LiFePO4 Batteries Could Invalidate Your Insurance

[markpj23]

Interesting discussion in another online group about how one major insurer (starts with an M) severely reduced liability coverage after the boat owner upgraded to the new lithium batteries. Compounding that, and common to other insurers, is the reality that if your system was not upgraded and installed by an ABYC certified electrician your claim may be denied entirely.


If true, this stance by the insurer is not readily apparent in the declarations of the policy. Several claim to have been told this only after the claim has been submitted and an adjuster issued their findings. Insurance brokers / agency had no clue either.



Add to that the lack of ABYC certification for any LiFePO battery that I have been able to find, UL certification limited to individual cells and not the pre-packaged battery as a whole (ie, Grp 31, 8d packaging) and this sounds like a real mess. Throw in a quickly evolving standard (ABYC TE-13 2020) and I'm not sure which way to go. If I am correct, the TE-13 standard speaks to 'traditional' LiOn batteries which can experience thermal runaway, while LiFePO4 units cannot?



I love the new technology batteries on paper. Not sure how factoring in the insurance and professional installation to the equation will work out.


Heads up - you may be in for an unexpected battle with your insurer.

 

[twistedtree]

Unless you policy has language that prohibits use of some types of batteries, then the insurance company has no grounds to deny a claim. It doesn’t mean they won’t try, but unless that prohibit it in advance in the policy, they can’t retroactively make up new rules.

At policy renewal time, they can cancel or otherwise propose new rules that are up to you to accept or reject.

All that said, I think it’s just a matter of time before insurance companies start asking and placing rules in policies. This heightens the need to get the ABYC Technical Report TE-13 advanced to a standard (E-13). This is in progress, but I’m not clear on the exact timeline.

 

[sunchaser]

Mark
Just guessing but there is likely a back story. Some boat modifications, equipment changes and additions are not done very well and duly noted in an insurance survey. I've seen some FLA battery setups that are pretty shoddy that would raise questions during a survey.

Once onto the Internet a "grieving owner" can voice indignation that is not always on point. Our insurance expert, Pau Hana, can likely chime in.

 

[markpj23]

Mark
Just guessing but there is likely a back story. Some boat modifications, equipment changes and additions are not done very well and duly noted in an insurance survey. I've seen some FLA battery setups that are pretty shoddy that would raise questions during a survey.

Once onto the Internet a "grieving owner" can voice indignation that is not always on point. Our insurance expert, Pau Hana, can likely chime in.

Agreed. It's also quite easy to extrapolate this into ANY repairs / installations made by an owner or other non-certified tech.


Don't think that's likely, but insurers everywhere are looking to cut costs. Hence the difficulty for many in finding insurance at all... as discussed in many threads.

 

[BandB]

Mark
Just guessing but there is likely a back story. Some boat modifications, equipment changes and additions are not done very well and duly noted in an insurance survey. I've seen some FLA battery setups that are pretty shoddy that would raise questions during a survey.

Once onto the Internet a "grieving owner" can voice indignation that is not always on point. Our insurance expert, Pau Hana, can likely chime in.

There is another aspect of any form of disapproval. That is that the nonconformity contributed to the claim. So, we have stories circulating, but lack the specifics.

 

[Simi 60]

Lithium and lifepo4 are 2 different things
I can understand and agree with lithium being an issue but not lifepo4

 

[twistedtree]

Lithium and lifepo4 are 2 different things
I can understand and agree with lithium being an issue but not lifepo4

This is a really important point, and deserves some extra clarity around terminology.


Rechargable lithium-based batteries are ALL lithium-ion batteries, including LiFePO4. What varies is the more detailed makeup of lithium-ion batteries. Examples are NMC, LCO, LFC, and the one Simi is citing, LFP. LFP (liFePO4) is much more stable, smoulders rather than burns, and as such is much safer. In my opinion, it's the only type of lithium ion battery that is acceptable for house battery use on a boat, all because it is acceptably safe where I don't think the other battery types are.


So it's probably more accurate to say that lithium ("lithium-ion" if you want to be even more precise) batteries are only acceptable on a boat if they are LFP (LiFePO4). LFP isn't different from Lithium or Lithium-ion, it's just the safest form of Lithium/Lithium-ion.

 

[ksanders]

Unless you policy has language that prohibits use of some types of batteries, then the insurance company has no grounds to deny a claim. It doesn’t mean they won’t try, but unless that prohibit it in advance in the policy, they can’t retroactively make up new rules.

At policy renewal time, they can cancel or otherwise propose new rules that are up to you to accept or reject.

All that said, I think it’s just a matter of time before insurance companies start asking and placing rules in policies. This heightens the need to get the ABYC Technical Report TE-13 advanced to a standard (E-13). This is in progress, but I’m not clear on the exact timeline.

What about the typical language that includes an exclusion for

Improper maintenance
improper upgrades

Either of these clauses could theoretically be used to deny a claim, but only if the claim was a result of that maintenance or upgrade

 

[DCDC]

Add to that the lack of ABYC certification for any LiFePO battery that I have been able to find, UL certification limited to individual cells and not the pre-packaged battery as a whole (ie, Grp 31, 8d packaging) and this sounds like a real mess..

Lithionics builds and markets an extensive line of LiFePO batteries, BMS’s and accessories that are UL and UNDOT certified. Located in Clearwater, FL

https://lithionicsbattery.com/safety/

 

[markpj23]

Lithionics builds and markets an extensive line of LiFePO batteries, BMS’s and accessories that are UL and UNDOT certified. Located in Clearwater, FL

https://lithionicsbattery.com/safety/

Thanks for that

 

[CharlieJ]

ABYC TE-13 is in its final review process and will probably be issued as E-13 Lithium Ion Batteries in the normal updating cycle in July 2022. Hopefully this will clear the air as a lot of work has gone into developing it.

 

[twistedtree]

What about the typical language that includes an exclusion for

Improper maintenance
improper upgrades

Either of these clauses could theoretically be used to deny a claim, but only if the claim was a result of that maintenance or upgrade

I think it all depends on the full language of your policy. I just did a check and my Travelers policy has no exclusions related to maintenance or upgrades. But that's just one policy.

 

[markpj23]

ABYC TE-13 is in its final review process and will probably be issued as E-13 Lithium Ion Batteries in the normal updating cycle in July 2022. Hopefully this will clear the air as a lot of work has gone into developing it.

Wondering if this new standard will include the 'new' technology LiFePO4 batteries as well? Totally different from the other lithium ion technologies as you know.

 

[sunchaser]

I think it all depends on the full language of your policy. I just did a check and my Travelers policy has no exclusions related to maintenance or upgrades. But that's just one policy.

We've Travelers as well and noted the same. But, Travelers could request an insurance survey (they haven't on our vessel) following a claim and surveyor could pass on a deficiencies subject or two.

 

[markpj23]

This is kinda the main point of my original post.



Policy language & declarations do not address this issue directly. The insurance adjuster(s) have reportedly raised the issue when investigating the claim.


Insurance brokers and front-of-house sales staff are not the ones who decide what may invalidate the policy and/or claim.


You could likely fight an adverse decision, but it would still be a fight.

 

[twistedtree]

Wondering if this new standard will include the 'new' technology LiFePO4 batteries as well? Totally different from the other lithium ion technologies as you know.

It is neutral/independent of the particular battery chemistry. All the differences are captured by referencing the battery manufacturer's specs and requirements, and those reflect the differences between LFP and other lithium-ion variants.

 

[twistedtree]

We've Travelers as well and noted the same. But, Travelers could request an insurance survey (they haven't on our vessel) following a claim and surveyor could pass on a deficiencies subject or two.

Agreed, but I don't see anything in the language that would relieve them of responsibility. They would have to argue (and might) that an upgrade was willful negligence or an illegal act. If you took 5 untested battery packs out of Tesla wrecks, hooked them up with jumper cables, and say "hold my beer and watch this", then you might have a wilful negligence issue. But an installation done with any reasonable design consideration and construction practices I think would be a real hard sell as being willfully negligent.

 

[twistedtree]

This is kinda the main point of my original post.



Policy language & declarations do not address this issue directly. The insurance adjuster(s) have reportedly raised the issue when investigating the claim.


Insurance brokers and front-of-house sales staff are not the ones who decide what may invalidate the policy and/or claim.


You could likely fight an adverse decision, but it would still be a fight.

I think this is always a risk with insurance of any kind, and where reputable insurers differentiate themselves from the slime balls.


An adjuster's assessment is only one person's opinion and is subject to challenge. You don't have to accept it. And any statements about "it's our normal practice or policy to do xyz" is BS. The terms are in the contract, not some internal policies and practices handbook.


I have heard of insurance companies that always throw a lot of crap your way, reduce values on things, and chisel away in their settlement offer. The biggest mistake you can make is to accept a settlement that you don't think is fair or correct because once you do accept it, you are typically agreeing that it's a full and complete settlement. I encountered this a long time away with a break-in loss at a second home.


Worse case the insurance company takes a hard line, gambling that you won't sue them. Unfortunately, accepting whatever they offer is often the better financial decision vs suing so the insurance company gets away with ripping you off.


Good insurance companies reach fair settlements and pay up.

 

[CharlieJ]

twistedtree

It is neutral/independent of the particular battery chemistry. All the differences are captured by referencing the battery manufacturer's specs and requirements, and those reflect the differences between LFP and other lithium-ion variants.

Absolutely correct.

 

[Iggy]

What I am finding is, see below. Plus there needs to be a light and/or audio alarm warning that the BMS is shutting down the battery/s before it happens. Which makes sense! So you don't loose power and switch over to a back-up supply. In my case it would be my starting bank.

E-10 Storage Batteries
Scope: This standard addresses the selection, installation, and wiring of storage batteries. This standard applies to storage batteries used in direct current (DC) electrical systems on boats that operate at potentials of nominal 60 V or less.

NOTES:
1. The United States Coast Guard has promulgated mandatory requirements for batteries in 33 CFR, Subpart I, Sections CFR 183.420 (a), (b), (c), (d), (e), (f), and (g). Refer to the CFR for complete, current federal requirements.
2. Lithium ion battery systems and supercapacitors pose different risks from those encountered with lead acid batteries and should only be installed and maintained in accordance with manufacturer’s recommendations (for lithium ion battery systems see ABYC TE-13, Lithium Ion Batteries).

See https://marinehowto.com/lifepo4-batteries-on-boats/2020-10-08_10-34-31/

The way I see it, as long as the boat/install meets ABYC standards we are fine.

Just an FYI: So batteries like Battleborn do not meet these standards since it can not warn the Capt that the BMS is shutting down.

 

[ksanders]

I think it all depends on the full language of your policy. I just did a check and my Travelers policy has no exclusions related to maintenance or upgrades. But that's just one policy.

My Geico policy has language excluding direct and consequential loss due to incomplete or improper upgrades or maintenance.

I have never worried about that language but will be looking at the contract closely when I change carriers this summer.

I do not, and will not support Geico's cutting the independent agent out of the insurance business. Even if they had the best policy at the lowest price I will always support my independent agent.

 

[JLD]

My guess is that there is a lot bigger risk of a boat fire due to improper/ faulty wiring than the use of LiFePO4 batteries. Does anyone know of any instances where a boat loss was due to LiFePO4 batteries?

Jim

 

[twistedtree]

My guess is that there is a lot bigger risk of a boat fire due to improper/ faulty wiring than the use of LiFePO4 batteries. Does anyone know of any instances where a boat loss was due to LiFePO4 batteries?

Jim

CharlieJ asked just that in another forum and I don't think any were identified. Charlie?


And I agree with your risk assessment with respect to LFP. Just compare to lead acid batteries that we all happily accept. Yet they emit hydrogen, one of the most explosive gases on the planet. They are filled with sulfuric acid, one of the most corrosive substances on the planet, and are filled with lead, one of the most toxic substances on the planet. But LFP is dangerous - not.

 

[twistedtree]

Just an FYI: So batteries like Battleborn do not meet these standards since it can not warn the Capt that the BMS is shutting down.

At least at the moment that is a Note (informational), and a "should" not a "shall", so suggested but not required. Personally I think it's the big thing that's missing from drop-ins, and it seems like such an easy thing to make available, and would address so many issues.

 

[CharlieJ]

@twistedtree #23
You are right, I have posted a query regarding know fires on LFP equipped boats, with citation several times over the last 5 or 6 years. As I recall there have been one or two "I heard about..." and that was it.

As a Technical Information Report such as TIR-13, "should" is used since it is an informational document. As the TIR is converted to a Standard, the "shoulds" become "shalls" and information only verbiage becomes a Note.

 

[BandB]

I do not, and will not support Geico's cutting the independent agent out of the insurance business. Even if they had the best policy at the lowest price I will always support my independent agent.

So, am I to assume, you're opposed to Allstate, State Farm, Progressive and any others who do not use independent agents?

 

[BandB]

I saw insurance adjusters referenced above. Keep in mind that many, if not most, lack technical knowledge at the level sometimes required. However, they do look at electrical causes of fires and will examine batteries and chargers, and they attribute many fires to batteries and charging systems and electrical wiring. The fact that a few of those are LFP doesn't really say anything. They've likely attributed more fires to charging of cell phones, tablets and laptops.

A couple of comments.

1. What they say isn't necessarily so.

2. Opinion of cause of fire doesn't necessarily place any blame or negligence.

3. Fault doesn't necessarily lead to legal fault.

Kitchen fires happen regularly and are often negligent in some way but don't invalidate the policy or claim. Smoking in bed has burned many houses down, but unless some policy prohibition against smoking wouldn't invalidate the claim.

Most fires are preventable. We study and learn. We access causes. However, none of that invalidates claims. If insurers didn't have to pay for insured error, then guess we'd never have an automobile claim paid.

 

[sunchaser]

I just queried our insurer on LFP. They said what batteries we choose to use is a personal choice. And yes, they understand Li vs FLA vs AGM etc.

On a personal basis, battery type choices are largely hassle factor decisions. Safety pros or cons are largely determined by the overall system setup rather than battery type IMHO.

 

[dannc]

...
And I agree with your risk assessment with respect to LFP. Just compare to lead acid batteries that we all happily accept. Yet they emit hydrogen, one of the most explosive gases on the planet. They are filled with sulfuric acid, one of the most corrosive substances on the planet, and are filled with lead, one of the most toxic substances on the planet. But LFP is dangerous - not.

Yep, I know of two boats that had explosions from lead acid batteries while underway. One boat was plastic and sank. The crew thinks the hydrogen explosion over pressurized the hull causing water ingress they could not find and thus stop. The boat sank on it's first long voyage. Another boat, similar to the previous one, but in steel, also had a hydrogen explosion which just made a mess in the middle of a long crossing. This boat had been in use for a while when the explosion occurred and they were doing a long crossing. Both boats were no older than a year or so.

Later,
Dan

 

[NVR II Nauti]

My Geico policy has language excluding direct and consequential loss due to incomplete or improper upgrades or maintenance.

I have never worried about that language but will be looking at the contract closely when I change carriers this summer.

I do not, and will not support Geico's cutting the independent agent out of the insurance business. Even if they had the best policy at the lowest price I will always support my independent agent.

+1