Va. SC: Man who sunk own boat covered by insurance

By John O'Brien | Mar 14, 2007

RICHMOND - A recent Virginia Supreme Court opinion ruled against Allstate's claim that it should not have to pay a policyholder who sunk his own boat when he used a rake handle as a plug to substitute for closing a valve.

Negligence is covered under the policy, the unanimous March 2 opinion penned by Justice Donald Lemons says. Allstate argued that the sinking was caused by an attempt at repair, and that only fires and/or explosions that are caused by repairs are covered by the policy, not sinkings.

The decision upheld a $40,766 award to Elsie and Albert Gauthier.

"Exclusions in insurance policies must be read narrowly in favor of coverage," Lemons wrote. "If Allstate intended for negligent acts that occurred while in preparation for repairs to be excluded, it needed to use language clearly accomplishing that result."

Albert Gauthier had disconnected a water pump from the boat in order to take it to be repaired, then, "Instead of closing off the seacock (valve), Mr. Gauthier put a plug made from a handle of a rake in the hose and secured the loose end in a position above the water line to prevent water from flowing through the tube and secured it by pushing it behind a bar on the engine," the opinion says.

That night, the boat sank.

"Mr. Gauthier believed the motion of the boat caused the hose to fall and the make-shift plug to fall out," Lemons wrote. "Water then 'came into the boat through the hose connected to the Thru Hull Fitting,' causing the boat to sink."

A total loss, Allstate denied coverage, citing one of its policy exclusions that stated, "We do not cover loss to the property described in Coverage TT resulting in any manner from . . . repairing, renovating, servicing, or maintenance. Fire or explosion resulting from any of these is covered, but only for loss caused by fire or explosion."

Allstate conceded that Gauthier's negligence was a contributing factor to the sinking, and that negligence is covered. However, the company argued that the negligence came during reparations, which wouldn't be covered.

Neither court agreed, however, starting with Virginia Beach Circuit Court.

"In this case, the trial court found that the cause of the loss was Mr. Gauthier's negligence in failing to close the seacock," Lemons wrote. "The trial court further held that such actions and omissions on the part of Mr. Gauthier did not fall within the exclusions to the policy. These findings are neither plainly wrong, nor without evidence to support them."

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