A boat owner who tried to sell his vessel only to discover it was unseaworthy has lost a dispute over a declined insurance claim.

A pre-purchase inspection, carried out in 2020, found the boat was unfit for use because of cracks and delamination.

The owner submitted a claim to his insurer, Club Marine, arguing the damage had been caused by a forklift operation or wave impact.

But the insurer declined the claim, saying the damage was not caused by any single impact and the boat is “poorly built” and failed over time.

Deterioration and delamination are excluded under the policy, so Club Marine says it is entitled to decline the claim.

The owner took the case to the Australian Financial Complaints Authority (AFCA), relying on expert reports that he says indicate the damage was caused either by a forklift or by waves.

But AFCA found that the forklift argument was discounted by two of the three experts, and they had “persuasive” reasons for doing so.

AFCA also says the policy exclusion on delamination and deterioration is clear and unambiguous.

“In all the circumstances, based on the available information and for the reasons stated the panel is satisfied the insurer is entitled to decline the claim relying on the policy exclusion which does not cover any claim in respect of damage caused by delamination or deterioration,” AFCA says.

Click here for the full ruling.