What you need to look for is two very specific things.
First, you need to have someone determine the exact cause of the issue. What you are looking for is a defect that was shipped with the engine. It can’t be something that wore out. A part that was cast poorly and failed early for example. This is what we call a latent defect.
Second is to now cruise your policy. Many yacht policies do have coverage for the consequential damages of latent defects. Read carefully. Many policies will have language in the exclusions section that reads n a negative tone such as “latent defects are not excluded”, followed by a brief note “...however consequential damage is allowed...blah blah blah”. Sounds like they are telling you something negative, but it’s just the opposite. Let’s say you have $8K worth of engine rebuild because of that $50 part that failed.
I have had insurance agents forcefully tell me that did not have latent defect coverage, flossing over and ignoring the 99% that would be covered. They do this in bad faith, and on purpose. Ask about latent defect clauses, but focus on what IS covered, not the latent defect itself.
This is one of those things that many policy holders and agents won’t tell you about. Get a hold of your actual policy and READ IT. Carefully. Best thing you will ever do.
