'Time Aut' Owner Seeks Insurance Payout for Abandoned Ship

Wait a Minute, Skipper, Legal Experts Say

This is Time Aut. She may still be floating in the North Atlantic Ocean, slow drifting toward the British Isles.

Skipper Thomas Hagspiel said he was in regular contact with the U.S. Coast Guard beginning on December 10 when the agency issued a storm warning for Atlantic waters off the Carolinas. By then, Hagspiel’s Time Aut, a 2005 Beneteau Oceanis 523, was well over 100 nautical miles from the American coast.

Hagspiel, who had two men with him on the boat, carefully coordinated with the Coast Guard right up until the rescue two days later. He was reporting “the situation on board and weather conditions” on a three-hour schedule.

No doubt about it, the men had endured a snotty couple days, but by the time the helicopter came to the rescue them, the wind had calmed to 15 to 20 knots with six-10-foot seas, conditions that would have made for a reach all the way to the Bahamas, according to a weather router quoted in our December 22 story.

Why Was a Perfectly Good Boat Abandoned at Sea? (Videos)

Instead, Time Aut was abandoned resting on her lines, sails furled. A photo taken from the helicopter told the story.

Hagspiel later told Loose Cannon he is making an insurance claim for the loss.

“As long as the case is not closed here and with my insurance company. I will only correspond with these two institutions,” he said in a January 3 email conversation. “I have not even been in contact with my insurance company, only with my broker. I am therefore assuming that everything will be handled properly and will sort it out calmly when I am back in Europe,”

Based on current market values, Time Aut is probably valued at about $250,000.

The question for insurance experts was this: Can you collect for a total loss if you just abandon a serviceable vessel in the middle of the ocean in moderate sea conditions?

The admiralty lawyers answering the question began their answers with a caveat—they would have to read the actual wording of Hagspiel’s policy. In general, however, they said that such a claim would be a hard-sell—just like you couldn’t collect after drilling big holes in the boat and hitching a ride back to the continent as it sinks.

Eligibility turns on the legal definition of words like “fortuitous” and “accident.”

Hearing it used conversationally, a listener could be forgiven for thinking that a fortuitous event is a good thing, maybe because it sounds a bit like “fortunate.” Nope. “Fortuitous” actually means unforseen or unplanned—outcomes that can be good or bad. Here’s how one law school textbook talks about the word:

[The concept of fortuity], which expresses the concern that insurance arrangements should be limited to the transfer of economic detriments that are fortuitous, is generally regarded as a principle that is central to the basic determination of what risks may or should be transferred by an insurance arrangement. In most circumstances, it is contrary to public policy to permit the enforcement of an insurance contract if it would provide indemnification for losses that are not fortuitous.

Writing about insurance disputes in a legal journal, Barry R. Ostrager & Thomas R. Newman said this:

The fortuity doctrine holds that insurance is not available for losses that the policyholder knows of, plans on, intends to cause, or is aware are substantially certain to occur.

Remember from the top of this story of how Hagspiel carefully coordinated the rescue with the Coast Guard? Sounds like the man knew about the abandonment in advance, had planned and, indeed, had intended to cause it to happen.

A layman’s read of Loose Cannon’s own boat insurance policies suggests such an abandonment would not be eligible for a payout under them.

Pantaenius is a major European yacht insurer. For a few years, before the U.S. affiliate was closed down in 2020, Pantaenius America provided coverage for the Loose Cannon-mobile, a 1977 Morgan Out Island 41. Here’s how that policy treated the subject (emphasis added):

All occurrences giving rise to any claim under this policy must occur during the insured period. Occurrence means a sudden, unexpected and fortuitous event or an accident to which this insurance appplies within the insured period. Occurrence does not include unexplained damage, breakdown or failure of insured property before the end its useful life.

The current insurer is State Farm, a mass market-oriented outfit. It simply talks about the definition of “occurrence” as an accident, “including accidental exposure to conditions, which first results in: a. bodily injury or b. property damage.” It specifically excludes from coverage any event that “was intended by the insured; or would have been expected by the insured based on a reasonable-person standard.”

The one legal expert who allowed himself to be quoted by name is an offshore sailor and Admiralty lawyer named Chris McNally, whose office is in Newport, Rhode Island. He was asked whether he thought such a claim could be approved:

That's definitely a very fact-intensive review by the underwriter to say, yeah, we'll write it off because, you know, there was some peril that was covered under the insurance policy. I'd have to read the policy… to see whether or not the abandonment was justified and therefore covered…You can't just go offshore and pull a seacock and say oops it sank. They're going to investigate.

There was also a question of whether Time Aut was being used as a charter boat—Hagspiel says it wasn’t—which by itself would have served as a basis to deny a claim under either of the above policies.

Rescued Austrian Skipper Denies Voyage Was a Charter

The editor of Blue Water Sailing magazine, George Day, was ruminating about the Time Aut story in a recent edition of his weekly Cruising Compass journal.

“The upshot is that this skipper and his inexperienced crew put the lives of a Coast Guard rescue team at risk because they we unprepared, tired, possibly scared, and incapable of the most basic seamanship skills, such a heaving to,” Day said. “Should there be a penalty for this kind of irresponsible behavior? Or is losing a boat worth a quarter of million dollars and facing the scorn of fellow sailors penalty enough?”

The Coast Guard opposes any policy that would fine or otherwise punish people who seek rescue even even when the circumstances seem frivolous. As it was explained by a retired rescue swimmer, even if there were ever a season without a rescue call, rescue crews would still be “turning gasoline into noise” at nearly the same rate by partaking in realistic training.

According to Mario Vittone, the Coast Guard doesn’t want to discourage calls from mariners who are in real trouble—and maybe not very affluent—who fear they might be forced to reimburse the government.

Day may take some solace in the possibility that Hagspiel might not be reimbursed and thus go unrewarded for what Day and many others consider poor decision-making. At this point, however, it should be noted that before he retired to circumnavigate, Hagspiel was a top insurance executive in his native Austria. So, there is that.

When Hagspiel announced the sudden end of his Time Aut ambitions with a post on Facebook, a friend named Friedrich Schwaiger commented:

If you're over everything, details would certainly be very interesting and educational. Your assessment as an insurance professional would also be an enrichment to the community. At some point...I'd like to hear that lecture.

To which Hagspiel replied, “Next year.”