That sinking feeling

Geena was out boating with her grandchildren when her boat suddenly started taking on water. Fortunately, it was a calm day, in a harbour, everyone was wearing life jackets, and Geena was able to communicate with the harbour master using her cell phone.

Everyone got to shore, but Geena’s boat and motor were seriously damaged. Geena lodged a claim with her insurer. The insurer’s assessor inspected the boat and concluded the damage was caused by wear and tear. The assessor noted that the boat was over 20 years old and did not appear to be well maintained.

Geena disagreed, saying the motor had been serviced only a month before she took the boat out and the part of the boat that failed could not have been easily seen. Geena complained to FSCL that the insurer should have accepted her claim.



The insurer referred to the policy exclusion for loss arising directly or indirectly from wear and tear. The assessor’s report, complete with photographs, showed that the boat had not been well maintained. The insurer also noted that the damage was not caused by an accident, but rather a spontaneous leak on an otherwise uneventful voyage.

Geena did not accept the insurer’s response saying she was an experienced and careful boat owner and would never have taken her grandchildren out on the water if she had been aware of the risk of sinking. From Geena’s perspective, the damage was sudden and unforeseen, and should be covered by the policy.



We agreed that the sinking was sudden and unforeseen, as required by the policy, but explained that the insurer was also entitled to consider whether any policy exclusions applied.

Looking at the assessor’s report and photographs, we could understand why the insurer had declined the claim relying on the policy exclusion for damage caused by wear and tear. While the motor had been recently serviced, there was no evidence that the boat itself had been checked. A sealant had gradually deteriorated causing the boat to take on water and sink. This appeared to us to fall within the policy exclusion of wear and tear.

We explained to Geena that we agreed the insurer was entitled to decline the claim.



Geena was disappointed but could understand why the insurer had declined her claim and agreed to discontinue her complaint.


Insights for consumers

Insurance policies usually cover sudden and unexpected loss, but not gradual damage. While the event may seem sudden to you, the underlying cause may be gradual and due to wear and tear over time. If this is the case, the insurer may be entitled to rely on a policy exclusion for wear and tear and decline your claim.