Personal watercraft proved buoyant during the pandemic

PC360: What are some of the unseen risks insurers should be aware of when it comes to personal watercraft?

Canter: There are a few important variables that come into play when discussing the unseen risks insurers should be aware of for personal watercraft. Knowing where the vessel is being stored is important because if it is always in the water, there is much more risk involved.

Regarding ownership, if the vessel is insured under either an LLC or trust, it is important to know how many owners are covered. It is also important to take or acquire pre-insurance photos of the vessel at the very minimum. Photos can help provide more information on the condition of a vessel, where details like age can't indicate the overall condition.

Because boats come in various shapes and propulsions, they are not a homogenized group like personal autos. Experience with vessels of similar type, size and propulsion is irreplaceable. New boat owners who have little to no prior experience may be difficult to write, especially for multiple motors and high speed.

Similarly, navigating a boat is not the same as driving a vehicle. While navigating ocean waters is largely different than navigating rivers and small lakes, both come with their own set of challenges and necessary precautions.

PC360: What are some of the most common claims for watercraft?

Canter: A hit submerged object claim is most common due to the fact that it's possible in bodies of water across the country, including oceans, lakes, ponds and rivers.

Another common claim on a national level would be for towing when a vessel breaks down or stops functioning away from a mooring location.

From a regional perspective, weather-related claims with wind and lightning are generally found more in the South and Southeast regions of the United States. In Southern Florida, lightning and vandalism/theft are also common claims.

PC360: Do insureds have any misconceptions about what is and isn't covered by a typical watercraft policy?

Canter: Boat policies are not sold the same as other vehicle policies, with comprehensive and collision coverages, which can confuse insureds. For example, while an insured owner would not submit a claim to their auto insurance for a failed engine, they will for their watercraft believing an internal failure should be covered.

Generally, it is a good idea for all boat owners to read their policies carefully. There are differences between a policy covering a boat and a car, and the insureds need to understand the differences in coverage.

PC360: How does coverage work for a vessel being towed for transport?

Canter: Each claim is handled on a case-by-case basis. It is difficult to give an answer on what would happen in a particular claim situation without the facts and policy language from that claim.

If a transportation company is hired to trailer the boat somewhere, most likely for larger boats, it is unlikely that the boat will be covered under a standard boat policy. Some policies will provide coverage if the vessel is being transported on a specific policy issued for the common carrier for hire within a specified mile radius from the insured home port or storage yard. Any distance beyond the specified range would need an additional endorsement.

Finally, depending on the policy language, boats that are attached or on a trailer will be covered by a standard boat policy. Every state has different laws and policy language, so the best advice is to make sure the insured reads their policy.

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