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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

Boat Owners Sue ACE Over Denied Damage Claim

August 4, 2014 - Owners of a motorboat that caught fire have sued ACE American Insurance Co. after it allegedly refused to reimburse them for damages caused by the blaze.

Robert and Susan DiLoreto had purchased a boat insurance policy issued by ACE and sold by a Grosse Pointe Woods, Michigan agency to cover two boats that they owned. One was a 31-foot Boston Whaler Cruiser named Peterbilt that they took out of winter storage on June 15th, 2013.

After leaving the marina, the Peterbilt caught fire. No one was injured, but the boat sustained substantial damage.

Two days after the fire, an inspector hired by ACE looked at the boat to investigate the cause of the fire. His report, issued a month later, said that  the fire had been caused by a failed seawater pump impeller that limited the ability of the vessel to draw cooling water through the exhaust system. The reported concluded that this caused the engine to overheat.

The inspector, Kevin Bache, attributed the failure of the impellers to a lack of maintenance. So on December 12th, 2013, ACE wrote the DeLoretos that it was denying the claim because the impellers had failed due to a lack of reasonable care and due diligence.

The DiLoretos have now sued ACE, in Wayne County (Michigan) Circuit Court. In their petition, they say that the fire was not due to poor maintenance but to a sudden and catastrophic event, possibly a restriction of water into the cooling system. ACE’s conclusion that the impellers failed due to poor maintenance was made in bad faith and solely for the purpose of denying the claim, they said.

ACE has breached its contract with the couple, they said. The DiLoretos asked the court to rule that they are entitled to recover the full extent of their insurable losses.

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