and explains how the item was lost and why it was not recoverable.

Informing Authorities:

DAN: New language that: "in the event of a loss by theft, you will notify the police authorities nearest to the loss location immediately upon discovery of the loss. Failure by you to do so shall render this insurance null and void with respect to the loss." DEPP: Has for many years required the same unless it's manifestly impossible or unreasonable, e.g., you're out in a very remote location and don't speak the local language. Sandy Hall, VP of Awry Enterprises, which handles DEPP, told Undercurrent that such situations are decided case by case.

DEPP policies start at $30 per year for $2,000 and go as high
$270 per year for $20,000 worth of coverage for loss. After that, the
premium goes up $10 per year for each additional $1,000 of protection.
(www.equipmentprotection.com). For specific questions contact
Sandy Hall at 888-678-4096 or 760-674-9655.

DAN has a minimum annual premium of $99, which buys you
$3,300 worth of protection. After that, the premium goes up $3 for
each additional $100 of coverage (www.h2oinsurance.com). For specific
questions contact Scott Norris at 800-446-2671 or Jay Haldeman
at 800-598-7161 x1350.

Bade asked that his claim be reconsidered. They eventually paid the claim, though his agent made it clear that the exclusion had been in effect and that Fireman's Fund had a legitimate out. But, because the date of Bade's policy renewal was 1/6/04, and the date that they made the exclusion clause available on the web was 1/13/04, they honored his claim. DAN has since reformatted the renewal notification to highlight the changes.

Next Issue: Readers report the results of their claims. And, do you need either program at all?