The New York Attorney General's 2004 insurance investigation revealed compelling evidence pointing to the widespread practice of bid rigging and other improper transactions perpetrated by ACE, AIG, and Marsh, among others. ACE avoided a trial by paying a large settlement, agreeing to significantly change its business practices, and the company issued a formal apology to consumers who had been victimized.
Owner Pegs Yacht Damage at $1.45 million; ACE Trims it by $1,449,200
October 26th, 2015 - The owner of a charter yacht has sued ACE American Insurance Co. after it offered him 0.05 percent of the damages and losses to the vessel that he contends are owed.
Daniel Matthew Voorhees and Broadwater Marine Ltd., said that they bought a marine insurance policy from the ACE Group unit in 2014, as they were acquiring the 163-foot M/Y Inevitable. The policy covered damages, expenses and reimbursement for lost charter income.
The 25-year-old luxury yacht, which cost Broadwater $9.5 million, was renamed the M/Y Broadwater and underwent what was said to be an extensive pre-purchase survey and sea trial. Results of those tests were shared with ACE, which issued the policy and gave the owners five months to make certain repairs.
On its voyage from Nassau, Bahamas, to Fort Lauderdale, Fla. the yacht experience sudden engine and power system failure that resulted in “significant damage.”
Owners spent nearly $1 million to affect repairs. Further, they had a contract to charter the vessel for $450,000 but had to cancel that agreement. Yachts of this size – it sleeps 10 and can carry a crew of 13 - can cost $200,000 a week to charter.
Owners submitted a claim to ACE, which initially disclaimed any obligation to pay for damages that they said were the result of pre-existing conditions. The insurer later rescinded that disclaimer and asked the owners to submit a proof of loss form.
Meanwhile, the M/Y Broadwater sustained separate damage to its hull and propulsion system in November, 2014, while docked at Fort Lauderdale.
ACE reportedly said that the November, 2014, damage fell below the policy’s deductible limit, and on June 24, 2015 it sent the owners a check for $800 to cover other damages.
The owners asked for arbitration, but ACE refused, saying they had waited too long to request it.
So now, the owners have sued ACE in U.S. District Court in Milwaukee. They accused the insurer of breach of contract and good faith and fair dealing. And they said ACE cannot stand by a one-year time limit on requesting arbitration because it had continued to ask them to submit claims of loss.
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