That 2.5M is put in an account to cover the SIR over the year the gamble is that at the end of the year there are funds left in the account which they recover.
Are you saying that my insurance with PADI is a crap shoot ???
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That 2.5M is put in an account to cover the SIR over the year the gamble is that at the end of the year there are funds left in the account which they recover.
I think PADI denies being an SIR, and it seems that if 20 dive shops holding 20 seperate "insurance certificates" from the same "insurance company" were hit by one hurricane that there would still be 20 claims made by each individual shop against their insurance company, and that $300k would be required from PADI for each claims, and THEN the real insurance company chips in. (This is very simplistic math, and I don't know if PADI actually insures for hurricanes, tsunamis, water or wind damage, or flooding, so there may not be any "claim". Someone else has posted something about this previously.)
From what I understand you to be saying, then even with 20 losses then PADI pockets the $2.5m minus the one-pay of $300k until the end of the year ?
I think that more than simple "failure to properly disclose" is the issue.
Besides, the amount of $2.5m seems to be a figure that just showed up ... anyone have any idea how many dive shops/resorts/centers are insured with PADI? Or how much the premiums are?
I know one dive shop with 2 locations is insured for $5m and they pay nearly $9,000 each year for their premiums. If only 56 dive shops paid a similar amount that alone would pay for the $500k that PADI pays for the policy ... so what happens to the REST of the money that is collected ???
I'd be concerned.Are you saying that my insurance with PADI is a crap shoot ???
I have seen no evidence of the utilization of other carriers to close any gap, PADI is holding the first $300,000 bag on each and every claim as far as I can see. One bad hurricane in the Keys alone would chew up the alleged $2.5 million reserve.PADI's exposure to hurricanes is most probably very small. In coastal areas such as Florida, Gulf states and the Carolina's they are sure to have very limited exposure. Other carriers are utilized to close this gap in coverage.
That's the legal problem, not the practical one. I far as I can see it is not overly complex, it appear that there is a law ... it appears that PADI broke it.The issue as has been stated by several posters is proper disclosure. Lexington Insurance Co is a surplus & excess lines carrier which is not subject to normal regulations but nevertheless must follow the regulations set-up for this catagory of insurance in the various states in which they conduct business. It is obviously quite complicated...
I'd be concerned.
I have seen no evidence of the utilization of other carriers to close any gap, PADI is holding the first $300,000 bag on each and every claim as far as I can see. One bad hurricane in the Keys alone would chew up the alleged $2.5 million reserve.
No, a major problem is that they are not licensed to sell insurance in California. Diving insurance has, I believe, had a major element of fraud involved in it since the get go. That was DAN's problem and I suspect that this is just a new twist.That is the gamble that you have enough funds in that specific year, once that policy year is over then the organization either shows a profit or a loss. But so far PADI has keep enough funds available because I have yet to hear that any claim has yet to be paid.
The question also needs to be asked is the PADI policy premium a competitive rate? If so the plaintiff will have a harder time in court even with the lack of disclosure because since all claims have been paid and the fees for coverage matches or is comaprable to other palns then what was the actual damage.
Again, it does not really matter, they are not an insurance company, they are unrated, they have no proven reserves.PumpUi - to actually know you would need to know what the average number of claims they experience per yr, chances are in most years they have an funds left over, they key is what are they doing with those funds to make sure that if they have a year in which they exceed the normal amount of claims they have a surplus of funds to cover anything under the 300K SIR.
IF that is really the case ... then "why" did PADI NOT pay the $88k claim that the Plaintiff in the lawsuit submitted when his dive center burned to the ground?
It seems to be a VALID claim ... a LEGITIMATE loss ... maybe PADI didn't really HAVE the $2.5m in "an escrow account" like you are suggesting ... and they could NOT pay a measly $88,000 ???? (My condolences to the Plaintiff ... a loss is a loss, regardless of the amount ... I am saddened that PADI chose NOT to pay instead of cover as they said they would.)